Your Commercial Property & ESTATE PLANNING
At the Northern Corridor Group we understand that estate planning is not a fun topic to discuss, but it is very necessary. Over the next thirty years, an astounding $3.5 trillion in inheritance wealth will transfer to the next generation of Australians.
A study by the Productivity Commission has Baby Boomers handing over $224 billion each year in the coming years, thanks to record real estate values and superannuation wealth.
For those of us that own commercial properties, proper estate planning is essential. Many of our clients have spent a significant portion of their life building a portfolio of properties to provide a legacy of financial freedom to their family. The last thing they want is for this legacy to become a burden to the people they care about.
Regardless of whether you have a large portfolio or a single property, there are steps you can take today that will provide you and your family with peace of mind into the future.
Aaron Canavan
Commercial Principal 0447 744 948
Regularly Review Your Property Performance
You should establish a system for assessing the ongoing performance of your commercial property each year.
This should include tenant satisfaction, property maintenance, insurance cover, outgoings audits and financial performance to ensure the property is always in alignment with your current and future estate planning objectives.
Understand Your Property Portfolio Value
Property values have been volatile since COVID, both positively and negatively at different times.
There is no reason why this trend will not continue over the coming years and price changes in either direction can have implications for your estate.
While formal valuations will be necessary at different times for refinancing or transfers, annual market appraisals from our team will provide you with a good understanding of your position each year.
FINANCE FACT
The total value of Aussie inheritances being passed to future generations is expected to almost quadruple between 2020 & 2025
Source: Australian Productivity Commission Report: ‘ Wealth Transfers & Their Economic Effects’
Identify Future Problems Early
The quickest way for a legacy to become a burden is for family members to be left to solve a property problem they are ill equipped to face, and some properties are more prone to become problems than others.
Older buildings with maintenance and safety issues on the horizon or properties with specialised fit outs that will be difficult to release in the future are good examples.
Any properties you own with higher debt ratios are also exposed to future LVR issues if values remain volatile. You should look at each of your properties with a ten-year lens and decide if they will still serve the purpose at that time or if they are a potential liability for your loved ones.
Assess Your Family Engagement
There is a saying among golf professionals that “you can’t coach your family”. While passing down your commercial property knowledge can be more valuable than the properties themselves, we often see our clients struggle to get their families engaged in learning the skills necessary to manage a property or portfolio.
It is best to find this out now and make plans to have your properties externally managed to avoid possible pain, conflict, or resentment for family members left to work through the issues.
Your commercial property decisions impact more than just your family’s future, you also have the future of the business owners who occupy your buildings, their employees and their families are in your hands.
Seek Out Experts
You don’t have to navigate these waters alone, our NCG team is here to help you make informed commercial property decisions at each step. Our agents can provide you with real-time market sentiment on your property values and work closely with property management to help answer your questions or take on your day-to-day management needs, allowing for a seamless, stress-free transition in the future.
In addition to our propertyspecific insights, you will likely benefit from the guidance of industrybased professionals in legal, accounting, finance and succession or estate planning fields. We have a strong network of trusted and knowledgeable consultants in each field that we would be happy to refer you to or forward on their contact details.