Aa:You wanna do that though?

Bb:I dont know. I dont know.

Aa:Yeah. Just creates a bit more confusion but you gotta just look at
those options. Lets assume that its just an office like we have here. I
mean you could buy sufficient floor space for say three hundred
thousand or four hundred thousand, I would expect.
Bb:Here? Not here.
Aa:Depending on how much floor space you have.
Bb:Right
Aa:Yeah.
Bb:Ok. I havent really looked at that probably.
Aa:No thats the next phase is to look around. Theres a lot of surplus
stuff in northwest now. So therefor the prices have come down.
Bb:Right.
Aa:Right. Yes, theres a lot of residential complexes being built in the
northwest.
Bb:Residential?
Aa:Yeah. Units Apartments.
Bb:That would be very ___
Aa:Yeah but thats not what you want. You want a commercial office.
Bb:Well its also what were looking for. Since we are looking around its
just Its crazy. The prices are crazy.
Aa:Residential or commercial?
Bb:Ok. So, residential is crazy.
Aa:Correct. That is... I agree.
Bb:CommercialI have tried to look at it. And, you know, theres a
different __ after commercial.

Aa:Yes. Banks.
Bb:Yes. Ones seventy. Ones eighty.
Aa:Eighty is usually residential.
Bb:Ok. And eighty is
Aa:Eighty is commercial.
Bb:Commercial. So that means youre gonna come up with more
money.
Aa:Thirty percent equity.
Bb:Correct.
Aa:So, thats what im saying. A hundred and fifty thousand you could
borrow a third. Roughly a hundred. *** Less stamp duty. Gives you
probably around four hundred purchase price.
Bb:So thats not a lot.
Aa:No. Thats right. So that will now give you an idea of how to look
around for a commercial business premises that is in that sort of
magnitude of dollars. Then its just a case of them working through the
numbers to make sure that that sort of thing suits your requirements.
Its in the capital limits of what you can do and can you get a loan to
facilitate the balance plus the stamp duty cause.
Bb:Ok.
Aa:But having heard that youve shared now that you reinvent the part
of downstairs of a home to your office. Do you wanna take your office
out of home and put it somewhere else. At the moment, I guess from a
text perspective, youre claiming some depreciation on thatportion of
that total building.
Bb:Lots of expense.
Aa:Lots of expense? Part of the rights are electricity, water. Stuff like
that.
Bb:No. No.

Aa:When you rent.

Bb:We dont claim on that much. We dont do that either.
Aa:And I wouldnt as a home, because your partly home can be ___
taxable. So, you gotta be watching that. I personally would be
recommending finding some commercial office. Premises that suit your
needfloor space. And if youre gonna grow your business with
another staff, you two --- to yourself plus some storage. Probably not a
lot of storage needed then youre rally looking into something with
three or four offices maybe reception probably not cause your business
is done by phone rather than them coming to you. So you really need
offices. So similar to half of that facility which is ?. Its got what,
reception, one, two, three offices, store room, and toilet, kitchen.
Thats a sort of size that you need or a bit less. A bit less probably just
to give you and idea for the size.
bb:Yeah. It just kinda worries me that in ten years time its not gonna
be salable, not much interest, or when youre trying to get rid of it.
Thats what worries me.
AA::Right. Ok. Lets then get that commercial place thats always
gonna be salable. Now, fortunately here, were going to be close to
your new station so well expect the prices to rise at some point and
maybe this building would be demolished and rebuilt. This capital could
come at some point in time. But at your way, depending on logistics
can --- on that office. You want it to be close or further away? Do you
wanna be there on weekends because its just around the corner. So it
has to be far away that youre not going back and fort ten minutes
everyday including weekends.
But its your job therefore to look what might be suitable with the
parameter of around four hundred thousand, I would suspect. Alright,
that sort of gives you a framework within the target. Yes it can all be
done financially and yes it is good for worth creation over this next ten
years? Yes. You just ??? from borrowing that leverage up your equity
particularly if its related per tenant where you control the rent and the
occupancy. You got more of the surety of that income to service that
day.
BB:Ok.
AA:Alright. What can we do in return. We can also get updates on your
superfunds. Mark will look at the insurance. We can look at asset
values. In conjunction with Mark, we can determine therefore how
much could rolled over to your superfund to facilitate the equity
component to a commercial property purchase. We can introduce you

