I'm planning to buy a commercial property for my own business. Why pay for other people's mortgage when I can pay for my own, but I heard it's very different from buying residential property. Can anyone recommend any books I can read about this?
Thanks!Hello black tulip
Here are a couple of sites you can brows and a book to read. There is not much around about commercial property investing.
http://www.propertyupdate.com.au/articles/49/1/Residential-Or-Commercial—Which-is-right-for-you%3F
The book is called "How investing in commercial property really works" by Martin Roth and Chris Lang which is worth a read.
However I would think that buying the property for your own business would be a whole different thing. For one thing you would know your own requirements as far as size, vacilities and location was concerned and for another you wouldn't have to worry about the property being vacant for a long time.
Hope this helps
ElkaHi Blacktulip,
I would suggest 'Commercial Real Estate Investor's Guide' by Peter Aranyi.
If the local library doesn't have a copy, then you can download a chapter and/or purchase from:
http://www.empowereducation.comPlaying devil's advocate for a moment. If there is no threat to your business, then why buy when you can expense the lease costs?
Hi Elka & Wildthing,
Thanks for the reply. I've checked out those books and will get a copy.
I'm kinda new to this thing, what do you mean by "expense the lease costs"?
I'm a dentist working in a regional town. I've been trying to set up my own practice but due to the mining boom there's a very long waiting list for tradies to do the fit out etc. I've tried leasing but figured it's not worth paying 1 year's lease while I wait for the tradies (that's $42K down the drain!), besides I realized I've to pay all outgoings, rates, tax , etc of the landlord (even the landlord's solicitor's fees!), and the rent will increase every year according to CPI. So I've decided to buy my own commercial property with a tenant in place, so I can at least have an income from the rent while I plan for my surgery and wait for the tradies (and kick out the tenant at the end of the lease
). Also I've done some calculations and found out the mortgage repayment is heaps lower than the lease and I can do whatever I want with it because it's mine. Speak to your accountant as well about buying it in your superannuation fund completely if possible or otherwise you can see if you can structure it as a joint venture with options etc to buy the rest of it as the superfund gets more money. Basically use your SMSF as it gets you a better tax result as it only pay tax at 15% however if you operate as a compnay you get a 30% tax deduction giving you a 15% net benefit. Plus you can make as part of your lease between the SMSF and the company that your company pays certain expenses such as rates etc giving you more benefits. If the SMSF doesnt have enough cash, buy it jointly with yourself personally and then when it does have enough cash you can sell you portion to the SMSF and then use the small business CGT concessions to get rid of any capital gain. Speak to your Accountant about it anyway
Hi jefftheunit,
Thanks for the reply. I don't have a SMSF, only have an industrial super fund and very little money in it (not even enough for a 10% deposit). I'm still an employee and my boss wouldn't do salary sacrifice for me. My accountant here is not very "creative" so I'm in the process of looking for a better one. Do you have any suggestion? I live in a country town but will travel anywhere if I can find a good accountant. Thanks.
). Also I've done some calculations and found out the mortgage repayment is heaps lower than the lease and I can do whatever I want with it because it's mine. 
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