Determining shop’s value over time?

[piaffepony]

Long story short: Planning a pre-nup type of situation. Both of us are home owners with a similar debt to income ratio but I have a larger net worth because of my farm property (my main source of income/self employment).

In order to accommodate him, we would need to build a metal shop (budget $50k). As much as I would LOVE a shop, it’s not in the cards for me financially for a few years so he would have to shoulder the majority of the expense for now and either sell or rent out his house.

Obviously, we want to be fair and still protect our assets in a worse case scenario(s) and put it in writing before we move forward.

The rough plan we’ve come up with so far is:
I pay the mortgage, proportional insurance and property tax costs...split utilities/community type expenses 50/50. I will pay for majority of maintenance/repair expenses (still need to figure out what’s fair there too). Credit cards/checking/retirement all stay separate... possibly agree to contribute monthly to a savings account for more assurances? Survivorship percentage guarantees?

So what we need to figure out is how to calculate how much the shop is worth over time taking into account for things like value added, appreciation.... depreciation(?) minus my property tax and insurance contributions... anything else? My main concern is being able to buy him out if we separate within the next 2-5 years. Ideally, I could refinance and just pay a lump sum but self employment, ag exemptions, businesses on site make that a messy process and not a guarantee. We both agree to plan for a monthly payment scenario in case I can’t refinance... but want to make sure we can both afford it and make it work.

I’m in a more rural area in north central Texas but is quickly developing... I read the national average ROI for a shop/garage is 63-81% and home values have increased an average of 3.4%.

Can anyone shed some light on their experiences? Ideas? Also how did the property tax assessor value the addition of your? What kind of insurance increases are we looking at?

 

[piaffepony]

My thinking is, if your already planning for the worst case scenario (divorce) don't get married.

Honestly, I don’t have any desire to “get married” and I’m satisfied cohabiting as such forever. I’m not dead set against getting married either... I’m just of the mind set that I don’t need a piece of paper to validate my relationship. If there’s a decent financial or logistical benefit to getting married then sure! Either way, I’d make sure we have all our ducks in a row to reduce some of the worry and tension and just enjoy life.

 

[3Ts]

Re: Determining shop痴 value over time?

It is very difficult to answer your question because it depends on the market at the time and the area around you. I suggest you talk to the tax assessor about what you are thinking about doing and he can tell you what the tax impact will be. Some of them can be quite helpful and keep you from making mistakes.

My main concern is being able to buy him out if we separate within the next 2-5 years.

I agree with Shaneard in this case. It sounds like you're not that committed to each other yet. I suggest you continue to date for those years until you're sure they're the one for you. Now, If you are in your early years and just starting out and had more of a commitment to make it work, I don't think you'd need a pre-nup. However, if you're in your upper years and already have kids from prior marriages, then pre-nups are a good idea. As is an updated Will and to be sure everyone knows what's in the will.

 

[Shaneard]

Honestly, I don’t have any desire to “get married” and I’m satisfied cohabiting as such forever. I’m not dead set against getting married either... I’m just of the mind set that I don’t need a piece of paper to validate my relationship. If there’s a decent financial or logistical benefit to getting married then sure! Either way, I’d make sure we have all our ducks in a row to reduce some of the worry and tension and just enjoy life.

I deleted that comment because it sounded very mean, not intended mean.

 

[prof fate]

I'm in a similar situation - girlfriend has 25 acre horse farm and I have a house on 2 acres. We've started to work toward a market garden...hard to decide where to do it, looks to be the farm as that's where more land, horse manure, my tractor is, etc.

Gonna add processing space, cold room, green and hoop houses, watering infrastructure...mostly my money will provide the capital, but it's on her property.

Hard to say what anything is worth - it's worth what someone will pay for it...ultimately. So ask an appraiser wht the value of the farm is now and what it is with the shop on it. Appreciation is a never a given - sure, your area may be growing but the value of the farm may be as developable land - so the shop is somethign that would cost money to remove - a negative value one could say.

Businesses are often valued on the assets they own, or sometimes on the revenue they produce - a 'one man' business is based on the former as the 'business' is the person more so than the entity.

Are you considering the situation if you split up? Get disabled? Die? The latter has issues if there are heirs of his that then own the shop... or you own it and they feel they deserve some of it's value?

As mike tyson said "everyone has a plan until they're punched in the face."

 

[Sigarms]

Apologies to the OP for being blunt and even thinking your a nut case and the guy should run for the hills...

This post is kind of deja vu per the OP, strange...

I got married at 38. Fist time married in my life. We now have 2-14 year old boys...

The key IMO is my own living father, at age 88 loves my wife as much as me.

If I were ever to get divorced, anything and everything I own goes to my wife. I'd live in a shack and pay whatever the judge would say I'd owed if it ever came to a divorce. I knew this going in getting married.

My feeling is if you can't feel the same way about your partner (someone you love and want to spend the rest of your life with), you shouldn't get married to begin with.

I told my dad to take my name off his estate and put my wifes name there. She TRUELY loves him as much as I do.

I'm a bigger dick than my wife by far and she is a much better person than myself, one reason why I finally decided to get married.

This whole topic seems like a repeat. Girl from Texas wanting to get married but not certain. The avatar looks different, but I remember the exact same topic.

