Buying and Financing Commercial Property

Buying Commercial Property.

With the end of financial year approaching, it might be a time to reflect on your business operations and your business location.

Many businesses rent, however buying a commercial property to operate your business can be one of the most effective long-term wealth-building strategies for Australian business owners. Whether you're considering purchasing a new premises or buying the building you're currently renting, there are several significant benefits. Some of those include:

1. Tax Benefits

There can be several tax advantages associated with owning commercial property, which may include, interest on the loan may be tax deductible, depreciation on the building and fittings may be claimable and the property expenses such as insurance, maintenance and council rates may be deductible.It is always important to seek advice from an accountant to understand your individual specific circumstances.

2. Self-Managed Super Fund (SMSF) Opportunities

Many Australian business owners purchase their commercial premises through a Self-Managed Super Fund. Some of the benefits to this is your business pays rent to your SMSF, rental income is generated within your super fund, potential concessional tax treatment within superannuation and building retirement wealth while retaining control of the premises.

Individual professional financial advice should always be sought before pursuing this strategy.

3. Using a Conveyancer for your purchase

Before signing a contract, engage an experienced conveyancer or property lawyer to:

• Review the Contract of Sale
• Conduct Due Diligence
• Explain your legal obligations
• Identify any unusual clauses or risks
• Negotiate amendments if required

For many Australian business owners, purchasing their own commercial premises is not just about securing a place to operate, it's about building a long-term asset, creating wealth outside the business, and gaining greater control over their future.

Financing your Commercial Property Purchase.

If you're looking at financing a commercial property here are some considerations to take on board from Avi Luthra from AusInd Financial Solutions.

1. Initial discussion/Assessment with broker

Review your borrowing capacity, deposit available, business structure, and finance objectives. The stronger the financial position of the business and the property security, the smoother the approval process is likely to be.

2. Property Assessment

Assessing the property, including its value, location, and suitability as security.

3. Lender Reviews

• Business profitability
• Cash flow and servicing capacity
• Deposit/equity contribution
• Property security

4. Key Factors that Lenders will Consider

• Business cash flow and profitability
• Trading history and industry experience
• Deposit/equity contribution
• Existing debts and commitments
• Property type and location

If you're looking at financing a commercial property reach out to:

Avi Luthra
Finance | Mortgage Broker
Credit Representative 574105 of ratesonline.com.au Pty Ltd
ACN 122 052 582 Australian Credit Licence 384404
P: +61 423 488 196 E: avi@ausindfinancial.com.au

‹ Back to News