What should be entered as a Property
In Pathfinder, an investment property is any property that is not your principal place of residence. That is, it can be an investment unit or commercial property, but it cannot be your family home. It is important to distinguish an investment property from the family home as it has a different tax status for associated mortgage repayments and for capital gains, if the property is sold.
Investment Properties can be owned by:
An individual or individuals - In the Ownership field, you can enter a property as jointly owned and nominate what percentage is owned by each individual.
A Trust - however, if you have an Trust, it is recommended that you use the Optimo Financial SDS
Do not enter under Property:
Your Family home - This should be entered as a Family home
How to add an Investment Property
To add an existing property:
If it is directly owned, go to the Current situation step (top menu), then the Assets & Loans sub-step. And then click the +Add Assets button (on the left menu).Then choose Investment property.
If it is owned by an SMSF, go to the Current situation > Super & Trusts step, add the SMSF, then click the Add investment to SMSF button and select Property
If it is owned by a Trust, go to the Current situation > Super & Trusts step, add the Trust, then click the Add investment to Trust button and select Property
Note that for existing properties, the value you enter in the 'Property value $' field is assumed to be the start-of-financial-year value (1 July), and property growth is applied from the start of the year.
To add a new property:
If it will be directly owned, go to the Cash flows & Goals step (on the top menu), then the Review Assets & Loans sub-step.
Then, click the Add new Assets & Loans button (at the end of the page), and choose Buy a new investment property
If it it will be owned by an SMSF, go to the Cash flows & Goals > Review super funds step
If it will be owned by a Trust, go to the Cash flows & Goals > Review trusts step.
Note that it is assumed that properties are bought and sold mid-financial-year (1 January), and the value you enter in the 'Property value $' field is assumed to be the mid-year value.
Modelling options for Investment Properties
Sell an existing Investment property
Buy a new, direct Investment property
Buy a new Investment property in an SMSF
Set a value for property growth
To set a value for property growth, on the 'Property value $' field, use the series builder field to edit the 'Index by' field. For more see How to use the series builder.
Include land tax and/or stamp duty
Pathfinder does not calculate taxes that vary by state, such as land tax and stamp duty, but they can be included in the modelling if you can calculate these values yourself (or do an internet search for another online calculator).
The fields to edit on the property are:
Set options for mortgage repayments
(e.g. pay off the mortgage early)
See instructions on the Secured loan help page.
Results for Investment properties
Other items related to Investment properties:
Strategy Development Service (SDS) and Background adjustment options
If the case includes complex analysis that you are not able to do in Pathfinder yourself, Optimo Support may be able to do some background adjustments to help you get the results you need. Depending on the complexity, this may be included as part of the standard support or additional charges may apply. For more details, please see Modelling outside the scope of Pathfinders' standard modelling.
Some examples of things that are outside the scope of Pathfinder's modelling and how Optimo support can help, are listed below:
Information required by Optimo Support
Examples where additional charges may apply
Specify a different property value for different years. e.g. if the property value has increased as a result of a renovation.
The value for investment properties and family homes is based on an initial amount that is indexed over the years. It can’t be modified year-to-year.
Please tell us:
If we just need to to do a one-off adjustment, then this can be part of standard support.
Purchasing or selling an investment property on a date other than 1st January
By default, property transactions occur mid-financial year (that is, 1st January). This means that when a property is bought, savings made in the first half of the financial year may contribute to the deposit and loan repayments to be made in the second half of the financial year. And when a property is sold, loan repayments are assumed to be made in the first half of the financial year, with the proceeds of the sale available in the second half of the financial year.
Please tell us what you would like to see, and we can advise whether a workaround is feasible.
Options for borrowing