Frequently Asked Questions: Property/Holdings

From WikiProperty

What is a property?

A property is a leaseable unit. It is what a lease can be assigned to and what you collect rent from (hopefully). A collection of properties can be included in a holding. You might buy a building that has three tenants in it. This would normally be three properties. It is possible that one of the tenants may have a sublease. In this case you have two tenants and one of the tenants has a tenant. You would in this case only set up two properties. You may have purchased the building with one mortgage (still with multiple tenants). The building would be setup as a holding with the mortgage payments against the holding. Within a property the 'mortgage ratio' will be used to allocate to mortgage to the individual properties. In a similar way expenses can also be applied to a holding and the 'expense ratio' will assign costs to properties. Obviously this would only apply to expenses the landlord was covering.

Why have Holdings?

A Holding is a way of grouping your properties. You may have a trust or a company which owns the property(s). Reports can group be for a property or a holding. Normally properties will be grouped by ownership for GST and reporting reasons. For example a GST report should be for all the properties which are included in a trust. An property financial projection report can be run for a property or a holding. A holding can include other holdings. For example a trust could own two companies which each own properties.