House Poor

[CorbLand]

Close. The net value being ideally 20% or less of your income generating/appreciating assets. For example, you have $1 million in total assets. House would make up $200K of it.

This is not anything preached by anyone. It was something I came up with to guide us. Our actual goal was for it to be under 10%. It worked out to be a very good rule of thumb for us as we approached retirement.

The number one biggest mistake couples make in retirement is that dream home. Planning well ahead of time (as early as that first purchase) really helped to put thing into perspective for us.

Like someone above stated, it's different for everyone. The moral of the story for us was that we wanted our home to be our smallest asset because well, it's more of a liability when you consider, real estate taxes, operating costs and upkeep.

Are you saying that if your house was worth 200K and you had 1 million in assets including your house, and the house appreciated to 300K. You would sell it and down grade to keep it 20% instead of it being ~27%?

 

[Beendare]

Since we are telling stories;
Early 1980's due to the Carter admin horrible policy mortgage interest rates were over 16%. There was blood in the streets!

I took a 20% hit on the sale of a house I owned to buy a foreclosed home- bigger house on bigger acreage. [so many foreclosures during that time] I was single and it was a bit of a gamble at the time but it paid off.

I tried buying it for $275k with $50,000 down and a 10% mortgage rate. The bank told me they couldn't carry a new 10% mortgage on the books with the rates at over 16%. I ended up buying it at $250k with $25k down and a 13% note.....the note rate was more important to them than the actual price- go figure.

It only took a few years for that house to double....but then a developer paid more than that for the property.

 

[Ultracarry]

So if your wife was a CPA you would still feel this way?....damn dude crawl back under whatever rock you crawled out from under...smh

I don’t care if my wife was a CPA (means they just have a degree and not always good at what they do ( just passed some test and education requirements) … a business owner or made more money than I did… she would be more emotional than me and a man is supposed to be the final word in the relationship - at least that’s my view on it -

you can say I came out from under a rock, a man is supposed to be the leader in a relationship.. the solid one and ultimately responsible one for safety and security… unless you are making a concession because you want to give her the house SHE wants because that’s the type of guy you are and you can afford it (or she can) …

but if she can afford it and she makes the decisions then the main topic on this wouldn’t be about a guy being house poor because she would be paying for everything … thus not house poor.

 

[Hunter26]

Very interesting life conversation. The live once theory versus the not having to look over your shoulder. I would say make sure you are getting everything you could potentially realistically want if you upgrade. Some things I considered is do I want it paid off before I retire and what age do I want to retire? Then would the possibility of having maybe a vacation "house" in the future be something I would want more than an upgraded house now. Maybe the new house is enough of an upgrade that it scratches that possible itch. Plus the more space you have the more time and money goes into it. Then there is the more space equals more toys which cost more time and money. My guess is you understand all this but something good to see it written down.

I think you should do it. Sounds fun! HAHA

 

[Sccritterkiller]

I don’t care if my wife was a CPA (means they just have a degree and not always good at what they do ( just passed some test and education requirements) … a business owner or made more money than I did… she would be more emotional than me and a man is supposed to be the final word in the relationship - at least that’s my view on it -

you can say I came out from under a rock, a man is supposed to be the leader in a relationship.. the solid one and ultimately responsible one for safety and security… unless you are making a concession because you want to give her the house SHE wants because that’s the type of guy you are and you can afford it (or she can) …

but if she can afford it and she makes the decisions then the main topic on this wouldn’t be about a guy being house poor because she would be paying for everything … thus not house poor.

You keep doin you buddy...Good thing about America we don't have to agree.

 

[BR549]

When I bought my first house there were 2 rules. 1) I had to like it. Shooting, livestock, garden, shop, etc. 2) Mortgage and monthly bills couls not exceed what unemployment would pay.
Luckily I still love it and have never taken unemployment.
Paid it off in '15 so nope not house poor.
"Moved" out of state for work and bought another place here. It's a flipper so payments are low, sweatt equity is high. Cash flowing materials, easy peasy.

 

[fngTony]

Close. The net value being ideally 20% or less of your income generating/appreciating assets. For example, you have $1 million in total assets. House would make up $200K of it.

This is not anything preached by anyone. It was something I came up with to guide us. Our actual goal was for it to be under 10%. It worked out to be a very good rule of thumb for us as we approached retirement.

The number one biggest mistake couples make in retirement is that dream home. Planning well ahead of time (as early as that first purchase) really helped to put thing into perspective for us.

Like someone above stated, it's different for everyone. The moral of the story for us was that we wanted our home to be our smallest asset because well, it's more of a liability when you consider, real estate taxes, operating costs and upkeep.

