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Set up parameters

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To help improve your efficiency and tailor the software to your needs, the Parameters section allows you to set up certain data so the software creates every analysis based on those configurations without having to change them everytime thus allowing to create custom-made reports. Please note that some parameters can be adjusted on a per analysis basis from Data Gathering window (step 2 in a Full Analysis).
  1. Annual Depreciation Rate
    2.  The rate of depreciation to which a property is subjected to every year (Generally 4%).
  2. Cash on Cash Rate (Before Taxes)
    3.  The ratio of annual before-tax cash flow to the total amount of cash invested, determined as a percentage by the owner-to-be.
  3. Marginal Income Tax Rate
    4.  Consist of being the current owner or owner-to-be's percentage of taxes paid (or to be paid). If the user doesn't want this data into the Financial Forecast section of the report, he'll need to write down 0%. The user's clients are not obligated to reveal their personal tax information; although it would allow them to obtain a possible resale price for the property. This option can be adjusted so it comes out on the report and their clients are at least aware of this possibility.
  4. Debt Coverage Ratio
    5.  Ratio required by the Financial Institutions so they know the investment is not too much of a risk. The minimum required is 1,20%.
  5. Taxable Portion of Capital Gain
    6.  Determines the taxable percentage of the capital gains.
  6. Discount Rate 
    7.  This rate will allow the user to see updated amounts (ex: generated cash flow, property value) seeing as today's dollar does not have the same value as the last few years.
  7. Capital Gain Exemption
    8. Represents the tax exemption on the capital gains to which the owner or future owner is entitled to.
  8. Depreciation at Year 5
    9.  Check-mark this option if you wish to see the amortization at Year 5 in the Financial Forecast report. Usually, an analysis will take into account the fact that the property will be sold during the 5th year of ownership, so no amortization is necessary at year 5.
  9. Growth Rate
    10.  Approximate increase of income and expenses on a yearly basis. This data is compiled for the Financial Forecast.
  10. Length
    11. The duration of the mortgage is to amortized. This is basically the number of months it will take fully pay the mortgage.
  11. Interest Rate
    12. Interest rate for the mortgage. The interest rate may vary from one financial institution to another.<
  12. Payment Frequency
    13. The frequency at which the mortgage payments are to be made.
  13. Compound Interest 
    14. This option allows you to calculate the interest paid on the original principal and accumulated unpaid interest that is accumulated during the length of the mortgage and increases until payment is to be done. The interest for a Canadian mortgage is compounded twice a year while an American mortgage is compounded 12 times a year.
  14. Compensation Tax
    15.  Tax calculated on the real estate agent's commission. The amount varies from one region to another as the tax percentage is different.
  15. Loan Insurance Premium Tax
    16.  Tax applied on the loan insurance premium (ex: CMHC in Canada)
  16. Display Ratios
    17.  If you choose According to Acquisition Cost, the ratios will be calculated according to property price added in the Acquisition Cost box. If you select According to Market Value, the ratios will be calculated based on the amount entered under the Fair Market Value box. The Acquisition Cost and Fair Market Value can be added under the Cost and Financing section in the Data Gathering section.
  17. Vacancy Rate
    18.  Allows you to add the vacancy rate of your area so the software can use this data in the analysis and having a more accurate profitability analysis.
  18. Bad Debt
    19. The percentage of Bad Debt for the property you're working on.
  19. Down Payment
    20. Allows you to indicate the default down payment percentage to be used for all your analyses. You can also change it while doing the analysis under Cost and Financing.
  20. % of Acquisition Cost for building
    21. If you haven't detailed the Acquisition Cost (Total Acquisition Cost) and check mark Detailed Acquistion Cost (in Cost and Financing), the percentage added here will be alloted to the building and the balance to the land.
  21. Detailed Income/Recurring Expenses
    22.  Will automatically be able to enter detailed income information under Income and detailed expenses under Expenses.
  22. Detailed Acquisition Fees
    23.  When you create a new analysis, once you've added the Acquistion cost, the software will calculate the building and land value.
  23. Consider Acquisition Fees as Down Payment
    24.  Checkmarking this will automatically add the acquisition fees in the down payment amount.
  24. Include Acquisition Fees in the Expenses of the First Year
    25.  As the name state, the acquisition fees will be taken into consideration when calculating the expenses of the first year.
  25. Import Property's Picture(s)
    26.  This option will allow you to automatically import the property pictures when importing data from your MLS system.
  26. Save
    27.  Click on Save to save your new information. If you click on the arrow, the data will be automatically saved and you will be moved to the next window.
Mots clés::  acquisition fees ,  ajust ,  capital gain ,  expenses ,  Financial Forecast ,  income ,  insurance ,  interest ,  parameters ,  payment ,  ratio ,  tax