How to Access Every Real Estate Analysis Report in ProAPOD

One of the best features about ProAPOD Real Estate Investment Software is it’s ability to create a wide variety of real estate analysis reports simply by filling in the appropriate user-friendly form. It is automatic. The reports are generated for you instantaneously as you enter the data in the forms. When you go back to a form and change data, the appropriate real estate analysis report is also changed on the spot. So when you print the reports, they will reflect all the up-to-date data you want included.

Many of the forms required to create the reports appear when you open the ProAPOD real estate investing software solution. You simply click the form tabs and start entering. Fair enough.

But there are some forms required to create some reports that must be opened manually. To access these forms simply click More Reports on the toolbar. This will drop down a menu of numerous other reports you can create.

Select the report you want to include in your real estate analysis and ProAPOD will open the appropriate form. If you wish to hide the form later just go back and deselect it. It’s that easy.

iCalculator: Print Capability Added

The ProAPOD online real estate calculator (or iCalculator) has been updated with the capability to print. This way users can now compute the numerous calculations provided by the calculator, learn the definitions and formulas for dozens of those real estate investing calculations, PLUS print the results.

Here’s how it works.

The calculator uses the Windows print function and prints the screen. But it hides the headers, menus, and sidebar while printing so  only the calculator’s form, solution, and formula gets printed. This provides users with a great way to make the calculations as well as printing them out for reference or presentations to customers.

To use, simply fill out the form for the particular calculation you want to make and the Print screen button will appear below the Solution section after the calculation is made.

Just bear in mind that this method relies upon the Windows print function. And though highly satisfactory, it does limit the control ProAPOD is given to modify the result. So the reports are certainly not the caliber of those created in ProAPOD’s software solutions (which are meticulously formatted and absolutely top-notch).

Nonetheless, the added print capability does serve a useful purpose to users of the iCalculator and should prove  to meet with overwhelming approval as an update to an already-great real estate calculator.

This update is free to current users, as are all updates to the iCalculator. So you will be able to print your calculations the next time you login to use the calculator.

If you are not currently using iCalculator, you are invited to get 64% off the retail price. To take advantage of this exclusive offer and learn more about this unique real estate calculator simply go to real estate calculator special offer.

 

The Depreciation Tax Allowance Calculation for Rental Property

depreciation tax allowanceRental property depreciation (also known as cost recovery) is one of the biggest tax deduction benefits real estate investors enjoy by owning rental properties.

The beauty of the rental property depreciation allowance lies in the fact that it is simply a “paper loss” the real estate investor can write off during each year the rental property is owned without having to shell a dime from out of pocket.

The investor can legally deduct an amount for depreciation as cost recovery each year from the cash flow he or she collected from the asset during the past twelve months of ownership and therein lower his or her tax liability for that past year.

But unlike say, mortgage interest (which is also a legal tax deduction), real estate investors never have to fork out any money for depreciation on rental property.

In this article, we will discuss rental property depreciation – its concept, limits, application, and formula.

Depreciation

The concept behind a tax depreciation deduction is based upon a principal known as “useful life”.

The idea is straightforward. That no matter how grand and prestigious a building may be when it’s constructed, any physical structure does have a physical life and will eventually wear out, deteriorate, or become obsolescent.

In other words, brick and mortar is finite and realistically can only last for so many years.

Furthermore (as a result of this deterioration), the owner therefore is suffering a financial loss by owning the property (because it is deteriorating) and as such should be granted the benefit to “recover the cost” from his or her income taxes as a result of the property’s diminishing useful life.

This is the purpose for IRS form 4562. So an owner of rental income property can claim a tax depreciation deduction on any rental properties that he or she has owned for the past twelve months.

Fair enough. So let’s consider some of the limitations the IRS has in place for real estate investors who attempt to get this tax deduction for the rental income properties they own.

Limitations

In order for a taxpayer to be allowed to take a rental property depreciation deduction, the property must at least meet the following requirements:

  • A taxpayer must use the property in business or in an income-producing activity (a personal residence doesn’t count).
  • The property must have a determinable useful life of more than one year.
  • The property cannot be placed in service and disposed of in same year.

Likewise, the tax deduction for depreciation only applies to the physical structures (called “improvements”) of the property, not to the land. There is no cost recovery allowance for the value of the land.

What’s more, the depreciation begins when a taxpayer places property in service for use for the production of income (i.e., takes title) and ceases to be depreciable when the taxpayer has fully recovered the property’s cost or other basis or when the taxpayer retires it from service (i.e., transfers title); whichever happens first.

In other words, you will not get a tax depreciation deduction for your income property past its “useful life”, nor after you sell it.

