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2024 expenses

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 NC
(@nc-cpl)
Reputable Member
Joined: 4 years ago
Posts: 277
Topic starter  

Is there any reason to add in 2024 expenses under Build>Expenses>Personal Property>Improvements once we start 2025-forward planning? Bought a new home last June so we had a some in 2024 but seems pointless to add these in now. Want to confirm.


   
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(@ricke)
Estimable Member Customer
Joined: 4 years ago
Posts: 174
 

You are planning for the future, so only include estimates of what you think is relevant going forward. If there are annual expenses that you haven't experienced yet in the new place, then maybe you have to use last year's number as a stand-in. For large, lumpy expenses it's a good idea to use an average of several years so you have some kind of allowance for the inevitable replacement cost of a car, air conditioner, roof, carpet, paint, landscaping, appliances, etc.


   
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 NC
(@nc-cpl)
Reputable Member
Joined: 4 years ago
Posts: 277
Topic starter  

So any improvements made to the property in 2024 do not need to be listed under BUILD>EXPENSES>PERSONAL PROPERTY>IMPROVEMENTS, correct?


   
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(@cstone)
Site Admin Admin
Joined: 3 years ago
Posts: 49
 

Correct. As Rick noted, improvements made prior to your plan start year do not need to be listed. The cost of these improvements should be included in the "Cost Basis For Assets You Currently Own" field. I believe any cost entered for pre-existing (prior the plan start year) improvements are ignored and not included in the property cash flow or (for rental properties, depreciation).

This means as we roll into each new year, users need to review their property info and update the cost basis, current market value operating costs and update as appropriate. Also, somewhat more complicated, a "New" loan originated in 2024 will become an "Existing" loan when the plan start year changes to 2025.

Property loans were originally split between 'new' and 'existing' because the data entry fields vary somewhat depending on whether the loan's origination is in the past or future. Sometime in 2025, I will revisit this design and see if I can simplify it.

I just checked and see that the cost of future improvements is included in the Cash Flow by Property: Total Annual Expense. The Metric MRI includes the imrpovement cost in "Operating costs". I will create a Usability Improvement to either show this as a separate column or at least itemize it in the Metric MRI.

This post was modified 2 months ago by Charlie Stone

   
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