apportioning cashflow+

My partner and I have an investment that is now cash flow positive. He has $250k in the offset account,and I have $40k. After the rates and body corporate are taken out, how do we aportion the balance of the rent each month? We want to keep the money in the offset, just keep a track of whose is what. The original loan was $440k as interest only.
 
After the rates and body corporate are taken out, how do we aportion the balance of the rent each month?


Hi, usually you would look at the percentage of ownership on title. Maybe draw up a spreadsheet showing the opening balance for each of you and then split the expenses and income per ownership to keep a running balance.

I take it that you don't use the "what's mine is yours and yours is mine" approach to finances?
 
We are 50/50 on title. Wondered if it could be worked out taking the whole of rent, less interest, less expenses = then the surplus of rent over interest due equals the whole, then I would get 16% of that surplus as my share of the saving on interest because of the amount we have in the offset account.
We keep our finances, expenses, bank accounts etc. seperate.
 
Apportioning Cashflow +

Hi, the questions I have are: (1) Is this the only investment property you plan to purchase? (2) Do you have a PPOR and is there a debt on this property? (3) The reason the IP is now cash flow positive based on the information provided is that conjointly you have $290,000 in an offset account which reduces the interest you pay.What are you planning to do with these monies? (4) What do you do with your tax? Do you only advise the ATO that you receive 16% of the income whilst claiming 16% of the interest and 50% of all the other expenses as deductions? Or do you declare 50% of income and 50% of all deductions?

It appears as though you are complicating matters. Suggest to your partner that he moves $210,000 into an account in his name then split everything 50/50. You may not be cashflow+ but life will be simpler.

The old KISS method.
 
It appears as though you are complicating matters. Suggest to your partner that he moves $210,000 into an account in his name then split everything 50/50. You may not be cashflow+ but life will be simpler.

The old KISS method.

If you want to keep finances separate, then the above is the logical thing to do. I don't know how you can function with keeping finances in that manner. Why would you have joint investments, then be so petty with the offset?
 
As the expenses are paid out of the rent first, I would declare 50% of the rent as income, claim 50% of the expenses. I have said the $40k is mine and anything else over that left in the account is his, therefore would I be paying tax on 50% of the rent,but not actually receiving that because it will be left in the account for him.
I probably wont worry about the 16% just trying to work out how to work it out. I think you should realise there would be a lot of extenuating circumstances and things you dont know before you remark how petty I am
 
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For tax purposes you have to aportion the rent and expenses 50:50 as that is what is on title.

But in reality, if you want to do it differently in terms of who's money in the offset growns by how much with each rent payment, then do whatever works for the 2 of you.
 
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