On the other hand Chris, the incentive is just that, an incentive to lease the premises: consequently, you kick the can for $50k but do not get an increase in the rental (unless it is for a sitting tenant) ie you are effectively dropping the long term rent on the property. It is used as a sweetener to get the tenant to agree to the rent that you are asking.

Generally you would be seeking full repayment of the value of the incentive during the term of the lease plus some return on the capital invested. Therefore you would be looking at a much higher increase in rent eg: 5 year term on same basis would need a rent increase to cover the incentive of $11.5k (including a 15% return on your capital invested) or $46 psm. On a 3 year term term this is in excess of $19k pa ($76psm).

A rent increase of $6250pa will take 12.5 years to be paid off (excluding interest) – the fitout is only good for the life of the tenant ie 3-5 years so you will effectively have lost between $19 & 31k should there be the normal make good requirement on the fitout. 
 
Other considerations would include the ownership of the fitout at the end of the lease ie if the tenant renews has the ownership & liability of the fitout been transferred to the tenant upon expiry of the previous lease? Who has the benefit of the depreciation during the currency of the lease?

As the cap method is one of the methodologies used it will reveal an increase in the property value however the skill lies in determining the appropriate cap rate having made adjustments for incentives in the lease ie you cannot look at the rent on face value and plug it into the formula.

Hence you need a good understanding of the effects of the incentives that you provide (without me having delved into the legal or tax ramifications of the incentives).

MB, the house has been on the market only 2 weeks! This is a regional property, your exit strategy (and expectations) should be different to that of a property in the major capitals.

If having a tenant was an issue, the agent should have told you before taking on the role to sell (and have been a consideration in what they would expect the property to fetch). Why have they waited until now to raise this as an issue? Has the agent advised (now) that the property will fetch a better price without a tenant? Why? If the market is narrowed as the property is tenanted, why isn't the agent addressing the investors more in his marketing campaign? (Yes I have seen the webvert – however there are plenty of properties priced both above and below this one). Do you have a negative agent? – request the principal have another salesperson work on the property.

They most likely have the standard 3-4 month agency agreement, make them work for the money, don't drop your expectations straight away if the agent has given you a bum steer. The agent is looking for the easiest/quickest way to make the sale, not necessarily in your best interests. The agent is obliged to bring all offers to you (unless you have agreed otherwise).

The next thing that they will come back with is that the house is over-priced – you can retort that it was the agent who has recommended the selling range, they did the research and presented the most comparable sales to you and that is what you expect them to achieve. Ask them to provide a list of more recent sales of similar properties (ie 4 bedroom houses, similar location & quality) to justify their lack of judgement (after all, there has been one reduction in interest rates last month with another expected in October which should be spurring investors' interest). This is the agent's way of wearing you down.

Find out what their strategy is to sell the property – what ways have they agreed to market the house? The more marketing they do, the less net commission that they make upon the sale. Are they targetting the investors who are on their contact lists? Are they using only their shop window? Internet? Multi-list? Local paper? Regional (Lithgow/Orange) papers? Sydney Morning Herald (country/interstate)? The Land? etc. Has the agent looked at any further development potential (eg granny flat/subdivision that may be permitted)?

Presentation – the photos that the agent has taken do very little to show off your property (hint, there is a coke bottle on the floor in the lounge room, a shoe in the book case, power leads/extension cords in view, a tiny shot of the kitchen (unless the kitchen is cramped they should show how much space there is eg pantry/cupboards/dishwasher etc), no shot of the yard/garage, gardens are looking a little sad (it is spring, put a bit of colour into the garden eg pigfaces or kangaroo paw etc) – poor presentation shows that the agent is trying to demote the property not promote it (tenants look like they may be a concern to potential purchasers due to the way they keep the house/lack of powerpoints/garden).

Features – there is only one bathroom/toilet (a drawback in most markets for a 4 bedroom house) however this looks to be the norm in the current listings (adding a 2nd toilet at the very least will go a long way to reducing congestion at busy times).

WIth regards to selling the property yourself, you most likely have signed an exclusive agency agreement ie regardless of whether the agent or you find a buyer, you are liable to pay the agent's commission.

Motivation for selling: If you are not under extreme pressure to sell, why divest in a slow market? After all, your return is 5.7% gross.

Excuses are a sign of a poor agent or one who is only after the easy sales, they don't work with the vendor they work for themselves taking advantage of your insecurities to push you into a position where you will take the easy option (low offer, vacant possession etc) in order to make their life easier and to get their commission without having to do much work.

(Rant off). – Hope that helps.

Servcorp? and others (but not aware of any doing factory space).

But seriously – unless you leased the property off me at a below market rent and had a turnover clause, strong makegood provisions and a decent bank guarantee in place you won't get too far.

I don't particularly care what you do inside the leased space, provided that it is legal however as this would require fire safety compliance, council approvals (there may be a zoning conflict with what you want to do).

Agents managing serviced offices charge like wounded bulls – this is best done in-house (r e licence is required for onsite property manager).

Councils are able to rely on high quality satelite/aircraft images of their LGA (ie better resolution than google/lands). One complaint from a neighbour and you are facing a $10k fine if you are in a tree preservation area.

You may not consider that the tree has a value, however they contribute to the value of the land by improving the amenity – also unseen improvements such as soil retention and bank stabilisation.

If the FP is part of the cost of setting up the business, then it might be capitalised. Advice recieved for a going concern might be classed as an expense.

If you were 1km from the beach with a failing seawall, would you be as hesitant? The reason I ask is the extent of the mining known (by survey as it relates to your prospective site)? How deep was it? What is shown on the victorian equivalent of the S149 (zoning certificate)?

Treat it as a normal purchase with a tenant on foot. If there is no option/market rent review at the end of the lease/if the govt wants a new lease, negotiate new terms/rent if not within the last six months start negotiating the vacating of the premises and the make good.

I was referring to company title and quasi-strata title for leasehold property

As the property is jointly owned, you must share the income and expenses equally.

Move into rental accommodation, rent out your ppor for a couple of years, claim the interest & other expenses (better than it coming out of your pocket).