Tracking property and shared expenses.

[Jorge Martínez López]

Hi folks,

Just wanted to run this through the group to make sure I'm doing
things the right way.

I have been using Beancount for a couple of years. I started with a
single ledger but then moved to two: one to track my own income and
expenses, the other for shared expenses with my partner (bills and
groceries).

For the shared expenses every month I transfer some money from my
personal bank account to our joint account. In my personal ledger that
goes to "Expenses:Shared:Partner", and in the shared ledger that comes
from "Income:Jorge" (and Income:Partner for her transfers).

That has worked very well but now there is a slight complication as we
are going to buy a flat and while we will still pay the bills 50% /
50%, I'll be paying a slightly higher share of the flat.

The first hurdle is that now the "Income:Jorge" and "Income:Partner"
accounts in the shared ledger are not balanced 50% / 50%. I was
thinking about using separate "Income" accounts for contributions to
the flat or perhaps using tags to exclude tagged transactions in the
fava dashboards but I can't find the way to do it. Moreover, I guess
that I'd also need subaccounts on the "Expenses" and "Liabilities"
accounts (for interests and mortgage)?

The other thing that doesn't look entirely right is that as soon as we
transfer the money for the deposit into the joint account the scaling
of the Fava charts went much higher so our normal income and expenses
are now almost invisible. Which makes me think... Perhaps I'm doing
this wrong and should track the flat on a separate third ledger?

I'm hoping this is a rather common scenario and most folks have
cracked this. I'd appreciate your thoughts on this.

Kind regards,
Jorge

[Patrick Ruckstuhl]

Hi Jorge,


The way I would model this is, to model the flat itself as an asset and
the contributions to the flat as loans. Something like this


Jorge

Assets:Receivable:LoanFlat


Partner

Assets:Receivable:LoanFlat


Common

Assets:Flat

Liabilities:LoanJorge

Liabilities:LoanPartner


Because in the end this is not an expense, but a change of "assets". You
"converted" cash into a flat.

That should solve both your problems.

One time fees for the purchase would be modeled as expenses but the main
part of the money should be converted into the asset with the value of
the flat.



Regards,

Patrick

[Jorge Martínez López]

Hello,

Thanks Patrick!

Your model makes sense. From the individual ledger point of view, do
you also include the interest paid in the transfer to
Assets:Receivable:LoanFlat? Or would you transfer it to
Expenses:Shared or Expenses:Interest?

In the common ledger I still have the issue that the one-off large
contribution to the deposit (from Income:Jorge and Income:Partner to
Assets:Home:Deposit) is significantly larger than our normal monthly
incomes and expenses, so the charts in the income statement are now a
bit unreadable. Is there any way around this? What about the monthly
contribution, would you create separate income accounts for regular
expenses (at 50%) and flat contributions?

Thanks again for your help!

Kind regards,
Jorge

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[Patrick Ruckstuhl]

Hi,

It's always about splitting income/expense from asset flows


So to give a more complete example for buying a flat.

My assumptions

- deposit is 5000, you pay 3000, your partner 2000

- you pay an additional 10000 for the flat out of assets, you 8000,
partner 2000

- you take on a common loan from a bank for 20000


Jorge

Assets:Receivable:LoanFlat

    +3000 Deposit

    +8000 Purchase

Expenses:Common

    + 1000


Partner

Assets:Receivable:LoanFlat

    +2000 Deposit

    +2000 Purchase

Expenses:Common

    +1000


Common

Assets:Flat

    +3000 from Liabilities:LoanJorge (Deposit)

    +2000 from Liabilities:LoanPartner (Deposit)

    +8000 from Liabilities:LoanJorge (Purchase)

    +2000 from Liabilities:LoanPartner (Purchase)

    +20000 from Liabilities:LoanBank

Liabilities:LoanBank

    -20000

Liabilities:LoanJorge

    -3000

    -8000

Liabilities:LoanPartner

    -2000

    -2000

Income:Jorge

    +1000

Income:Partner

    +1000

Expenses:Fees

    -2000

[Jorge Martínez López]

Hi Patrick,

This is indeed quite useful and does exactly what I need, thanks a lot.

