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pre-existing loans

Tips and advice on how to use Landlord Vision.
jimjackson
Posts:2
Joined:Sun Apr 30, 2017 12:29 am
pre-existing loans

Postby jimjackson » Sat May 13, 2017 1:33 am

Hi. I'm just getting to grips with LV and wondering how I enter pre-existing loans/mortgages.

I have a couple of rental properties which I have owned for a few years - one is on a mortgage and the other I purchased via a collection of loans. I am not sure how I make the first entries to deal with any legacy issues.

I wish to start my use of LV from Apr 6th this year. I have entered the accounts that I have, all the payments/expenses for April, a couple of properties, some tenancies and plan to update everything once a month. However, I am struggling with what to do about the loans. One mortgage I have had for 10 years and so wouldn't be able to start it from the beginning. Do I add the loans from the lending date around 18 months ago and enter every payment since or do I work out the figures owed on April 6th this year and start from there.

I suspect LV will show that I have the loan & mortgage figures in my bank account if I start it from Apr 6th (or whenever), if I then add a payment for property purchase to remove the amount from my bank account then the Fixed Assets figure is/will be wrong - does this matter?

Any suggestions on how to go about this would be gratefully received, many thanks. I am currently using the standard subscription.

Jimmy

roy
Posts:80
Joined:Tue Aug 23, 2016 11:38 am
Location:United Kingdom

Re: pre-existing loans

Postby roy » Mon May 15, 2017 12:20 pm

Hello Jimmy

Thank you for your message

The best way to enter these is to set the Start Date as the 1st March and use the statement balance for that date for the loan amount. Then work out the remaining months from that date and enter that too.

You are correct in that LV will show the mortgage and loan drawdown figures in the bank account and you are right that you can record the property purchase to balance it out. You can enter the deposit / equity amount as well to get the actual value of the property if you want your Fixed Asset account to be correct. For reference, please take the following example

Purchase price £140,000
Property Deposit: £40,000
Mortgage: £100,000
Mortgage paid directly to the seller.

1) Create an expense for the property purchase of £140,000 in Property Manager > Expenses. The next two items will cover paying this off
2) Record the deposit payment for £40,000 against the property expense (property purchase) leaving £100,000 still to pay off.
3) Still in Property Manager > Expenses, create a credit note for the remaining £100,000 and choose the Mispostings account. Allocate the credit note to the property purchase.
4) Create a mortgage for £100,000 if you haven't done so already.
5) Enter the following journal transaction in Account Manager > Journal:

Line 1 Debit Mispostings £100,000
Line 2: Credit Bank Account £100,000

Now you will have three payments in your bank account which all cancel each other out, leaving the balance as it was before. To reconcile them go to Account Manager > Bank Accounts > select the account > Account Transactions tab > place your mouse over the transactions that don't really exist and look for the cog icon and select Ad Hoc Reconciliation

Kind regards
Roy

jimjackson
Posts:2
Joined:Sun Apr 30, 2017 12:29 am

Re: pre-existing loans

Postby jimjackson » Tue May 16, 2017 11:21 am

Thanks Roy, brilliant, thats a great help. 8-)


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