ARE YOU PAYING TOO MUCH ON YOUR HOME LOAN?
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October 21st, 2021 by igniite
From Parkdale Milk Bar to Parkdale Business Services.
The single best thing I ever did, ( kids aside ) was to buy a milk bar in Parkdale, that no one wanted to buy and spend 6 months converting it into a beautiful business premises.
Fast forward to today and we have now been firmly established, in this same location since 2017 with a premises that was fully renovated and has tripled in value, in just 6 years. A mind blowing result. Remember, no one wanted to buy it…… except me. We still have a little giggle when someone walks in to buy milk.
Gone are the days of signing commercial leases and riding the wave of up trending rents, that come with the deal. We are in the enviable position of not having to impose fee increases on our client base, just to cover our overhead rental costs.
While running a business, there is a lot to be said for owning your business premises, and an investment in commercial property can let you do just that.
Leasing rather than owning your premises can be more affordable in the short term, but you simply don’t have the same security of tenure.
There are a wide choice of options available to purchase a commercial property, and the options best suited to your needs will depend on whether you are buying as an investor either directly, or through your self-managed super fund – or as a business owner, for use in running your business.
An accountant can work with you to pinpoint the options best suited to your needs – and most tax effective outcome.
Buying in your business’s name – the property becomes an asset of the business and the cash flow from your business will be used to repay the loan. As you build equity in the property, you can use it to secure loans for other business purposes.
Buying in your own name or through a self-managed super fund – you will enjoy the capital appreciation for the property and your business will lease the property from you. You can build up your personal wealth while also providing your business long term access to the premises.
Commercial property can be a complex area, and we recommend speaking with your Accountant first to discuss the tax implications around the different options available.
We will never ask our clients to cover our rental costs through our service fees. If you are a client of an ‘accounting firm Goliath’ who operates from a large and impressive office complex in Richmond (for example), you are paying their rent.
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