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Accounting and Finance (Page 11)

Finance, Taxation, Insurance and Accounting related articles

In: Accounting and Finance

Contributed By: Mike Phipps Finance on

If you are reading this chances are you are thinking of buying an accommodation business or you already operate one. For the purposes of what I am going to talk about in this article let’s confine our thoughts to freehold and leasehold motels and caravan parks. The object here is to contemplate the various strategies that are worth thinking about as part of the purchase process. Let’s start with the most common transaction we see and that is the purchase of a leasehold. By far the majority of our clients use a company acting as trustee for a discretionary trust. They do this for aRead More →

In: Accounting and Finance, Motels and Hospitality

Contributed By: BMT Tax Depreciation on

Did you know you could be missing out on thousands of dollars in tax deductions by not taking advantage of your depreciation entitlements? The Australian Taxation Office (ATO) allows the owners of income producing properties to claim depreciation deductions relating to the wear and tear of the building structure and the plant and equipment assets it contains. By claiming depreciation, hotel and motel owners essentially will reduce their taxable income, therefore they will pay less cash. What’s more, the fee to obtain a tax depreciation schedule outlining all of the deductions available to be claimed is 100% tax deductible. You could be missing out on:Read More →

In: Accounting and Finance, The Management Rights Market

Contributed By: Mike Phipps Finance on

As finance industry professionals we deal with banks every day and I suspect take much of what happens for granted. At a recent accommodation industry forum I was a bit surprised when the discussion turned to bank lending policies. It transpired that many operators (and therefore I presume borrowers) in the room thought that the banks solely call the shots on what can and cannot be done when they lend you money. Nothing could be further from the truth. It is true that banks have credit policies and those policies influence and inform the outcome of your loan application. It is also true that withinRead More →

In: Accounting and Finance, The Management Rights Market

Contributed By: Mike Phipps Finance on

I mentioned in a recent article that when it comes to interest rates I am not a clairvoyant and so it has proved to be. The reasons why will be revealed soon enough but rst a bit of recent history. Until relatively recently banks set their home loan and residential property investment rates in accordance with the Reserve Bank cash rate. That is, if the Reserve Bank dropped the cash rate then residential property rates followed and vice versa. A little while back one of the major banks announced that it would no longer blindly follow the cash rate benchmark and instead make rate decisionsRead More →

In: Accounting and Finance, General Interest, Legal

Contributed By: Hynes Legal on

We don’t like being negative nellies, but sometimes we do need to talk about the things that go wrong in these newsletters. Alan Greenspan (the then Federal Reserve Chairman in the USA) coined the famous phrase ‘irrational exuberance’ in relation to the dot-com bubble of the late 1990’s, but it could apply to any boom since (and before – even back to the tulip boom of the 1600’s.) If you were to Australianise that phrase it would be along the lines of something being ‘too silly for words’. It is not for a lawyer to talk about risk when it comes to valuations / asset pricing asRead More →

In: Accounting and Finance, Body Corporate, General Interest, Legal

Contributed By: Archers Body Corporate Management on

Body corporate insurance is arguably the most important aspect of building management, but when it comes to using it, it can be difficult to understand what’s covered and what’s not. The basic principle of strata insurance is to provide cover for common property and the building’s structure. This means that the body corporate is responsible for all common areas and the structural elements of the building. Owners are typically responsible for the internal contents of their unit. There are some circumstances where the body corporate can provide cover for internal fixtures if they are classified as part of the building’s structure. For example, if an owner’s hot water systemRead More →

In: Accounting and Finance, General Interest, The Management Rights Market

Contributed By: Mike Phipps Finance on

It seems that in this quite buoyant (some might say bullish) market lots of buyers are interested in getting into accommodation businesses that they cannot afford on their own. Obviously one way of achieving this outcome is to find some investors, create a partnership and go shopping. Certainly if you fall into this category as either active operator or investor we can help in terms of managing the entire process on your behalf. A word of caution however. Only experienced managers need apply. The clear message from the investors we talk to is that the managing partner needs to have a demonstrated history of successfullyRead More →

In: Accounting and Finance, General Interest, The Management Rights Market

Contributed By: Mike Phipps Finance on

I write this month’s missive at 40,000 feet returning from across the ditch after a series of pretty successful management rights seminars in New Zealand. Aeroplanes are great places to write these articles as there is bugger all else to do and just how many re – runs of Two and A Half Men can one man watch anyway ? The Kiwis seem keen enough about Aussie management rights and certainly the exchange rate is very tempting having improved dramatically over the past year. Interest rates still look a bit high in NZ and the question everyone asks is “what’s happening with the Australian domesticRead More →

In: Accounting and Finance, General Interest, The Management Rights Market

Contributed By: PCS Finance on

As a Finance Broker we sometimes are asked why do we get paid a commission from the bank and why would I go to a broker when I can source finance myself. I want to dismiss some of the myths around engaging a Finance Broker and explain what the positives are in engaging a reputable Finance Broking company. I suppose it’s a bit like Management Rights where the onsite Manager is paid an income to do a job. If you fulfil this role in a professional manner and educate your owners along the way, why would an owner go to someone else to manage theirRead More →

In: Accounting and Finance, General Interest, The Management Rights Market

Contributed By: Mike Phipps Finance on

You may recall last month I mentioned finance myths in the context of 10 year agreements and standard module buildings. In a continuation of the theme here’s the current Top 10 Urban Myths of Management Rights Finance including a recap of last month: 10 year agreements – The banks don’t like them, the banks won’t fund them. That’s nonsense. Certainly some banks pick and choose their lending and tend to avoid certain types of transactions. Having said that we are having no problem funding Standard Module management rights on competitive terms. Granted some smaller buildings can’t carry 70% gearing but that’s not to say they can’tRead More →

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