Equity loan question

We have three IPs. We used equity loans from IPs 1&2 to fund deposit forIP3.

I'm trying to calculate total incomings and outgoings for each IP.

My question is: against which property do I put the interest on the equity loan as an outgoing? Is it against the IP its secured against OR is it against the IP it was used to BUY?

I would think against the one we used to buy, the logic being that if we hadn't bought it, there'd be no extra loan needed.

But it could be against the security property, coz if we sold that IP, we'd have to pay out that equity loan. Wouldn't we?

Thanks
 
Loans should always be applied to the property that the borrowed fund were used to acquire. Always IGNORE the security against which its charged against.

ie The (new) loans on 1 + 2 are deductible against# 3 NOT #1 or 2 since the new loans where used to acquire #3.

Why ??? It is possible to have other security used for the loan eg - Parents house, friends house, shares, a personal guarantee etc....
 
From an interest expense perspective its included for the IP its been used to purchase.

From an LVR perspective it's included against property that been used to secure the loan.
 
Thanks Paul and Rick. Am I on the right track if I add up all the monthly interest payments plus all expenses our PM sends us on each IP ( as they pay all maintenance, etc), plus insurances, then subtract off rental income. To see our overall positive or negative expenses.

What spreadsheet do you recommend for keeping track of these day to day expenses?
 
Thanks Paul and Rick. Am I on the right track if I add up all the monthly interest payments plus all expenses our PM sends us on each IP ( as they pay all maintenance, etc), plus insurances, then subtract off rental income. To see our overall positive or negative expenses.

What spreadsheet do you recommend for keeping track of these day to day expenses?

Yep, all income minus all cash expenses = your bottom line before tax.

I use a dedicated Property Portfolio Accountancy program called Property Manager Pro. Its no longer available for purchase in shops however I'm currently having my own equivalent software coded/developed.
 
Or spend 15 minutes a month loading it into Excel

Setup a structure where it has the same categories as ATO uses, and sums all these to the front page which gets sent to Accountant. Easy as pie.
 
Thanks Paul and Rick. Am I on the right track if I add up all the monthly interest payments plus all expenses our PM sends us on each IP ( as they pay all maintenance, etc), plus insurances, then subtract off rental income. To see our overall positive or negative expenses.

What spreadsheet do you recommend for keeping track of these day to day expenses?
 
Thanks Paul and Rick. Am I on the right track if I add up all the monthly interest payments plus all expenses our PM sends us on each IP ( as they pay all maintenance, etc), plus insurances, then subtract off rental income. To see our overall positive or negative expenses.

What spreadsheet do you recommend for keeping track of these day to day expenses?

Just create a list in excel
 
Back
Top