New valuation for Real Estate, how to account in NW?

I’m in the process of getting a new mortgage for end of January next year and all the banks so far estimate my current apartment at around 1.1M CHF (up from 850k CHF).

How do I account for this appreciation in assets? Some one-time re-evaluation gain or some retroactive distributed gain over the last 3 years? Are those considered unrealized profits?

(bonus points if somehow knows how to build that transaction in beancount)

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Do you really want to include it? Real estate can be as volatile as stocks, it’s really a hassle tracking it accurately.

I would certainly only update the valuation when I get “official” numbers from banks. So every 5 years or so. But I mean I certainly also include stock valuations in the NW.

How about doing an online valuation once per end of year? For example with them:

Technically possible too. I also have an account with which gave me an estimate between 1.1M and 1.4M, I mean I wouldn’t want to sell the apartment anyway so maybe I should even exclude it from the NW? I mean it could potentially get me some 2.8k/month which would be enough to retire asap in some remote country… but that’s also not yet the goal (small child at home). I just think it would make my asset allocation look better if the apartment was accounted for correctly but then your argument of reevaluating it regularly would be more important too.

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If you revaluate it only every couple of years, you make tracking stocks more regulary kind of obsolete IMO. So either do it at least yearly or don’t include it at all.

Not owning RE I’ve never tried, but I would follow the same logic as with any other appreciating/depreciating material asset above a few K’s

When owning a vehicle you e.g. may want to typically evaluate the depreciation as unrealized loss (you’ll realize it once selling). With a property the same can be done.

For simplicity (and also because it doesn’t really matter unless you’re leveraging the appreciation) your idea of doing it only with official numbers from a bank (i.e. potential buyer’s representative) is correct.

The frequency of recording changes in asset value in my opinion should follow the asset liquidity, with stocks being the most liquid and RE the least (well, unless you own art or old-timers, etc. :slight_smile:).

Take care only of timing the valuation with your FIRE magic number, and whether you intend to sell (=adds cash towards your FI target), rent (=expected cash flow minus taxes, maintenance, etc.) or live in it (=lowers your SWR needs) since property swings can be a biiig chunk.

I am very keen on trying beancount, but didn’t have time yet!

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I don’t, unless we would consider selling.
In this case I would deduct the Grundstückgewinnsteuer (taxe sur la plus value immobilière) in my NW, and then, there are 2 options:

  • either we buy a new property within 2 years and we get this Steuer back (4-6 months later), keeping in mind that sooner or later, this amount is due
  • if we do not buy within 2 years, this amount is immediately due to the tax office.

You might also consider some tax deductions if you sell under certain conditions, so this shall be considered as well in the NW.

Unlike stocks (once per year), I not not update real estate in our NW as long as we do not sell, however I keep an eye on a separate sheet on the potential selling value and approximate Grundstückgewinnsteuer amount.


Thanks for the valuable inputs. I guess I have to check if the NW is modelled correctly if I enter it in the Unrealized profits area.

How about the approach of considering only your equity in the apartment? for e.g. if you put in 200 KCHF as your own cash, you can account for that only, w/o considering any appreciation.

That’s how I have it today. But since I’m now sure my own portion is today valued at 420k I would like to reflect that in the NW.

Same here. What I intend to do is to evaluate the apartment every year thru the bank where I have the mortgage (they are ok with this ) and then reflect (proportionately) the increment/decrement in my own equity.

For 2020, the % increase in the value was recently calculated as approx. 5.5 % (although I find that unlikely and am still accounting the original equity at the time of purchase).

I look at the stats of the price development, consider what I spent in renovations, and come up with a very conservative adjustment of the equity value in the house where I live, once every couple of years.

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