Property Goals

Adding Property Goals

If the client is looking to change their primary residence in the future, or has a goal of purchasing an additional property in the future, you can use one of the Property Goals on the Goals screen.  Property Goals include Primary Home Relocation, Investment Property Purchase, and Vacation Home Purchase.

For a brief overview of entering property goals in a financial plan watch this short video.

Primary Home Relocation

The Primary Home Relocation goal allows you to change the client's primary residence in the future.  You can have the client move into a new or existing property. For new properties you can enter the state of residence (which will generate updated state taxes), year of relocation, and details around the home and financing.  You can enter multiple Relocation goals to change the primary residence at different times.

You can also specify what should happen to the existing primary home at the time of sale.

Fields include:

When: This determines the timing of relocation. You can specify a specific year, age, or tie the relocation to retirement or end of plan.

New home: This determines the type of relocation. It can be set to "Buy a new home", "Rent a home", or "Move into existing home".

Current home: This field determines what happens to the existing primary home. The options are "Sell immediately", "Convert to vacation home", and "Convert to rental home"

The default option is 'Sell immediately', which will sell the exiting property. Any mortgage and home equity associated with the property will be marked as paid and the net proceeds will be added to the cash flow.

You can also select to convert the primary home to a vacation home or an investment/rental property. If you convert to a rental home, you will be asked to enter information about rental income, expenses, and depreciation.

If the New home type is "Buy a new home"

Purchase price: This is the full expected purchase price of the property at the time of purchase.  This value will not be inflated between now and the purchase year.

Annual appreciation: This will increase the property value, insurance, and taxes each year once the property is purchased by the amount indicated.

Down payment: The percentage of the purchase price that will be paid as a down payment on the property.  If the property is being purchased outright with no mortgage, set this to 100%.

Term / Interest rate: The expected parameters of the mortgage on the property.

If the New home type is "Move into existing home"

You will see a drop-down box that includes the name of all existing properties; select the property that the client will be moving into. Existing information from the property such as mortgage, property tax and insurance will be continued.

Primary Home Relocation can be used to reflect many different scenarios, including:

  • Client who is renting but looking to purchase a home in the future
  • Client who is looking to move to a bigger home in a few years
  • Client who is looking to downsize / relocation at retirement
  • Client who plans to move into their vacation home
  • Client who is looking to convert their current home into a rental property

Investment Property Purchase

An Investment Property Purchase can be used to purchase a property that will be used to generate income in the future.

In addition to the fields discussed above under the Primary Home Relocation goal, under the Investment Property you can enter the following information:

Monthly rent: Monthly rental income generated by the property

Rent increase: The year-over-year percentage that the rental income is expected to increase

Vacancy rate: The percentage of the year that the property is expected to be vacant, i.e. not generating any rental income.  The annual rental income for the client will be calculated as (Monthly rent 12) (1 - Vacancy rate).

Monthly maintenance: Total deductible maintenance costs for the property.

Year of sale: The year that the property is to be sold.  If the property is not expected to be sold during the client(s) life(s), set the Year of sale to "End of both plans".

Vacation Home Purchase

A Vacation Home Purchase goal can be used to purchase a vacation home, 2nd home, or any other property that is not expected to generate income for the owner.

For more information about any of the fields on the Vacation Home Purchase goal, see discussions above under Primary Home Relocation and Investment Property Purchase.

Property Goals converted from future properties

Property Goals were introduced to RightCapital on October 23, 2019.  Prior to that date you could enter an Investment Property or Vacation Home with a future 'Purchase Year' on the Profile / Net Worth screen in order to reflect a property goal.  As of October 23, 2019, all future properties have been converted to property goals, and you will see the property, along with any associated mortgage, reflected in a Investment Property Purchase or Vacation Home Purchase card on the Profile / Goals screen.

Illustrating changes to property Goals

You can illustrate changes to the purchase year of any Investment Property Purchase or Vacation Home Purchase goal under the Action Items section on the Retirement / Analysis screen.  The goals will automatically display under the "Properties and Businesses" section, under "New property purchases":

You can change the year of purchase to any specific year or to either client's retirement year.  If you want to show a plan where the property purchase is not included, set the purchase year to a year after the end of the plan (e.g. 2199).