Accounting and Finance

Finance, Taxation, Insurance and Accounting related articles

Contributed By: Mike Phipps Finance on

If you read the papers you will no doubt have seen lots of press coverage of the ongoing investigations into our banks. What we have at present is a two-pronged process with a royal commission investigating potential misconduct and the Productivity Commission investigating competition, or lack thereof, within the banking sector.  Both processes appear to be primarily focused on consumer lending as regulated under the National Consumer Credit Protection Act, albeit commercial and business lending will no doubt get some attention in due course. Needless to say, finance brokers have been caught up in the various enquiries and the press have been none to kindRead More →

Contributed By: Mike Phipps Finance on

I have written previously about interest only finance and particularly the pros and cons of such a strategy. Setting aside the current pressure on lenders to restrict interest only funding I think it’s worth having a broad look at interest only finance, why borrowers and advisors advocate these strategies and why they may be wrong. In this article we will talk about interest only finance in the context of money borrowed to acquire an income producing asset such as a business or investment property. The central premise is driven by current taxation rules which essentially allow interest costs associated with a loan to acquire anRead More →

We are thrilled to launch our Industry Recommended Professional program! Below is a Q&A explaining the program, its benefits and how it works. What Is the Industry Recommended Professional program? Our industry has entered an age where the quantity of suppliers is great, but often the quality of work offered is not. Managers and prospective managers expend considerable time and money in their efforts to source professional service providers who understand this industry and specialise in it. The Industry Recommended Professional program allows such service providers to rapidly and easily distinguish themselves as authorities both trusted, and respected in our Management Rights industry. It isRead More →

Contributed By: Mike Phipps Finance on

We live in uncertain times. Disruption is everywhere. Unpredictability is the new normal and in a world of constant change who would dare to suggest what 2018 might hold. Yep, you guessed it, I’ll have a crack! Let’s look at 2018 with crystal ball in hand and tongue firmly in cheek. In no particular order and based on nothing but wild guesses, blind hope and a generous serve of optimism here we go………. 1. The word Like is banned from use by anyone under the age of 35, thereby rendering speechless an entire generation and having absolutely no negative impact in the national discourse 2.Read More →

ARTICLE BY JOHN PUNCH Ever since management rights sales began some 38 years ago, the standard method for calculating a sale price has been to apply a multiplier to the net operating profit of the business, for a one year period preceding, but ending as close as possible to the signing of the contract. Some lawyers and accountants are now proposing to allow for adjustment of the sale price at settlement to take account of any lots that may leave the letting pool between the signing of the contract and the day before settlement. Generally, we find that as soon as we inform any sellersRead More →

Contributed By: Mike Phipps Finance on

Here’s a scenario. Imagine that you have accidentally killed someone or maybe you have committed a major white-collar crime such as embezzlement. Now, imagine that you’ve gotten away with it. Years have passed and you’re in the clear. Trouble is, you are overwhelmed with guilt. Maybe you’ve had a change of heart, or just genuinely become a better person, and you wish to set things right. What should you do? Turning yourself in might give a sense of relief, closure and justice to those affected by your crime, but it will also cost the state a whole lot of money to investigate your crimes andRead More →

Contributed By: Holmans Accounting on

One of the most hotly debated and often misunderstood concepts when determining the profitability of an accommodation business is the concept of ‘maintainable income’. The concept of ‘future maintainable earnings’ is a longstanding valuation principle, and possibly the most commonly used method of valuing an accommodation business is the capitalisation of the maintainable earnings of the business. In a management rights context, the capitalisation rate is referred to as the ‘multiple’, whereas in other accommodation businesses it is generally expressed as the return on investment percentage or ‘capitalisation rate’. Determining the multiple or capitalisation rate is very much the domain of the valuers and agentsRead More →

Contributed By: Mike Phipps Finance on

Thank god for the Australian press and in this case The Australian newspaper specifically. Here I am sitting at my desk after a nice Saturday morning bike ride with a chronic case of writer’s block. I have some vague idea that I want to talk about how badly the general public and even our industry professionals misunderstand banks, but I can’t seem to find the right introduction. And then, like a sign from heaven there it is…………a banking industry article with the following comment “Interest only loans also allow a borrower to access larger loans, which has helped drive property prices higher”. In what universeRead More →

TheOnsiteManager.com.au frequently gets introduced to many products, including landlord insurance, catering to the real estate industry. With our managers in mind, we assess the overall benefit of each product. Recently, Australian Landlord Insurance (ALI) presented an offer to us to take to our managers. We are pleased, on behalf of ALI, to offer to you landlord insurance for just $320. This represents a reduction, in most cases, over landlord’s current policies but also provides your clients with additional cover in many areas. Also note that the normal cost of a ALI landlord insurance policy in Queensland is $325. ALI’s product is extremely competitive in theRead More →

We used to think that getting to settlement was a normal process over about 90 days with maybe a bit of renegotiation on verification but due diligence and finance were fairly straight forward if we had qualified our buyer and committee approval was a given. What happened? Now we see more contracts fall over than ever before and extensions requested with almost every deal and finance can take 42 days or more. Buyers are providing more information than ever before and sometimes Sellers not enough. I think we all need to understand that the criteria has changed in the past couple of years. Sellers needRead More →