to relevant banks that can provide lending and the limiting recourse
borrowing arrangement.
BB:Well I did a little research on that a few months ago and the courier
wont look at you unless you have two hundred gran --- banks just --AA:Probably the --- anyone has left. Geroge bank have leverage in
there.
BB:Im not gonna go through like that.. she has an offset to SMS
landing.. So atleast having an offset account. And that what Im
(static)
AA:Certainly, George have been landing on on that superfund market
for a period of time. They --- documentation they have developed for
that purpose. Theyre used to it and I suppose they havent pulled out
of that market as some of the others have pulled out. And pulled out
entirely. And CVI and McCurry lowered their --- and raised their rates
and put more constraints on superfunds that were borrowing, yes. All
under the plant down on landing to the market place.
BB:So, I can see why that would have happened because I imagined as
from the messy group property in the twelve months there could be a
lot of.. they take a load of crap if those rates goes up.
AA:On residential properties, yes. And McCurry said no landing to
certain post codes to clear around roads parameter --- the airport
CC:-AA:yes.
BB: have a landing and the rates go up and before you know it you
have a messy slab. And the winning lots of property on the market.
AA:Yep thats right at lower prices.
BB:Correct. And I actually (Static)
AA:Thats one McCurry could have certain post codes. You see with
too many units being sold at too high price relative to the risk of them
being able to sale all for the basis being the owner, tenant to be
servicing it.

BB:I think reserve banks are really worries about it too.

AA:Yeah. So, I would still --- you and encourage to explore if you
wanted to use your superfund which is a great place to grow your
wealth from a tax efficiency perspective and therefore leverage helps
in doing that then a commercial property would be the preferred entry
for that purpose. Yes, Can be rented by you or an external party.
Alright. But the capital constraint the issue because youre only really
gonna have a hundred and fifty equity in the fund.
CC: so, You think the breaking text is better than having an external
tenant if she were to rent
AA: A commercial property its a sign
CC: A sign?
AA: Better that the only issue thats gonna be is potentially having the
--- agent to manage the tenancy if its an external party. Where if its
internal, why do you need an agent? You know youre paying the rates,
the ---, the water, the electricity. You know youre paying rent every
month to your superfund. Its not you need someone else to collect
that. So, theres no text differential in whether its yourself renting or
an external party renting. There are some leakages in expenses thats
all. Alright, from text perspective its the same. From a future game
text perspective still the same. Wait until you get to retirement age,
then sell the property.
CC: How I see it, the feeling of external tenant paying the system
would be better.
BB: Well theres a tax reduction.
AA: For the business, yeah. And you really youre diverting P-Y-G
income into lower text fifteen percent rent income into the fund.
Alright, thats what youre doing. O, youre saving thirty or thirty-five
percent marginal text rate and paying fifteen. Theres a fifteen percent
tax saving on what could if its ten percent
BB: Cause I -- it on money
AA:Fifty thousand dollars a year and the limit youre putting in which
is not gonna fall
BB: twenty-five isnt it?

AA: At the moment its thirty for you.

BB: So it hasnt drop to thirty-five?
AA: Next July 1. Thats twenty-five.
BB: Oh I thought its was this July.
AA: No. No. You have to fix-up your parallel. No its not twenty-five yet.
BB: ok.
AA: Theres another twelve months.
BB: ok.
AA: Just look at the system.
BB: Yeah. I know. I know because just look at this ---.These changes
coming through and I thought so..
AA: No. Thats thirty-five under fifties and thirty-five for under fortynines.
BB: I thought it dropped to twenty-five as a --AA: Thats still the same this year.
BB: Ok.
AA: Thiry-five and thirty, next year it will change. Alright, so to answer
your question, there is a fifteen percent rough tax saving on say fifty
thousand dollars a year. Thats seven and a half thousand dollars tax
saving from P-A-Y-G to rental.
CC: yeah, but then the tenants would put in the fifty. So, still forty.
AA: When when you get the fifty its still ---. Then shes paying thirty or
thirty-five marginal tax rate.
BB: So what youre saying is you could be putting into the addition of
thirty thirty-five gran.
AA: Yes. And reducing the company tax rate.
BB: Tax adoption.

