Keeping track.

[Roady]

I have just purchased my first investmet property after using PIA to help assess it. I now want to get ideas on the best way to keep track of it to be sure it is perfroming as expected. eg can PIA be used to track a properties perfromance or is a speadsheet just as good ?

[rickmick]

G'day Roady,

I use PIA to experiment and assess, but I find that a sreadsheet tailored to your own indivdual needs is the best for keeping track of current holdings.

I'm far from being completely computer literate but have been able make a spreadsheet with all the things in it that I think are important to keep track of. It is very handy at tax time too.

There are also some property management type programs available which are advertised in API magazine.

Also, if you search through previous posts I seem to remember some generous people having attached their own spreadsheets.

Rick

[PIppety]

Roady,

It is an interesting subject that you have raised and something that is dear to my heart :)

I use Property Manager Pro in conjunction with a spreadsheet that I use just for tax purposes.

I find PMP very basic and it really annoys me that programs such as Quicken and MS Money cater alot for shares but neither of them cater for general property management (ie. tracking rent and expenses etc).

I hope that one day they will finally get their acts together and put something out that caters for all investors in one package !

Cheers
PIppety

[dwyerfam]

Hi Guys,

I use Quicken 2002 Personal Plus SE to manage the financial affairs of my I.P's. It can be done. I think the most useful way to manage all the data you enter, is to "categorize" and "subcategorize" all the income and expenses going in or out of any bank account you have, i.e. all items that relate to each IP's - taxable and non-taxable expenses can be kept separated, you can record your own personal household expenses - rates, phone expenses etc etc. As a hint, I have all my I.P. expenses categorized (for each house) in the same manner as ATO's rental property worksheet. Once you have set up all the categories, then you can make any report to suit (i.e. a report for taxation purposes or a report on the current running expenses of all or one I.P. to date, or a report of all the rent paid by the tenants (by Qld law, you are required to give them a record of the rent they have paid, if they ask for one) or any type of report you desire of any income and expenses recorded in the prg. It's that simple.

I think 'Sim' knows a bit more about the Quicken Prg then me but he has pointed out to us that using this prg was easy (once you have mastered it - and it does take time). I found the Property Manager Pro is very limited in what reports it can do. The Quicken Prg also has an "Address" database (and even an a Home Inventory, Personal records database in it as well) which I can record the tenant's contact details in it etc. I have not fully explored all the other features in the Quicken Prg for I.P. issues such as CGT etc.

Danny D.

[PIppety]

Danny,

Thanks for this info because I have looked at Quicken 2002 several times (just the box !) and been disappointed that it didn't seem to cater for what I wanted (ie. an all in one package) considering the fact that I currently download all my transactions from Internet Banking into Quicken V7.

I would be really greatful if you or Sim could provide me with more detailed info (even if it's via PM) on this subject because it's really been bugging me !

Cheers (one happy)
PIppety :D

[dwyerfam]

Hi PIppety

As you have Quicken V7, you can still use this prg to do what I did. I had Ver 6.5 and was able to do the same. As I indicated, setting up the categories is the important part. Here's an example how I did it my way:

Category
Income
===>Rental Income (is a subcatgory of Income)
=====>Rent from I.P. One (is a subcatgory of Rental Income)
=====>Rent from I.P. Two ( " " " " " " )

Fixed Expenses
==>Investment Properties (is a subcatgory of Fixed Expenses)
=====>Agent's Fees & Commission (is a subcatgory of Investment Properties)
=======>I.P. One (is a subcatgory of Agent's Fees & Commission)
I.P. Two (is a subcatgory of Agent's Fees & Commission)
Bank Charges (is a subcatgory of Investment Properties)
I.P. One (is a subcatgory of Bank Charges)
I.P. Two (is a subcatgory of Bank Charges)
Borrowing Expenses
I.P. One
I.P. Two
Cleaning
I.P. One
I.P. Two
Council Rates
I.P. One
I.P. Two

and so on. You can do the same with your own household/personal income/expenses etc.

Enter all the bank accounts you have and when you have spent something (from any one of the accounts) on say one of the I.P's, then just select the approximate "category" (as shown above). I assume you know how to do the reports etc. (trail and error helps)

I do not bother with the download of data from the bank as I check my accounts each day (when I can) and just enter in the transactions there and then. I found that the downloaded data from (some) banks can muck things up - like I only wanted data for recent transaction, not a whole month's worth, or and in wrong date order or date format etc.

Hope the above makes sense.

Danny D.

[raoul]

Hi,

I've been doing something similar since Quicken 4. Except, instead of creating multiple sub-categories for each of the IPs, I created "classes" for each. This way, for example, I enter the category, eg:

Income:Rental Income/IP_1

The colon ":" separates categories and subcategories, and the slash "/" indicates the class - i.e, nickname for the IP.