I like it, but I don’t think it applies to younger people in my area anyway. For example, it would take half a million for a starter home in my area ain’t no way someone’s gonna have that equal 10 or 20% of their assets. It would take a $200,000 down payment just to get that mortgage to reasonable on a median salary assuming two income to a household. It’s just crazy how the total price for my first house is now the necessary down payment for a starter home in my area.

 

[peterk123]

Are you saying that if your house was worth 200K and you had 1 million in assets including your house, and the house appreciated to 300K. You would sell it and down grade to keep it 20% instead of it being ~27%?

That's a great question. I guess it depends. Hopefully the other assets are appreciating as well so it doesn't become a problem. But yes at some point you have to take a hard look at it. The driver being real estate taxes. The appreciation can become an issue because it is not a revenue earning asset. It's quite the opposite.

I just saw a story of a couple who had a home with acreage they lived in for like 25 years or something. It was obviously a nice home because they were paying ten grand in taxes back then I believe. Well recently it increased to $53k, an increase of almost 110% from the year before. They have to sell because the taxes will bleed them dry. If we could get rid of real estate taxes then this wouldn't even be a discussion.

 

[arrow179]

That's a great question. I guess it depends. Hopefully the other assets are appreciating as well so it doesn't become a problem. But yes at some point you have to take a hard look at it. The driver being real estate taxes. The appreciation can become an issue because it is not a revenue earning asset. It's quite the opposite.

I just saw a story of a couple who had a home with acreage they lived in for like 25 years or something. It was obviously a nice home because they were paying ten grand in taxes back then I believe. Well recently it increased to $53k, an increase of almost 110% from the year before. They have to sell because the taxes will bleed them dry. If we could get rid of real estate taxes then this wouldn't even be a discussion.

Florida Property Tax Elimination: DeSantis Plan 2026 (Updated May 2026)

Complete guide to Florida's property tax elimination proposal. Learn how DeSantis's 2026 plan could affect your home taxes, timeline, and what homeowners need to know.

www.propertyexemption.com

Florida proposes elimination of real estate property taxes for homeowners.

Another reason I am happy I currently reside in the “Free State of Florida”! This would be huge for Florida homeowners. It would only apply to what FL considers your homestead.

 

[Uncle Goonie]

3 houses in so far, first payment was right at 20% of my net income, second one was right around 1/3 of income, current one was back to 20% when I purchased 15 years ago. Increases in income and driving cheap but reliable cars has helped a bunch, house is almost paid for. Felt a bit poor at 1/3 of income going to house, not much left to save at the end of the month.
If you're in a situation with probable income increase that would be a better situation, or if you're moving in with equity your likelihood of getting stuck would be much less.

 

[Burnsie]

That's a great question. I guess it depends. Hopefully the other assets are appreciating as well so it doesn't become a problem. But yes at some point you have to take a hard look at it. The driver being real estate taxes. The appreciation can become an issue because it is not a revenue earning asset. It's quite the opposite.

I just saw a story of a couple who had a home with acreage they lived in for like 25 years or something. It was obviously a nice home because they were paying ten grand in taxes back then I believe. Well recently it increased to $53k, an increase of almost 110% from the year before. They have to sell because the taxes will bleed them dry. If we could get rid of real estate taxes then this wouldn't even be a discussion.

$53K in real estate taxes!!!
I'm not sure sure how to make a choking gagging sound with writng?

 

[NRA4LIFE]

I love it when I get my property tax bill for our land in MO. 48 acres, $32. Not $32K, $32. Not so liking our WA tax bill at $11K now.

 

[CorbLand]

That's a great question. I guess it depends. Hopefully the other assets are appreciating as well so it doesn't become a problem. But yes at some point you have to take a hard look at it. The driver being real estate taxes. The appreciation can become an issue because it is not a revenue earning asset. It's quite the opposite.

I just saw a story of a couple who had a home with acreage they lived in for like 25 years or something. It was obviously a nice home because they were paying ten grand in taxes back then I believe. Well recently it increased to $53k, an increase of almost 110% from the year before. They have to sell because the taxes will bleed them dry. If we could get rid of real estate taxes then this wouldn't even be a discussion.

Interesting idea and if its works for you, have at it. There is only so far one could downgrade to keep your 20% threshold though.

I can see having to reevaluate if circumstance change but I cant say I would be running out and selling my house just because it became too much of my net worth. Seems like one that would be better suited to cross that bridge if it happens.

If you can find it, I would be interested in the article you referenced.

 

[Uncle Goonie]

I love it when I get my property tax bill for our land in MO. 48 acres, $32. Not $32K, $32. Not so liking our WA tax bill at $11K now.

My county's "luxury tax" on my 16 year old bass boat was $430 last year!