AA: Yes. You dont have to draw as much then.

BB: All we do is we gonna leave.
AA: Yes but net can end up at the same cash flow at home but your tax
savings are now in the superfund. (Static) in your retirement plan for
someone else..
(static)
AA: and then we could look at increasing your super contributions extra
salary sacrifice. Pay the increments from the company or from yourself.
Provided nett net your take home covers your personal lifestyle
expenses. So really, what Im talking about is working in conjunction
with Mark. We dont want to obviously --- your extisting client then you
dont obviously have insurance. So we wanna preserved that but you
can use a hundred and fifty or more as long as theres a money left in
there to cover the premiums. If you find a property that is of merit,
then we can do the roll over. We can create the equity in the fund to
then borrow with to purchase the property. Dont have to rush and do
any of that yet. First wed be doing fond a suitable property at a
suitable price.Alright.
BB: Just that all tax time for all that to happen.
AA: It sure does and the longest thing would be the bank approving the
loan. They wanna see trustees accounts for the superfund. --- need to
contribute to the superfund to service the loan eithing through rent or
through contribution and it all becomes a time drag, yes. But if you
start looking youll get an idea is there a commercial property that is of
price
BB: not really
AA: and floor space that fits your needs.
BB: yeah I have been looking. Cause I need two different things so
much for four hundred gran.
AA: Let it be a about I suspect your price limit. It could go a little bit
higher I mean four hundred at what four percent. Thats an extra
sixteen K and stamp duty plus some loan legals. Lets say thats all up
twenty gran. Thered be some --- trust, cost, legal cost at its well might
be twenty-five gran all up at lies. Thats money that need to be in the
fund as well. So if you had rolled over one-fifty you got one twenty-five

to play with. Again at seventy percent it will be high. You will be filled
with a max five hundred K, three-fifty loan. Probably four-fifty to five
hundred.
CC: That is if you wanna work from your office too.
AA: well, thats right. Now youve said youll be at home but
sometimes, you might be better of not working from home. So youre
not tied to it twenty-four seven. You can have some home time away
from work. It does break that ---. I just live down the road and why did I
buy here? Because it is close to home but it is not at home. And
fortunately we just had to move from across the road opposite the --to here so we kept the same phone numbers, post codes, postal box,
etcetera etcetera. All the tenant reasonably close. Im the one that
gets called up for an alarm. Thats about it.
BB: Im gonna think about that.
AA: If you want the next part of the process in working in conjunction
with Mark from my end will be to communicate with the facility.
Felicity, This is just an authority for me to talk to her about any of your
financial affairs and in relation to the superfunding in particular. Since
you said that up. You shouldnt have a problem with these new limits
on personal contributions to super because you dont have a lot in
there. You wouldnt therefore exceeded the five hundred thousand and
it doesnt look like you got a at least a hundred thousand.
BB: Five hundred --- tax, doesnt it?
AA: Thats after tax contribution. So its unlikely that you would have
that but we need to check that in the tax office before you make any
further personal contributions in the future. Alright, now for us to talk
to similar to that at mark at one part ---, we need an authority to
gather that information. Like him, thats a copy of our financial services
guide, which tells you how were licensed, what recourse we have, how
we get paid, etcetera.
BB: So, what are we signing for?
AA: A leasing authority for us to get information in colonial in one part
on your super. This is an authority for us to --- with Felicity on
information particularly to the superfund.
BB: So, whats it to do though? I dont understand.
AA: Just that it allows us to access information.

CC: If we go ahead.
BB: Go ahead with..
CC: Well,
BB: but were not changing out super. I dont know. I didnt get that.
AA: Well you can go ahead and do it all. We dont have to get involved.
BB: Yup.
CC: ---AA: Yup.
BB: So whats it for? Im going to buy something or
AA: well if you wanna set up an on going arrangement, we would
agreed to that separately, yes. At these days, theres no free
arrangement. Were not doing anything.
CC: I dont know what Im doing.
AA: Thats right. You need to get a bit more clarity on what you wanna
do. But all that the bigger picture objective is to obviously grow your
wealth that would be driven by when were growing your business.
CC: Do you think thats a better idea than sticking where it is?
AA: Particularly a commercial property where you live?