“Exclude Property if Purchase Not Completely Fulfilled” is an advanced setting for properties and other illiquid assets that is used to direct Voyant on how to handle cases where insufficient funds are available for a future property purchase.
When this happens Voyant could, based on this setting, either:
a) Come as close as possible to purchasing the property, using whatever funds are available, show as a shortfall the portion of the purchase price that could not be met, and start tracking the property in the assets charts;
b) Assume that if the full purchase price cannot be met and therefore the property purchase will not be made. The full purchase price will be shown as a shortfall and the property will be excluded from the assets charts.
In either case, a shortfall will be shown in the charts to alert you and your client that insufficient funds were available to purchase the property.
“Exclude Property if Purchase Not Completely Fulfilled" is a setting found on the Property/Assets screen under Advanced Settings on the Details panel.
Note: This option is only shown when the New Purchase? checkbox is selected. Otherwise, the setting will be disabled (greyed out).
You may select or deselect the “Exclude Property if Purchase Not Completely Fulfilled” checkbox depending on what you want to show when funds are insufficient to purchase a property.
For example, in the following case the client would like to purchase a holiday home for £1,000,000 when he retires. The cost of the property is entered at its current valuation (in today's money) with the future purchase price inflating. And based on our projections it appears that he will not have enough money to buy the property.
Option 1, the Exclude Property setting is selected – If cash, including financing from a mortgage, and other liquid assets do not meet the full purchase price of the property, it will not be purchased. A shortfall in the amount of the full purchase price will be shown in the cash flow chart, indicating that property could not be purchased. No funds will be withdrawn from cash or assets to partially meet the purchase expense for the property. Also importantly, assets and income that might have been used to purchase the property will remain in the plan to meet other expenses.
Option 2, the Exclude Property setting is deselected - Funds will be withdrawn from cash, which will include any financing from a mortgage, and other available liquid assets in an attempt to purchase the property. If these funds do not meet the full purchase price of the property, a red shortfall will be shown in the Cash Flow chart indicating the amount of the purchase that could not be fulfilled. The property will be assumed purchased, however. This shortfall must be addressed at some point for the plan to be valid.
Note: The property will be tracked in the assets charts as though it was purchased.