house sale scenario?
I'm planning to put my house on the market next year, to downsize. We'll sell the current house without having bought another, to remain more flexible in terms of market opportunities.
My initial plan was to simply rent something for a short time until we find, buy and prepare the next house for occupancy. But I just thought that it might be a good idea to buy a 2BR condo with the proceeds, with the intent of it becoming income property.
In that case I'd sell my primary house, buy a replacement condo, then buy a third house that becomes primary while the condo becomes investment property. Both the condo and new primary house would have a mortgage but, since I'm downsizing, the total principal of the two loans probably will be less than what I currently owe.
Can anyone suggest how to model that in ESP?
Thanks
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Comments
BrianVezza
Wed, 07/15/2015 - 22:52
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Hi Chris,
Hi Chris,
I'd put the condo under Real Estate. This can get detailed under the sub-tabs.
Then selling your current home under Primary Home for 2016 and have the first change of home (in that tab) for your 3rd (future primary) house.
Since you are only thinking about renting for a short time, you could just enter this as a special expense.
Once you start making transactions, modeling should get easier as you will have fewer items to include.
Best,
Brian
ChrisCowles
Thu, 07/16/2015 - 21:28
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Putting the condo under real
Putting the condo under real estate permits recording the future income and expenses. But it may be a year between selling the first house and buying the third. I can see maybe selling the first house and buying a second one for $0 with $0 expense for 1 year, then buying the third house at the expected cost, etc., in 2016.
Unfortunately, ESP's limitation of 3 primary houses means I can't schedule the sale of that 3rd house, as I anticipate, 10 years later. That would be another downsize to a smaller condo (not the investment condo) from which the net cash will be available to my economy.
The limit in number of houses seems rather arbitrary. If you're looking for younger families as customers, allowing for more would be useful.
BrianVezza
Fri, 07/17/2015 - 10:11
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As a short-term work around,
As a short-term work around, you could use special expenditures/receipts to cover housing until you sell your primary home next year.
Then you could start off with renting as your "first" primary home or continue to use special expenditures (for renting as well) until you buy your third.
Once you start the actual transactions, you will have fewer items to model so the profile should continue to get simpler over time.
Best,
Brian
dan royer
Thu, 07/16/2015 - 09:32
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I often don't think of the
I often don't think of the Real Estate because I use that area so little, but Brian's strategy seems right to me too. I was first thinking that you'd use the Vacation home to represent the Condo, but that won't allow you to track income and expenses as you'll eventually need to do.