Then, when you do your reports, etc, you can also sort by class to get a better picture of how each property is performing. When kicking off a report, you can also choose to only include certain classes - click on the customise... button.

I created another class "rental" for generic charges related to IPs that are not readily classifiable to any one particular IP.

I handle everything related to cash-flow for my IPs but have not tried tracking depreciation within Quicken, nor incidental expenses such as phone calls, travel, etc. So my reports are not 100% complete, but give me a feel for what's happening.

PIA is great for determining whether a property is suitable or what-if scenarios, etc. but I feel that it is not really suited to tracking historical performance - try entering the last 7 years of actual interest paid to the bank on a P&I loan and you'll see what I mean. (But please take this with a grain of salt - I have only started using PIA and I'm not an expert in its use.)

HTH.

cheers

raoul

[Fester]

I use Rent Manager, from an Adelaide company.

Check this website: http://www.cashflow-manager.com/australia/products.asp

[Sim]

My strategy is similar to what Raoul described. In Quicken, classes are your best friend !! :D

One of these days I'll get around to documenting my strategy for managing properties in Quicken !

[Kathryn]

Hi,

I'm with Raoul. I've been using Quicken for years and when we started buying investment properties I just set up a class for each one (R1, R2, R3, etc.).

Whenever there is an expense I put it in the Rental Expense category with a /R1 to show that it was for Rental Property #1 and I can print out reports at the end of the year for tax.

I also have a spreadsheet set up in Excel that summarises the value, amount owing, weekly payment, income, insurance, etc. for each property. Between the two programs it seems to cover everything I need.

Cheers,
Kathryn

[Jas]

I use the Money program. It has classes similar to Quicken, and its bundled with a bunch of other stuff, so it’s free.

It has lot of reports, you can customise the living daylights out of it and links to ideas on the money site.

Jas

[simonjulie]

Hi Roady
Keep it simple and track what comes in and what goes out.
An Excel spreadsheet is all you need.
Kind regards
Simon

[Roady]

Thank you all for the feedback. It will, most likely, take me a while to digest and check it all out.

[CJT]

I also am new to the game and started by moving in with the OIL (one I love) and putting my PPOR of 4 yrs onto the market so I didn't have to do any due dilligence other than finding the right PM and market rental return. So my question is (and I have no experience with) would the PIA program cater for all my needs (beening idiot proof) and can be used with a revolving LOC?

CJT

[Ross Sneddon]

Hi

I looked at Property Manager Pro as it has had extensive advertising in the Property Investor and e;sewhere.

I downloaded the demo model which allows 28 days or something to evaluate, and like others found you also need a spreadsheet or other support facility with it.

My suggestion is leave PMP alone. It is a load of rubbish.

Regards

Ross

[HHH]

Hi Everyone

I am just starting to learn how to setup Microsoft Money as suggested above.

Would anyone be willing to send through more examples of categories and classes they use?

I am also having trouble working out when to use a category and when to use a class.

Finally, how do you know which categories should go first?

For example, which would be the better setup of the following examples:
1. Expense:Loan Interest:IP/<property ref>
or
2. Expense:IP:Loan Interest/<property ref>
or
3. Expense:<property ref>:Loan Interest

Basically, is there some way you can report on all possible combinations?

I could see all three being useful, that is for 1. show me all loan interest paid for all properties. for 2, show me all expenses for all properties only, and for 3, show me all expenses for a specific property.

I have limited accounting knowledge and I am only just starting.

Any help explaing classes and categories (ie. the difference) would be greatly appreciated and also the optimal setup so all possible combinations of reporting is available.

Cheers

[Patosan]

I guess it boils down to how many IP you are tracking.
Also what you mean by tracking.

I had simply used excel spreadsheets for one IP ... simple and cheap - love it.
Now I have started using MYOB Business Basics, this is however essentially an accounting package and not tailored to IP. But it's not so hard to tailor ... even I could do it after some trial and many errors.

If you don't intend to have multiple IP then stay with spreadsheets, K.I.S.S.

[austini]

Here is a rough idea of how to categorise and classify your transactions:

Think of classes as things such as you, your partner, joint (stuff you own together obviously) and each individual investment property etc.

By using Classes you don't need to duplicate categories & subcategories. If you used a new unique category for each investment property you would find yourself having to repeat the same income and expense subcategories all over again. So in a nutshell the use of Classes means that just one set of categories and related subcategories can be used by as many people, properties, family trusts and other businesses all in the one file if you chose to do it that way. As Sim said earlier Classes are your best friend as they keep your structure simple and consise.

So perhaps set up the following classes:

You
Your Partner
IP1
IP2 ...

Now set up expense and income Categories called something like "Rental Expense" and "Rental Income".