For the sake of completeness, I assume that monthly contributions
towards the mortgage would look like this on the shared ledger:

Liabilities:LoanJorge -800
Liabilities:LoanPartner -200
Liabilities:LoanBank 700
Expenses:Interest 300

Kind regards,
Jorge

On Sat, 27 Nov 2021 at 19:21, 'Patrick Ruckstuhl' via Beancount

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[Patrick Ruckstuhl]

Hi Jorge,


If the monthly contributions are interest (so not reducing the principal
of the loan), they are expenses, so I would model it like this

Income:Jorge -200
Income:Partner -100
Expenses:Interest 300


If they are paying back some of the principal, I would model it like
this (basically you are shifting the loan from the bank to you and your
partner)

Liabilities:LoanJorge -600
Liabilities:LoanPartner -100
Liabilities:LoanBank 700


If it's a combination you will have both.

Regards,
Patrick

[Jorge Martínez López]

Hello Patrick,

Thanks again!

Is there any reason why the payment for the interest expenses cannot
be done against the Liabilities (loan Jorge and Partner) instead of
the Income accounts? That way the liability accounts would track the
whole amount going into the flat (Asset + Mortgage Interest) while the
Income accounts would track the 50%/50% contributions to the regular
ongoing expenses.
If the reason to use Income is to balance Assets and Liabilities, and
Income and Expenses... would it be correct to have a separate account
for Income to track each of our contributions towards paying the
interest?

Income:Jorge:Shared (<-- 50% ongoing expenses)
Income:Jorge:Mortgage (<-- 70% of the interest expenses)
Income:Partner:Shared (<-- 50% ongoing expenses)
Income:Partner:Mortgage (<-- 30% if the interest expenses)

(I'm hoping our lender breaks down how much goes into the interest and
how much into the principal on a monthly basis, otherwise it's going
to be interesting).

Kind regards,
Jorge

On Sun, 28 Nov 2021 at 09:48, 'Patrick Ruckstuhl' via Beancount

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[Patrick Ruckstuhl]

Hi Jorge,

Yes having different income accounts makes sense if you are interested in knowing the details. Interest needs to go vs income/expenses as it's an outflow, you can't get it back when you sell the flat, so it shouldn't increase your loan.

Regards,
Patrick

[Jorge Martínez López]

Hello Patrick,

Thanks again for your help, this has been quite insightful.

Kind regards,
Jorge

On Sun, 28 Nov 2021 at 11:31, 'Patrick Ruckstuhl' via Beancount

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[Tino de Bruijn]

Hi all,

I have a similar question. However my setup is slightly different in that we don't have a preset division of the loan. We divide the contribution to both based on how our income compares, so this can change over the years. As such, and on advice of the notary, we want to keep track of how much each of us contributed to the loan repayment, as that it relevant for what part of the house we own if we are ever to break up. 

Similarly, there might be times when someone misses a payment, or pays too much. So I would like to see one account for each which designates our standing towards the shared account.

So what I would ideally be able to see is this:

• Equity:House:Me/Partner => Accumulated repayment amount for each fo us
• Liabilities(??):Me/Partner => Current standing, should usually be (around) 0
  
• Expenses:Interest => Should show how much interest we paid (not that important, but nice to see).
  

What also plays a part is that the loan is made up of 3 parts, so each month there are 3 transactions. Helpfully the description contains the repayment and interest amounts, so I have written an importer that can add the right postings. But I'm still a bit clueless as to where to post this so that I can achieve the above.

If I post to some intermediate Liabilities:Hypotheek:Part-1 and Expenses:Interest, how would I also make this show up on our personal balance accounts?

Regards,

Tino