Numbers/Excel: How can I calculate this as a percentage?

tekno

macrumors 6502a
Original poster
Oct 15, 2011
842
4
When I bought my house, I contributed £82,500 and my parents contributed £36,150 (the rest was obviously mortgage).

Now I'm selling I want my parents to get their 36k back and a percentage of the profits - how can I figure out what percentage of the profit they deserve??

Thanks!
 

Macman45

macrumors G5
Jul 29, 2011
13,199
133
Somewhere Back In The Long Ago
This isn't as easy as a simple formula....It's going to depend on the interest, the rise in property values (or decline) etc.

Once you have all the figures for the parameters, it's an easy job to work it out, but you need the figures first.
 

tekno

macrumors 6502a
Original poster
Oct 15, 2011
842
4
This isn't as easy as a simple formula....It's going to depend on the interest, the rise in property values (or decline) etc.

Once you have all the figures for the parameters, it's an easy job to work it out, but you need the figures first.
Thanks for the reply. I've got those figures - once sold, fees paid, mortgage paid-off etc., I'll have around £35,000 left over and I want to work out how much I should give my parents.

For example, if I had put in £75k and my parents £25k, I could easily see they should get 25% of the £35k profit - but the actual figures are a little more confusing!
 

CylonGlitch

macrumors 68030
Jul 7, 2009
2,929
109
SoCal
<Contributed Amount> / <Original House Price> = X / 100

Say the house was worth £200,000 initially.

£36,150 / £200,000 = X / 100
X = (36,150 / 200,000) * 100 = 18.075% investment

Now, figure the current price and how much they should get back using the same type of formula.

<Return Amount> / <Current House Price> = <percentage invested> / 100

or from the above example, assume the house is worth £300,000 today :

<Return Amount> / £300,000 = 18.075 / 100

<Return Amount> = (18.075 * 300,000) / 100 = £54,225

This only takes in the values you put into it. In your case, your initial house price was the total you put down and your parents put down (£82,500 + £36,150 = £118,650). The current house price is the amount that you'll be getting back AFTER the remaining mortgage is paid off. If say your house is worth £500,000, but you still owe £350,000 mortgage, you'll only be getting £150,000 back and thus that is the price listed as <Current House Price> not the street value.

This assumes that you paid the mortgage the whole time without any help. If they contributed to the monthly mortgage, you'd have to figure out how much of that they invested in.

Let me know if there is anything more you could use help with there. It isn't that hard, unless there are other things that come up. I'd recommend being completely honest with them and showing them all the paperwork; don't want a few dollars hurting family relationships.
 

balamw

Moderator
Staff member
Aug 16, 2005
19,368
974
New England
It's the same basic idea:

82,500 + 36,150 = 118,650

36,150/118,650 = 0.3046 = 30.5%

(EDIT: That doesn't cover any $$$ you put in via the mortgage CylonGlitch's post is far more thorough.)

B
 

CylonGlitch

macrumors 68030
Jul 7, 2009
2,929
109
SoCal
It's the same basic idea:

82,500 + 36,150 = 118,650

36,150/118,650 = 0.3046 = 30.5%

(EDIT: That doesn't cover any $$$ you put in via the mortgage CylonGlitch's post is far more thorough.)

B
I guess I should have stated that his original house price should be the total amount put down, not the street price. Thus he should be using the £118,650 for that part of the calculation, which results in the 30.5% you listed.
 

Crazy Badger

macrumors 65816
Apr 1, 2008
1,154
477
Scotland
If you're just wanted to give you parents a percentage of the £35k profit based on you initial investment it's pretty straight forward.

Total Invested = £82,500 (You) + £36,150 (Parents) = £118,650

Percentage invested by Parents = (£36,150/£118,650)*100 = 30.46%

30.46% of £35k profit is £10,611 :D
 

balamw

Moderator
Staff member
Aug 16, 2005
19,368
974
New England
I guess I should have stated that his original house price should be the total amount put down, not the street price. Thus he should be using the £118,650 for that part of the calculation, which results in the 30.5% you listed.
I think your idea was right, though I'd probably do it something like this:

The total principal paid of the mortgage (*) = (parents contribution + down payment + mortgage payments). That number should be relatively easy to get since it's (the original value of the mortgage) - (the amount required to pay it off).

Parents share would then be (parents contribution)/(total principal paid on mortgage).

This take into account the extra $$$ the child put into the house over its lifetime.

(*) This is the basis value of the house not owned by the bank.

B
 

tekno

macrumors 6502a
Original poster
Oct 15, 2011
842
4
I wasn't expecting such thorough replies - that's a great help. Thanks all.