The perks that every commercial real estate principal should know about

When you go out of your own and become a commercial real estate principal, you can take advantage of some pretty significant perks that come with the territory.

I recently took advantage of one such advantage that’s available to all business owners—a new business credit card that offers 200,000 Qantas Frequent Flyer points.

Just by signing up and spending as per usual on everyday expenses, I’ve gained $3,800 worth of value (one point is valued at 1.9 cents).

This got me thinking about how even small decisions on how we manage day-to-day spending can result in huge wins for business owners – and that there are many other advantages that are often overlooked.

From vehicle costs, tax-deductible expenses on home office equipment, networking events, and even working with a coach—these opportunities are there to help us not only run our businesses more effectively and contribute to economic growth, but also save money and improve cash flow.

While none of this is meant to be specific tax or financial advice (talk to your qualified advisor for that), it’s a reminder of the value we can unlock with some smart strategies.

If you’d like to work smarter and make the most of your status as a business owner (or understand the benefits from becoming one), I go into greater detail in episode 195 of Commercial Real Estate Leadership.

Episode transcript:

I can remember very clearly when was an employee at one of the big firms, some of my colleagues bitching and complaining about the fact that it's just not fair that our competitors who are owners of businesses in independent and boutique firms are entitled to all of these advantages, these rorts that we as employees weren't entitled to.

Well, it's only a rort if you're not involved.

And the fact of the matter is that business owners are massive drivers of economic activity.

Here in Australia, around a third of GDP comes from small business and small business employs around 44% of the workforce.

So, in today's episode, I've just taken advantage of a big benefit that is provided only to business owners. I want to tell you about that.

And also give you a reminder about some of the things that perhaps you could be taking advantage of as a commercial real estate principle.

Hello and welcome to episode 195 of Commercial Real Estate Leadership. I'm your host, Darren Krakowiak.

And we missed last week's episode.

If you're a very attentive listener of the show, you may have noticed that. I do apologize.

We had a slight technical issue, but we're back this week with an episode that I'm sure is going to deliver a lot of value to you.

And if I was going to give you the reason why we weren't able to release an episode last week, not the real reason, but the reason which provides a nice segue into what I want to talk about today.

I would be telling you that I was too busy shopping, that's why I couldn't release an episode last week.

You might say, “What you were shopping?”

Well, the reason why I was shopping was because we just got a new business credit card.

And when you apply for this particular card, you are entitled to 200,000 Qantas Frequent Flyer points.

To give you an idea of what is that worth, well, a Qantas Frequent Flyer point is valued at 1.9 cents according to the points hack website.

That means it's $3800 worth of value just for signing up for this card. It's got, I think a $300 annual fee.

So, that's a pretty good return.

And also, you have to spend $4000 in the first two months to be entitled to that 200,000 point bonus.

So, I've been busy out there at office works and buying things for the business to make sure that I hit that trigger to get my free Qantas Frequent Flyer points.

And I guess the reason why I wanted to tell you about that is because this is something that I'm a little bit late to the party on.

I've been running this business now for 4.5 years.

And before we got this card earlier this month, I was just paying everything off a debit card and I wasn't earning any points.

So, I've been missing out on this benefit, not only of the initial big influx of points, but also earning points on all of the spend that we do as a business.

And I was having lunch with one of my clients recently and he showed me his very sexy Amex, which was like, if you drop it on the table, it's sort of boom, the thumps because it's a very unlimited.

I don't know if it's a black Amex or what it is.

But he was telling me that he just puts everything on it and he actually used the points from the card to take his family of four to Europe recently.

And I thought, “Wow, this is something that more business owners can take advantage of.”

Now there is, I'll put a caveat.

You've got to understand what the points are worth versus the credit card fees that you're paying on transactions.

But certainly, when you sign up for the card and you get 200,000 points for not doing anything except for just spending as you usually would.

That's a pretty good benefit and that's a benefit that's only available to business owners because the card is only available to people with an ABN.

So, in today's episode, what I want to do is just remind you of a few advantages that are available to business owners.

This is not meant to be tax or financial advice.

You should speak to your relevant adviser and determine with uh whether any of these strategies are right for you.

But with that caveat in place, let's just go through and remind you of a few advantages that exist for business owners that you may not be taking advantage of.

Because the government wants you to spend, they want you to go out there and stimulate economic activity.

And my first example of vehicles is definitely one which a good mate of mine took advantage of during COVID, he was going to buy a new car anyway.

And then the government introduced the instant asset write off and he got a massive tax benefit for buying this very nice new car.

And I know that benefit doesn't exist anymore. They had the temporary full expensing for a while.

But you can bet that if there is serious deterioration in economic activity, the government is going to want businesses to bring forward expenditure that they were planning anyway by offering tax advantages because that then can help kickstart the economy.

