Property manager Pro-4 Question

I was hoping that someone here could help me out.

First Question:

I’m the process of purchasing an investment property but unsure how to enter the numbers into the accounting software package (Property manager Pro-4)

Purchasing costs such as banks fees, Stamp duty and pest & building inspection, I have thought belong in buying/selling costs section

But I don’t understand the Allocated and Unallocated amount, what do I do here?
I have enclosed a screen shot of what I have done to help explain. And have I done it correct. I hope I have uploaded it correctly.

Just one more question, buying costs, I have been told that you claim this over 5 years, is this correct and what defines these cost: is it, Stamp duty, initial bank cost, bank cheques, building and pest inspection.

I have been told the buyer’s agent fees can not be claimed not until you sell the property.




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From the Help Tool Bar...

Writing off Buying Costs

You might choose to “write off” certain buying costs against your rental profit & loss over several years. Property Manager lets you achieve this by letting you enter an amount into the “Allocated” field of a buying cost while at the same time adding a corresponding expense transaction into the property’s Rental Expense Browser.

You could achieve this manually by adjusting the Allocated amount each year and manually entering a rental expense into the Rental Expense Browser. However, a faster way is to load the Rental Expense Browser and use the Journal Entry option to achieve both operations in one simple step.

Property Manager’s Capital Gain report uses the “Unallocated” portion of any buying cost that has not been fully written off to calculate the cost base and the “indexed “ cost base for a property. Again, you should always seek the professional advice of your accountant or tax agent to determine the period over which buying costs can be written off.

I don't use this part of the program.
Have I found a Solution?

Thanks for the feed back, however I'm still not sure how to manage purchasing costs that can be spread over 5 five years.

Looks like I need to keep the records separate from the Program i.e. in a excel spread sheet. Is that what every one else is doing that uses Pro4.

Therefore I don’t put the purchasing expense in the expense transaction, and only record it in the loan manager as a drawdown if funds are taken from the loan.

I run two system to keep tract on my finances, a simply exell spread sheet and property Pro4, and every 6 months or so., I compare the two and guess what, I always find mistakes. Eventually I would love to just run one program and that being Pro4.

Just a thought, will this work? Lets say the purchasing cost are $1000.00 could I create a new category under expense (Purchasing cost) and divide the cost over 5 years by pre date i.e. 2009 $200, 2010 $200, 2011 $200 until I have spread it over 5 years.

Would that work?
I use PM Pro for my rental properties.
However, I use it to simply record rent income and interest and other expenses.
I also use it to record items for depreciation purposes.
At tax time, I print the reports and give them to the accountant.
The settlement statements from the conveyancer and bank for each new purchase go to the accountant who decides what gets expensed int he current year, what doesn't get expensed at all and what gets amortised over 5 years. I don't need to know that stuff. I'm a property investor. My focus is on making money out or property, not being an accountant.
As you gain more exposure to the market and learn more about the value of leveraging your time and seeing the big (strategic) picture.
I know that doesn't answer the question you asked, but it does answer a valid question.
Focus on your strengths and leverage the skills of others.
Thanks Rob
I have no problems about leverage, I'm about to start the process in purchasing another property and I use Buyers agents:), (second time) I find my time is better spent at places like Bali than driving around the country side doing home inspections, however I work long rosters in PNG and the last thing I want to do is house searching.

I had given the stuff to the accountant last financial (08) year, and when he did last one (09) I question if he claimed the Purchasing cost (divided over 5 years) mmmm no he didn’t.

Leverage doesn’t work all the time (human factor) and I like to have my checks and balances.

So I guess I’m looking at systemizing my process of record keeping,

Hi Stephen and others,

As far as I am aware borrowing costs of over $100 must be amortised over five years and you can do that as twobobsworth has said, by journalising the borrowing costs which you've entered as a buy/sell cost to the rental expense category of borrowing costs.

As far as the rest of the purchasing costs go as far as I know they form part of the cost base for calculating capital gain in the event of selling in the future.

As each year of the borrowing costs is then automatically made an expense that amount will be 'allocated" and the remainder which will be done in years 2,3,4 & 5 will appear as "unallocated" until it gets "allocated" in years to come.

I'm still learning all this too. I've had Property Manager Pro Version 3.14 for quite a few years and am upgrading to version 4 this week. I'm also trying to get to grips with PIA software which will take some time.

First post for me. I've been reading for a while and will share a bit more of my story later.



Problem solved

Talked with the accountant and I think he was happy with my approach,

I kind of mentioned before how I thought I should do it and now I’m confident that it’s the correct way. Total Borrowing Costs divide by five and enter that in Pro4 with Predate entries. (spread over 5 years)

As a back up, I explained the breakdown on how I did it in the Note function after 6 months I tend to forget why/how I did it, must be an age thing, and also I still entered the amounts in Buying/selling expense as I understand that this section isn’t linked anywhere else in the program.

So at this stage, I’m happy with my book keeping and looking forward to my Number 3 IP:)