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Monitoring Your Net Worth - how do/would YOU account for the loss of property purchase costs??


Joe Brown

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Hi everyone,

Just setup my spreadsheet for the new tax year to monitor my income, expenses, savings, net worth etc. I'm sad I know :lol: But since this year I'll be buying my first BTL (it's currently going through) I've came across a decision I've not had to make before... how to deal with the 6/7k in costs of buying each investment property on my net worth spreadsheet...

 

For example, I'm buying a property with a £33k deposit but it's going to cost me a further 7k in SD/Costs, so £40k in total. My cash will therefore go down by 40k, but strictly speaking the equity in the investment property is only really £33k. So would you do it like this, so in essence everytime you buy a property the net worth takes a hit (7k is quite big) but this is covered up front and overtime hopefully you'll be making back in capital growth, or would you class "property investment" as the total funds invested in property?

 

Really geeky I know, but that's what this forum is for right?! :rolleyes: Just intrigued how others do/would deal with it :lol:

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Loving your level of geekiness Joe. Personally I would add the value of the asset to your balance sheet. You’ll be showing a temporary decrease but this will catch up in time thru rental income and capital appreciation. 
 

Good luck with your investment!

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  • 9 months later...

Hi guys, I have a couple of questions on this topic, what is a comfortable net worth in your opinion? And how can I increase my net worth? To update my post, I want to add that while searching, I found the nuordertech blog where I read some articles about people who earned the net worth thanks to YouTube channels. In my opinion, this is a real success, but I don't understand how they did it, because when I watched the videos, I didn't see anything outstanding. These are ordinary people who live an ordinary life and show their personal lives to the whole world through videos. In fact, this is interesting for me and I want to try myself for this role, will you follow my channel?

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