Under "Rental Expenses" create subcategories such as the following shown at this ATO link .

http://www.ato.gov.au/individuals/content.asp?doc=/content/31258.htm&page=1&pc=001/002/002/005/003&mnu=1009&mfp=001/002&st=&cy=1

If you set things up this way you can use either Money or Quicken to filter your reports using Classes and Categories etc. For example come tax time it is a breeze to print out a seperate tax report for each person, business and property just by selecting the appropriate class.

When you enter your transactions in Quicken they should be in this format:

Cat:subcat/Class

Have a look at the Help in either Money or Quicken also to get some further info.

But do yourself a favour and enter a few transactions to start with in this format then spend heaps of time playing with the Report Customisation options for Classes and Categories and it will all fall into place pretty quickly.

Hope this helps.

Cheers - Gordon

[austini]

Oops forgot something that might help.

Think of categories and related subcategories as income and expense items. From an accounting perspective they were not really designed to represent entities such as people, businesses and properties etc but as income received and expenses incurred by these entities (ie classes in Quicken speak).

If you are really desperate and want to understand in "laymans" speak how Quicken and accounting fit together then the following link (Introduction to Accounting Using Quicken) will be helpful:

http://stephenville.tamu.edu/~kstokes/INTRO.HTM#elements

After reading this article I decided that was all the basic accounting I would ever need to know and went back to what I'm good at which is drinking beer.

Cheers - Gordon

[HHH]

Hi Gordon!

Man, thank you very very much for that reply.
Everything you have said makes total sense.

I have just started playing with Money, and it is fairly easy to pick up. Like you said, I just need to spend the time.

Again, much appreciated.

Dan

[austini]

Your welcome Dan.

If you get stuck with any area of MS Money visit the following Google MS Money discussion board:

http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&safe=off&group=microsoft.public.money

The stuff there is awesome and the search engine is very simple to use and will retrieve really useful stuff. A lot of the members are in the US but quite a few Aussies also post there. You will find that most stuff discussed there is universal to all versions of MS Money.

What is really great is that you will not only find heaps of excellent stuff relating to the technical user issues but also solutions to just about every bookkeeping and accounting issue including investment property you would ever come across.

Cheers - Gordon

[HHH]

Again, thanks for that.

I will check it out.

You are too good to me!! :) :) :)

[Aceyducey]

Anyone using MYOB will be interested to hear about their merger plans...


Solution 6 & MYOB to merge
Two companies that own the financial software used by 480,000 small businesses and 6000 accounting firms are to merge in a $435 million deal to create Australia's most valuable listed technology group.Source: AFR http://afr.com

AFR & SMH & Age this morning are all reporting it.

Cheers,

Aceyducey

[sbe]

I use money to track mine.

Income goes into
"Investment Income", "Rent - {Property name}"

Expenses go into
"{Property Name}","{Category}"

Where Category is things like - Rates, Interest, Agents Fees, Maintenance, Improvements, Misc etc.

I played with extra classifications for a while, but this way is MUCH faster to enter transactions - and who wants to spend all day entering transactions.

Also
- Easy to find out total costs for any given property.
- Easy to keep Improvements out of the mix for tax claims (transfer to Dep'n schedule - on spreadsheet)
- Pretty quick to do a P&L on any property.

Good luck.

Simon.

[austini]

Hi Simon,

That is great if it works well for you.

Unless I'm mistaken as you accumulate more and more properties wouldn't you find your category list starting to become very large with the same categories having to be duplicated over and over again for each property?

When using MS Money I found that most of my property expenses are Recurring transactions which I have scheduled. And as I have the class detail already setup with these transactions there is no extra effort required. And as for manually entering transactions classes I have found it to be very minimal effort. I would have thought that as your category list became large due the my above comment then finding the correct category would take longer than selecting from a very small group of classes.

But this is the great thing about MS Money and Quicken in that there are many ways to achieve the users objective in a manner that suits them.

Cheers - Gordon

[DanielB]

I use MYOB to track my IP portfolio. I set up the Chart of Accounts with the ATO's income and expense categories to make reporting at tax time easy. Then I assign each IP its own job code. This way I rarely need to alter the chart of accounts. MYOB will give me profit&loss statements for each IP via the job codes or I can get a consolidated view.
I figured that if I was going to treat this as a business venture then I needed some proper business accounting software to track it all. There is a fair learning curve involved in getting up to speed with MYOB though - be warned ;)
Every time I get statements from my PM I enter the figures in and reconcile this with my bank statements to ensure the accuracy of the figures.

cheers,
Daniel

[skater]

I also use MYOB. My accountant set it up for me a few years ago. If I have any problems it's just a quick call to the accountant. Not hard to use as its mostly basic common sense.

[ger]

The 2004 Quickbooks UK has a property version
maybe the new Australian Quickbooks will have one
see below
http://www.let-a-property.info/software/property-management-software.htm