About Useful Life

Useful life is a term used by the IRS to specify the number of useful years it attributes to rental property in order to arrive at the depreciation deduction allowable. The useful life is strictly used for tax purposes only, however, and does not necessarily imply the actual physical life expectancy of the physical asset.

In this case, the tax code currently regards the useful life for residential property as 27.5 years and for nonresidential property as 39 years.

For instance, a building that derives all or nearly all (80% or more) of its income from dwelling units such as single-family homes, multifamily, apartment buildings, condos and so forth is residential and thus can be depreciated 27.5 years. Property that derives its income from non-residential sources such as offices, retail space and industrial tenants is nonresidential and thus depreciated 39 years.

Okay, let’s move on and show you how to compute annual depreciation allowance.

How to Compute

For our purposes, we will refer to an annual depreciation allowance and ignore what the tax code calls the “mid-month convention.”

This convention applies to the year the asset is placed into service and whatever year it is disposed and states that you are allowed to take only one-half of the depreciation normally allowed for whatever month the property is purchased and then subsequently sold.

So we are dealing only with the depreciation tax allowance taken annually during the holding period in between purchase and sale.

First, determine the depreciable basis.

This is essentially the original value of the rental property improvements (remember, you cannot depreciate land).  Secondly, divide that depreciable basis by what the current tax code attributes to the rental property’s useful life.

Depreciation Allowance (annual) = Depreciable Basis / Useful Life

Example

Say you purchased a duplex thirteen months ago for $500,000 of which you attribute $400,000 to the building and $100,000 to the land. What is your annual depreciation allowance?

In this case the depreciable basis is $400,000, the useful life is 27.5 years because this is residential property, and since it is not in either the year of purchase or sale the mid-month convention is not applicable.

Depreciation Allowance (annual) = Depreciable Basis / Useful Life
Depreciation Allowance (annual) = 400,000 / 27.5 = 14,545

Illustration (click image to enlarge)
depreciation allowance calculation


Source: iCalculator by ProAPOD

Conclusion

There is much more to rental property depreciation then we have discussed here such as capitalized costs of acquisition and additions or capital improvements to the property. But hopefully you have gotten the idea.

Naturally, we strongly recommend that you always consult a qualified tax person before making any real estate investment decisions.

So You Know

iCalculator makes dozens of real estate calculations with the formulas. You can try it risk-free and save 50% (you pay just $24.95). Click here to learn more and get the discount.

How to Compute Cap Rate {Video}

Capitalization Rate (or cap rate) is undoubtedly one of the most popular returns used in real estate investing circles. By the same token, it is also one of the most coveted computations investors and brokers want to learn.

In the short video presentation below you will shown step-by-step how to calculate cap rate. Take a few moments to watch the video so you will know how to compute it the next time you meet with a real estate investor or simply trying to create a real estate analysis.

 

 

So You Know

Cap rate is just one of many real estate investing returns, ratios, and measures that are automatically calculated in ProAPOD Real Estate Investment Software solutions. To learn more about how ProAPOD can benefit your investing objectives visit our website at ProAPOD Real Estate Investment Software.

 

How to Construct a Sensitivity Analysis {Video}

A sensitivity analysis is a good way for real estate investors to measure a rental property’s financial performance based upon a range of various factors such as property price and down payment.

In the short video presentation below you can see up close and personal how easy ProAPOD Real Estate Investment Software makes it for you to run a sensitivity analysis based upon both property price and down payment. Take a moment to watch the video. Discover how ProAPOD can help you to construct a sensitivity analysis for your next real estate analysis.

By the way, though not shown in the video, ProAPOD does automatically create a Down Payment Sensitivity and Price Sensitivity report. A link to our website is provided below where these as well as all other reports can be previewed.

 

 

So You Know

You can learn more about this and other unique tools and features included in ProAPOD by visiting our website at ProAPOD Real Estate Investment Software.

 

Real Estate Calculator Label Change

ProAPOD has changed the label used on its website to identify it’s online real estate calculator from “Real Estate Calculator” to “iCalculator“.

The reason is due to the fact that the calculator is a web-based application with 24/7 online mobile access and the new label seems to better illustrate this “internet” fact. Technically, however, it is still a real estate calculator that has just been given a more fitting label.

The program has not changed, nor does the name change affect your account or login. You can still access the calculator as you always have been doing: go to the ProAPOD web site and click Login then enter your email and password.

If you are unfamiliar with this real estate calculator, let me summarize. It is a fully functional calculator that enables you to compute dozens of real estate calculations PLUS it provides the definitions and formulas for many of the real estate investing calculations. So it can be an excellent teaching tool as well as a calculator.

If you are reading this article then you are entitled to purchase the calculator totally risk-free at a 64% discount. To learn more about this offer and to start using the calculator immediately go to http://www.proapod.com/real_estate_calculator_fb.asp