FAQ - Knowledge Base

This FAQ Knowledge Base is provided to help Feastudy users solve problems arising from their use of the program.


Often the main reason that Borrowing Interest is low for a Development file in Feastudy Professional, when program users expect Borrowing Interest to be much greater, is that they project their Sell-On Income occurring too soon relative to the timing of their development costs, like Land Costs and Construction Costs. They also may have Equity injected into the cashflow and may not have taken account of the mitigating effect that Equity has on Borrowing Interest. Thus it is important to check the timing of all Costs, Incomes, Equity and Debt and enter the correct dates for these data items to have the program calculate the correct monthly and total amounts of Borrowing Interest for your Development scenarios.

Borrowing Interest is an interest cost (which is usually paid to a financial institution) and is calculated for those months in which the cashflow has a cumulative debt. The opposite is Lending Interest, which is for interest income when the cashflow is in surplus (i.e. for those months where total equity plus total incomes to date is greater than all costs, including borrowing interest costs, to date). 

With regard to Australian real estate developments, it is usually (if not always) the case that deposits and settlements from sales of components of the developed property cannot be realised by the developer until after those components have new certificates of title, which can only be issued after a relevant certificate of practical completion for the said components is given by a relevant professional. For example, we do not know of a specific Australian case where the deposits for development sales have not been paid into a conveyancer's trust account and therefore these deposits are not available to be offset against debt finance and/or reduce interest costs payable to a development financier until settlement of the relevant sales. Thus it is our policy at Devfeas Pty Ltd to suggest to Feastudy users, who study proposals for one-stage-only developments of Australian property and ask us why their Borrowing Interest is low when they have their Sell-On Income occurring before the last End Date for their Construction Cost item(s) in their studies, that they consider making each entered start date of their Sell-On Income items for all newly developed component(s) at least one month later than the said last End Date.

If you want to undertake a study of a proposal involving the development and then the holding of all or part of that development as an investment, you can use a Develop-and-Hold (D&H) Investment feasibility study file in Feastudy Professional to do this, however for this to happen you must firstly create and then save a relevant source Development file in the program. (A source Development file must not have “Subdivision” entered for its Type of Development in the Development Identification window and must have at least three months of Construction Cost cashflows to be a valid file for the purposes of the D&H Investment study.)

We recommend that you enter data into the source Development file as if all of the components of the development are sold as soon as practicable for fair and reasonable prices and that the settlements of the sales of these components occur after the construction of the development is completed. Among other things, this will help to provide information on the feasibility (or otherwise) of the development on completion for yourself, your partners and for any potential external financiers. In any case, the program will ignore the Sell-On IncomeSelling Fees and Vendor’s Conveyancing Fees data that are entered in the source Development file for the purposes of the D&H Investment study because the program assumes that these data inputs are not relevant to the development or that part of the development that is held as an investment.

Once you have created a relevant source Development file, click the New option from the File menu of the program and then click the Develop-and-Hold Feasibility Study button (or, alternatively, click the D&H button in the program’s button bar) to start a new financial feasibility study for a D&H investment proposal and select the relevant source Development file for the proposal.

When a D&H Investment file is linked to its source Development file, the program imports data from the source file into the D&H Investment file for, among other things, the calculation of the Investment Development Cost and cashflows for the Develop Period of the study. For the Hold Period, which is usually the main rent-producing period after the Develop Period, you enter your data in the D&H Investment file’s data entry windows.

In Feastudy, Lending Interest is for interest income when the cashflow is in surplus (i.e. for those months where total equity to date plus total incomes to date, is greater than all costs, including borrowing interest costs to date). The opposite is Borrowing Interest which is an interest cost (and is usually paid to a financial institution) is for when the cashflow has a cumulative debt.

In a Development file in Feastudy, new net costs for the month (before interest) that are not funded by Income and/or GST input tax credits are funded, in accord with certain rules, by available Equity, Secondary Debt Funds and Primary Debt Funds for that month – in that order. If a new net cost for the month (before interest) is not fully funded by Income, input tax credits, Equity nor Secondary Debt Funds nor a combination of these four types of funds, then Primary Debt Funds are used to fund that cost or the remaining part of that cost, as the case requires.

In Australia, Primary Debt Funds are usually bank (first mortgage) finance and Secondary Debt Funds are usually Mezzanine Finance (second mortgage) finance.

For more detailed information about how debt and interest are calculated, you can read the relevant section of the Overview of Basis of Calculations section of the program’s Help page.

Feastudy (for PC)'s reports and graphs use the currency setting that is entered in Windows’ Control Panel.

In Windows 10, you can change the currency setting by opening the Clock, Language, and Region section of Windows’ Control Panel and editing the relevant Location. While you are there, check that the currency is correctly changed in the Change date, time or number formats section. In Formats, click on Additional Settings and then the Currency Tab to see what the existing Currency symbol is and edit it if necessary