Real Estate Value on Net Worth Statement

[RunningBum]

If you're doing it for estate tax purposes, do they figure in closing costs at that point? It makes sense to do it the same way they do, whatever that is. I don't figure to be hitting the estate tax limit so I'm not looking.

[RobLJ]

That's the reason. I'm not planning to move now, but in 20-30 years? Down-sizing certainly is a possibility over that timespan. Or a reverse mortgage, if necessary.

Quote:

Originally Posted by ElizabethT Unless one is planning to move to a less expensive home/location, and pocket the difference in the process, I'm not sure I understand the rational for including real estate in net worth calculations? It would seem to be a moot point for purposes of establishing a withdrawal amount, unless perhaps a reverse mortgage is part of the equation at some point? Edit: I have seen mention of autos in net worth on occasion, which creates the same question, minus the reverse mortgage option. What is the point exactly, since one has to live somewhere and drive something?

[Sunset]

For my real estate, if I get a good comparison number for example a similar model house a couple of streets over sells, then I use that as my mental anchor value.

Then I subtract 10% for commission and fixing up costs to equal the true value (there are no mortgages involved).

[pjigar]

What about rental properties? I do include them in my net worth calculation at Zillow price.

[calmloki]

Quote:

Originally Posted by pjigar What about rental properties? I do include them in my net worth calculation at Zillow price.

Zillow is too wonky with valuations - I decided to use what the property tax man calls "true cash value" - not taxable value. For me that gives a single consistent source for my valuation, not basing valuation on what I think something is worth. Also, since taxes are assessed once/year our net worth doesn't bounce around. As long as rental values are going up our net worth, if anything, is liable to be understated - which suits me just fine.