Do You Want Good Real Estate Investment Software?

If you’re a real estate investor or agent trying to create the cash flow, rates of return, or profitability for rental properties with your own Excel spreadsheet and have become frustrated by the process and are now ready to buy good real estate investment software, then you fall into one or more of several categories.

  1. You created your own spreadsheet but are feed up trying to learn how to compute all the formulas
  2. You don’t know all the formulas
  3. You’re not sure that you’re including all the critical measures and rates of return required for a rock-solid rental property analysis
  4. You’re not sure what measures and rates of return to include
  5. You don’t know enough about Excel to produce professional-quality reports you would feel confident to present to clients, lenders, or partners
  6. You rather make money on the deals, rather to spend the time to learn how to make quality presentations that can present and perhaps close the deals
  7. You rather make money selling investment property than to develop an application for Excel that might help you sell investment real estate
  8. You have decided to use the “wheel” someone else has developed rather than continuing to spend the time and effort trying to re-invent the wheel
  9. You simply don’t have the time to spend any longer

Please trust me. Having sold real estate investment property as an agent, broker, and investor for the past thirty-years I understand. Although spreadsheet programs like Excel provide excellent features that make it possible for just about anyone to create their own rental property analysis solution, it does require some learning and an ample amount of time and effort. Plus, to make it most meaningful, you also need a good understanding of real estate investing nuances.

When I developed my own real estate investment software, I already had about thirty years experience working with investment properties and investors. So it wasn’t an issue for me of not knowing the formulas for the rates of return and measures required to create a sound and meaningful income property presentation. Excel, on the other hand, was quite a different story. And I must admit that it took me countless hours to master it.

Okay, so why did I? It certainly wasn’t my first choice. Initially I purchased two different real estate investment software programs without even a thought about creating my own spreadsheet. But after discovering so many weaknesses in both programs I simply felt that I could get what I wanted only by creating my own program.

But I digress.

This article is not about me, it’s about you and your requirement to buy a good real estate investment software solution that will create the cash flow, rate of return, and profitability analysis and presentations to supplement your real estate business. And the good news for you is that you can. Thanks to the web you can locate, purchase, and download an investment software solution without leaving your desk. Plus, it doesn’t have to cost you an arm and a leg-you can be up and running for about two hundred dollars.

Here’s some advice. Foremost, be sure to purchase the software that you need. If you plan to work with investment property only casually then you might not need a program that includes all four elements of tax shelter. If you are more engaged in real estate investing and are seeking to build or grow a real estate investing business then definitely consider a program that will compute taxes. Also, make sure that the program includes a marketing package or executive summary if you plan to market rental property in addition to analyzing it.

After all, regardless what anybody says, good real estate investment software is good only when it can meet your expectations and in turn service your business needs.

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Taxes For Online Business Owners – Review of Business Expenses

Taxes for online business owners can be a bit tricky. If you get involved with the wrong people, you might end up taking some unnecessary risks. Therefore, it is always best to get your tax advice from the IRS website. Here we are highlighting what IRS dot gov says about business expenses; however this is not intended to be tax advice.

What is a Business Expense
When you have a for-profit business, you can deduct expenses from the gross income. This is defined as a cost of carrying on a trade or business.

What Are Legitimate Deductions
The key words in the definition appear to be ordinary and necessary.

Ordinary – An ordinary expense is what most people would consider common and accepted. Think of this as your “average man” expense. Would the average man say yeah, you need that to do business?

For example, office supplies such as paper, pens, and broadband service would be considered ordinary.

Necessary – A necessary expense is an expense that is helpful and considered appropriate for your business. It does not have to be absolutely needed but it does need to be considered helpful and appropriate.

For example, a keyword research tool is not absolutely necessary for Internet marketing, but it sure is helpful and definitely appropriate for an online business.

The next thing you need to determine is where the expenses fall. The IRS gives three broad categories:

  • Cost of Goods Sold
  • Capital Expenses
  • Personal Expenses

Cost of Goods Sold
When you manufacture or buy products for resale, the chances are high you will need to determine your cost of goods sold. Some of your regular expenses may be included in this cost and this is where people tend to fudge. If you deduct your expense in cost of goods sold, you cannot deduct it again under business expense.

General expenses included in cost of goods sold:

  • Cost of product– This will include the price you paid to manufacture, purchase and ship the product.
  • Storage cost– Storage is the cost of warehousing and refrigeration of products and product materials.
  • Direct Labor Cost – This is the salary you pay employees to produce your product. It does include contributions to annuities and pensions.
  • Factory Cost– Factory overhead is the price of rent, electricity, water, and other necessary utilities.

Capital Expenses
Assets in your business cannot be deducted. They must be capitalized and are referred to as capital expenses.

Capital Expenses include:

  • Business assets (although some can be amortized)
  • Business start-up
  • Improvements

Personal Expenses
Personal expenses are another place people get into trouble. The line between personal expense and business expense can be kind of fuzzy and you must be extra careful not to cross the line.

For example, part of your mortgage can be deducted if you have a home office. However, the home office can only be used for business work–otherwise it does not count.

The same can be said for broadband services. Now if your family uses the broadband too, then the amount you can deduct will be the percent your business uses it as compared to your family.

Taxes for online business owners can be complicated. However, with the right software and the right information, you can easily get everything in line and ready to go.