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01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
20. Comparison Between Depreciation of Lease-hold and Building
Look at the two examples we just discussed and notice the totally different results achieved by depreciation. We chose the example of a lease-hold, because it can be seen so easily that after a number of years nothing of your investment remains at all. In the case of the building the value of your investment may have gone up considerably. It is well possible that the two syndicates might have taken an identical depreciation allowance. In the leasehold case you would have actually ended up with your investment completely exhausted. In the other case your investment might have been enhanced.
These examples do not imply that lease-holds are necessarily an investment of a lesser value than an outright purchase of a building. It could be the other way around. The building could be in a deteriorating neighborhood and lose its value. A lease-hold, especially a long term lease-hold, (say one for 99 years) could be on such favorable terms, that its value may increase after a number of years. It may be possible, for instance, to raise the rents of the subtenants substantially, while the rent to be paid to the owner of the property might remain the same. Thus the dollar value of lease-hold, if it still has a long period to run, would increase.
All we want to show is that depreciation is not solely a tax "gimmick" but actually may affect the value of your investment over the years.
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