Long Term Rental Income Input Problem
I'm trying to set up my basic profile in Plus, and keep running into a snag with Special Receipts. I have a very long term rental income stream which increases 7.5% every three years. I can't figure out how to get the program to accept the information.
I have even tried having the program "grow" the stream 2.5% per year, to try to get in the ballpark, but don't have any luck. The amount of income, specified as "today's dollars" never increases in the grid.
What's the solution?
RSS
Mark,
Enter this year's rental income. Specify continue for X years (where X is the number of years you'll be renting this property). Then specify a 2.5 or whatever growth rate, and then click grow. This will grow the amounts in today's dollars.
I just tried this and it worked. Call me at 617 834-2148 if this isn't clear.
best, Larry
Well, your answer is clear, but I can't get the program to do it.
Using an assumed $30,000 current income, which persists for 42 years, i get a fixed $30,000 in today's dollars. If I then assign a 2.5% annual growth rate to the first year and have it persist for 42 years, I either get no result when I click "grow" or I get additional entries for each year....I mean, I get a new entry for each year, and the original entry is also shown (i.e. two "2008" entries, etc).
If I enter 42 years for "grow" and click, the original income stream period defaults to "1".
In addition to these no-doubt operator error glitches, I really don't want the income to grow annually, as the compounding factor will throw the calculation way out of whack. The income stream increases every three years by 7.5%
Mark:
I see what you are doing wrong--or what is happening here. I could replicate what was happening to you. What you need to do is enter the 30k in the first year by itself. Then, after you enter that number, you'll not use the top half again. That is, don't enter anything in numbers 1-5again. Do everything else with the GROW button at the bottom.
After you have that first number entered in the first year, select that year with your mouse by clicking on the little grey box to the left of the year so that the black triangle appears and highlights that first year. Then choose the number of years you want it to grow, which is 2, and the percent amount, which is 0. Hit GROW. Note well that after each time you punch the "grow" button, the selector jumps back to the first year (i.e., the first row in your table). If you don't notice this and go to the next step without choosing the last year (i.e. last row) on the list, it will mess things up. So now, you'll now have three years with the same amount in today's dollars. Then choose the LAST year (which is the third row in this step) and change the "number of years" in #6 at the bottom of the panel and change it to 1 year, and change the growth to7.5% and punch "grow." That will grow the last year in your table by 7.5% and add just one new row. Note how the selector jumps back to the first year after you do this. Don't forget to reselect the last year in your list (the one you just added)--which is now the fourth year (you only added one year at 7.5% to the three years you had). Next grow that last year at 0% for 2 years. Then, select the last year in the list, grow it by 7.5% for one year; then select it, the last year in the list, and grow it for 2 years at 0%; then select the last year again, grow it by 7.5% for just 1 year; etc. It sounds convoluted but it will make perfect sense once you see it working. The only thing you have to watch is that the selector will jump back to the first year at the top or first row each time you punch grow button. You have to remember to select the last year and only use the item #6 at the bottom of the panel to grow alternately by 1 then 2 years, using 7.5% and 0% respectively.
I hope that makes sense. It took me about 3 minutes to fill out the whole sheet this way, and it gets it exactly like you want it. I don't imagine it would make much difference to do it the way LK showed you, which works too and is quicker but it is not holding the value you want for three years but is instead just an average. You just were not noticing that which row that is selected is the one that is acted upon when you hit grow, and the selector jumps back to the first row after you hit "grow." I'm sure you'll get it.
I hope nobody minds me jumping in on this.
Best,
Dan
Yes, you're exactly right, Dan...I finally decided to just enter it in the manner you described, and got what I needed.