Kicker is, per the OP, kind of remember the same dog in the avatar, just on a porch.

EDIT

After looking, I do think the op is nut case and I understand why her boyfriend never married her...

https://www.tractorbynet.com/forums/rural-living/392959-farm-dogs-new-neighbors-ugh.html?highlight=

If I have it correct, HER dog went off HER property and hurt another dog, but in her mind, it was the other dog who was the instigator, so the OP is wondering what she should pay. Coo Koo, thus the reason for the pre nup.

Pre nup = just live together and forget getting married.

 

[ch1ch2]

This post is kind of deja vu per the OP, strange...

I got married at 38. Fist time married in my life. We now have 2-14 year old boys...

The key IMO is my own living father, at age 88 loves my wife as much as me.

If I were ever to get divorced, anything and everything I own goes to my wife. I'd live in a shack and pay whatever the judge would say I'd owed if it ever came to a divorce. I knew this going in getting married.

My feeling is if you can't feel the same way about your partner (someone you love and want to spend the rest of your life with), you shouldn't get married to begin with.

I told my dad to take my name off his estate and put my wifes name there. She TRUELY loves him as much as I do.

I'm a bigger dick than my wife by far and she is a much better person than myself, one reason why I finally decided to get married.

This whole topic seems like a repeat. Girl from Texas wanting to get married but not certain. The avatar looks different, but I remember the exact same topic.

Kicker is, per the OP, kind of remember the same dog in the avatar, just on a porch.

EDIT

After looking, I do think the op is nut case and I understand why her boyfriend never married her...

https://www.tractorbynet.com/forums/rural-living/392959-farm-dogs-new-neighbors-ugh.html?highlight=

If I have it correct, HER dog went off HER property and hurt another dog, but in her mind, it was the other dog who was the instigator, so the OP is wondering what she should pay. Coo Koo, thus the reason for the pre nup.

Pre nup = just live together and forget getting married.

I remember the previous post as well.
Got to wonder WHAT'S UP?

 

[ning]

It's a repeat question, yes - I recall the same - but it's definitely best not to rush things. Neither of us know why they didn't tie the knot yet (she's specifically stated that the institution of marriage isn't crucial for her), and while you're welcome to speculate, it's pretty rude to publish your assumptions. As to why they haven't built the shop yet, it's obviously a complicated situation, and I have plenty of much simpler projects that I revive sometimes and then fail to see through for a few more years.

Personally, from what I've seen of TBN, it's a fantastic resource for tractor-specific questions, but it's got to be one of the worst places to ask this sort of question - especially from the woman's viewpoint.

My advice: Treat the money issues as a business deal, and put everything in writing - and if there's a decent amount of money involved (like building a shop), get a lawyer's help. Keep personal relations personal, and keep business business. Regardless of where your relationship goes, make sure you maintain sole control over your money & resources, you know by now how important that is.

 

[Sigarms]

I remember the previous post as well.
Got to wonder WHAT'S UP?

The OP generally views reality different from others. Sign for the man to run like H E double toothpicks LOL

 

[Cat_Driver]

Re: Determining shop痴 value over time?

Long story short: Planning a pre-nup type of situation. Both of us are home owners with a similar debt to income ratio but I have a larger net worth because of my farm property (my main source of income/self employment).

In order to accommodate him, we would need to build a metal shop (budget $50k). As much as I would LOVE a shop, it痴 not in the cards for me financially for a few years so he would have to shoulder the majority of the expense for now and either sell or rent out his house.

Obviously, we want to be fair and still protect our assets in a worse case scenario(s) and put it in writing before we move forward.

The rough plan we致e come up with so far is:
I pay the mortgage, proportional insurance and property tax costs...split utilities/community type expenses 50/50. I will pay for majority of maintenance/repair expenses (still need to figure out what痴 fair there too). Credit cards/checking/retirement all stay separate... possibly agree to contribute monthly to a savings account for more assurances? Survivorship percentage guarantees?

So what we need to figure out is how to calculate how much the shop is worth over time taking into account for things like value added, appreciation.... depreciation(?) minus my property tax and insurance contributions... anything else? My main concern is being able to buy him out if we separate within the next 2-5 years. Ideally, I could refinance and just pay a lump sum but self employment, ag exemptions, businesses on site make that a messy process and not a guarantee. We both agree to plan for a monthly payment scenario in case I can稚 refinance... but want to make sure we can both afford it and make it work.

I知 in a more rural area in north central Texas but is quickly developing... I read the national average ROI for a shop/garage is 63-81% and home values have increased an average of 3.4%.

Can anyone shed some light on their experiences? Ideas? Also how did the property tax assessor value the addition of your? What kind of insurance increases are we looking at?

I can give you some real number - my own.
I bought a steel building 25 years ago (Southern California) the building cost me $45,000 back then and last week
an insurance adjuster walked through and said it would take $450K to replace my building today.

I was paying rent on a building and I purchased 9 acres for less than the rent I was paying.

Another thing you are not calculating is tax deductions. If you have a corpotration you can personally own the building and rent it to your corporation, and deduct all exspenses related to the building.

What you can do is every year the two of you sit down and value the assets in the building along with the building and both agree on the value. Then also agree that either of you can purchase the building and assets for 50% of what you both determined to be the value - or sell it and split the value.