And maybe if there's a change of government in the future, there could also be some changes in policy in relation to the ability of businesses to write off certain expenditure.

Now when it comes to vehicles, of course, you can also lease them in a tax effective way.

And a number of my clients do this with very, I would say, tasteful branding on some of their cars which they use also for marketing purposes, particularly some of my clients who are in the middle and outer suburbs with big trucks or UTEs that they take to various industrial sites.

And one of my clients actually told me, “You need to have these cars because if you've got a normal car, your tires just aren't going to last. You need to have those big, they're not monster trucks, but they're pretty burly type of trucks.”

So, if you're not currently taking advantage of the tax benefits that are available to you as a business owner with your vehicle, you should be doing that and a little aside because not all the benefits that I'm going to talk about today are provided by the government.

Certainly, the credit card that I just told you about, that's a business credit card provided by a bank.

And another thing that you can do when you get a car is to check what service packs they have available for business owners.

So, a service pack is where they say for the first three years you get free servicing as an ABN holder.

Have a look into that because that can also be a nice little benefit.

So, the first one is vehicles.

Next one is home, office expenses and also technology and hardware, like that.

So, follow the guidelines but also take advantage of what you're entitled to.

And if you're currently working from home at a workspace, which is a little bit crummy, then it might be time just to upgrade.

For Father’s Day this year, my wife organized for a new ultra-wide PC screen.

And that was something which I'd been meaning to get for a while.

And I said to her, “Did you keep the receipt?”

She said, “Of course I did.” And I said, “Great.”

Because that is definitely a business expense.

Another thing that you can be looking to make sure that you are expensing and deducting is things like networking events, business travel and also your own professional development.

So, working with a business coach like me, that is certainly a legitimate business expense.

And the ROI that comes from working with someone like me just increases more when you get a tax benefit from the fees that I charge.

And one of my clients also talking about networking events and also business travel.

I invited a few of my Sydney based clients to the Footy earlier this year and one of my clients in Queensland at the time I knew really liked Footy.

And I said, “Hey, I don't have a big client base in Queensland. So, I'm not going to come up and do the event in Queensland. But why don't you come down and join us for the event?”

And he said, “Yeah, actually, I want to visit some clients and I'll make a trip out of it.”

And it was a certainly a legitimate business visit because he was attending the event with me. But also, he was seeing a number of clients.

Another one I want to tell you about is superannuation and retirement planning.

And one specific strategy that a few of my client’s use is self-managed super funds which allow for direct investment in commercial property.

And you can actually have your business pay rent into your self-managed super fund.

You've got to follow the rules very carefully.

But as a business owner, that is quite a nice little advantage that is available to you if you want to explore it.

Another one that I've seen a few clients do is hiring family members or family friends.

So, a number of my clients have their partners working in marketing administration.

One of them actually his partner is the top agent in the firm.

Now you do need to make sure you're paying them a fair market salary for the legitimate work that they perform.

But that is a massive advantage that you have as a business owner to be able to employ people.

So, if you're not currently doing that, that's something to look at.

Another one I wanted to remind you of is just marketing.

And I think a lot of the time in commercial real estate, we're very much focused on vendor paid advertising.

Paid for by the vendor to create more presence for our business, but also obviously to market the asset, but you can augment that with your content creation and online strategy.

So, one of my clients, Daniel O'Brien at X Commercial is the most obvious example of this.

And if you have a look at his Instagram page, clearly, he is investing in top notch content creation.

But that's all-legitimate business expense that has an ROI.

But the ROI, just like we work with a coach or any expense that you get a tax deduction on, increases more due to the fact that you can offset that expense against the business revenue.

And lastly, I want to remind you that your accountant and other advisors that you have to help you run your business are of course legitimate business expenses.

And it's very important to be compliant with relevant laws.

You don't want the ATO breathing down your neck.

And if they are breathing down your neck, you want to make sure that they're very satisfied with the way that you're running a business and the best way to do that obviously is to get the right advice.

So, today's episode is about making smarter financial decisions and taking advantage of your status as a business owner.

At the very least if you are not earning any points for the expenditure that you make as a business owner.

You know, a lot of expenses, you have to make them on a credit card because there's no other way for you to actually incur that expense or to make that payment, right?

And think of it like a lot of software.

So, you may as well be earning a benefit for that because otherwise you're just spending money without actually getting any additional return that you are entitled to because the banks want your business or the credit card companies want your business.

So, look, I know probably, I haven't told you anything really new today, but I think people often need to be reminded more than they need to be taught.

And I guess I always knew that of course you can get a business credit card, but I just, I don't know, I didn't action it for some reason.

And once I did, I've been very happy with it because I'm looking forward to all these points.

All right. That is our episode for today. Thanks so much for listening and I will speak to you soon.