House as an investment?

Discussion in 'Microsoft Money UK' started by RichT, Apr 9, 2010.

  1. RichT

    RichT Guest

    Has anybody tried entering assets like property into the investment
    portfolio?

    It would be useful to me if there was a way to get some performance figures
    for my property investments.
     
    RichT, Apr 9, 2010
    #1
    1. Advertisements

  2. RichT

    teabag Guest

    Are you talking about buy-to-let?

    If not, and you have a 'bog standard' house in some suburban area it may
    well be possible to record asking prices for identical properties as often
    as you like. However, if your house is unique you would need periodic
    valuations from which to deduce its performance. If you simply guess what
    the property is worth then your 'performance' will be the same as your
    earlier 'guestimate'.

    teabag
     
    teabag, Apr 9, 2010
    #2
    1. Advertisements

  3. RichT

    RichT Guest

    My question was more orientated on how to set property up as an investment,
    rather than the valuation method.

    Ideally I would like to have a means to track the performance by inputing
    annual valuations and taking into account spending on capital improvements.
    Amongst the choices of investment class offered by M2005 investment setup
    wizard, what might be the best to use?
     
    RichT, Apr 10, 2010
    #3
  4. RichT

    Ian Guest

    If I remember correctly all I did for my house in Money was go to the
    "accounts" page, select "add a new account", select the "other" radio
    button, select "house".

    There are two columns in the house asset account, one for asset value
    increases and one for decreases. Each year on 31/12 I add a transaction to
    the account using the income category "asset value increase". Unfortunately
    some years it is a decrease. I base the value increase or decrease on data
    from Zoopla and the tables in Moneywise.

    Is that what you wanted to know?

    Ian
     
    Ian, Apr 10, 2010
    #4
  5. RichT

    RichT Guest

    That is how I currently do it, but it has the disadvantage of not showing
    any performance data (compared to other investments) and also the price
    adjustment requires a category - which makes the home page and reports
    messy. I know it is possible to exclude categories from reports - but
    nevertheless that too leads to complications.

    Ideally I would like some way to follow property value in the investment
    portfolio, taking into account capital expenditure, and yielding performance
    figures. Appreciation and depreciation would then not require a category.
     
    RichT, Apr 10, 2010
    #5
  6. RichT

    Ian Guest

    The way we have done it using an asset account is as intended by the
    designer of Money but if you want to regard your home as an investment what
    is stopping you adding it as an investment and recording the purchase a
    "buy" and then manually giving it a value each year using "update prices
    manually"?

    Ian
     
    Ian, Apr 10, 2010
    #6
  7. RichT

    RichT Guest

    I think I may have worked out a way of doing this:

    1. Treat the house as a single share in a fund type investment, so on buying
    the house I enter one share at price X, where X is the purchase price.
    2. Any capital spent on improving the property I log as "other expense"
    3.Any rental income I log as "other income".
    4. Enter periodic valuations as if I was updating manually a fund price.

    I am playing around with this scenario with fictitious data as it will take
    a while to enter my real historical data, but so far this solution seems
    realistic, and avoids having to have categories for asset appreciation which
    are awkward to handle in reports.
     
    RichT, Apr 10, 2010
    #7
  8. RichT

    RichT Guest

    Just as an update - I entered my historical property data using this
    technique, and the results were quite interesting - I found that my property
    investments hadn't actually performed as well as I had imagined, once their
    costs were properly taken into account. Indeed, my market investments
    largely outperformed property.

    Definitely a worthwhile exercise.
     
    RichT, Apr 12, 2010
    #8
    1. Advertisements

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments (here). After that, you can post your question and our members will help you out.