 

[tony]

I made a thread awhile back about my girlfriend and myself, our home building adventures.
Update: our property is still dirt.
We have constantly chase the two prospective builders down for answers, and estimates.
One guy said he didn’t think the excavating company could get to the top of the hill.
Apologize a head of time. Are you ******* serious?! A tracked machine can’t drive up a 12% grade? Just out the road they are building a new highway and those giant off road dump trucks have no issues driving up the side of a cliff.
The other said it would be a 100k to dig and build the basement.
What pricing we can pry out of these two is roughly 500,000 and up for a 2 bedroom house.
I called the guy that mulched the build site, he wants $1200.00 to mow the damn grass!
The farmer down the road said he’d bring his small brush hog up and do it for $200-300.00.
We are at the point of just selling the land. I really think nobody wants to work, or build this simple house.
We’ve been in contact with an outfit the specializes in land and farms. He’s saying we can get out of it what we put in it.
I think Beth, my gf had finally realized we could have bought something for similar money.
I tried to tell her.

While not necessarily “house poor”. This is a perspective of trying to build and how much of a pain in the ass it is here. And how quick it can lead to massive debt.

 

[Gseith]

For some we will never be house rich when it comes to property taxes.
I just paid my house off this year. This is great, but it only cut my monthly payment in half. I’m still saving money every month for taxes, which will probably never end.
I’m definitely becoming a cynical old man. I paid off my house now leave me alone. We should be able to save more when the house is paid off.

 

[Rich M]

That's a great question. I guess it depends. Hopefully the other assets are appreciating as well so it doesn't become a problem. But yes at some point you have to take a hard look at it. The driver being real estate taxes. The appreciation can become an issue because it is not a revenue earning asset. It's quite the opposite.

I just saw a story of a couple who had a home with acreage they lived in for like 25 years or something. It was obviously a nice home because they were paying ten grand in taxes back then I believe. Well recently it increased to $53k, an increase of almost 110% from the year before. They have to sell because the taxes will bleed them dry. If we could get rid of real estate taxes then this wouldn't even be a discussion.

I don't count my home value in my investment/retirement account. The home value is added after the investments are totaled.

Taxes and insurance can be a killer.

For some we will never be house rich when it comes to property taxes.
I just paid my house off this year. This is great, but it only cut my monthly payment in half. I’m still saving money every month for taxes, which will probably never end.
I’m definitely becoming a cynical old man. I paid off my house now leave me alone. We should be able to save more when the house is paid off.

Our mortgage is dependent on the insurance rates. We went from 600/yr to 800/yr to 2400/yr now are somewhere north of there. Taxes and principal portion of mortgage remains the same, insurance is the driver. Crazy!!

 

[NRA4LIFE]

I made a thread awhile back about my girlfriend and myself, our home building adventures.
Update: our property is still dirt.
We have constantly chase the two prospective builders down for answers, and estimates.
One guy said he didn’t think the excavating company could get to the top of the hill.
Apologize a head of time. Are you ******* serious?! A tracked machine can’t drive up a 12% grade? Just out the road they are building a new highway and those giant off road dump trucks have no issues driving up the side of a cliff.
The other said it would be a 100k to dig and build the basement.
What pricing we can pry out of these two is roughly 500,000 and up for a 2 bedroom house.
I called the guy that mulched the build site, he wants $1200.00 to mow the damn grass!
The farmer down the road said he’d bring his small brush hog up and do it for $200-300.00.
We are at the point of just selling the land. I really think nobody wants to work, or build this simple house.
We’ve been in contact with an outfit the specializes in land and farms. He’s saying we can get out of it what we put in it.
I think Beth, my gf had finally realized we could have bought something for similar money.
I tried to tell her.

While not necessarily “house poor”. This is a perspective of trying to build and how much of a pain in the ass it is here. And how quick it can lead to massive debt.

Christ, we are in the planning process of having a bathroom remodeled. One gal came out and quoted $23K just to put in a new shower! I am in severe sticker shock. Going to try and do some of it myself. When on SS and a single pension, I think this qualifies as house poor.

 

[peterk123]

Interesting idea and if its works for you, have at it. There is only so far one could downgrade to keep your 20% threshold though.

I can see having to reevaluate if circumstance change but I cant say I would be running out and selling my house just because it became too much of my net worth. Seems like one that would be better suited to cross that bridge if it happens.

If you can find it, I would be interested in the article you referenced.

Found it. Link below. I guess the moral of my story is that the ultimate goal is to build enough wealth that the value, which drives operating cost, does not become an issue, ever. That's why the home was such a small part of the overall plan, which is the reverse I think for many homeowners. I know it's a weird way of looking at it but I think it works.

You think that theory is twisted. Here's what I think about vacation homes..... just move to where you would vacation

Dream home, tax nightmare: Bozeman couple hit with 107% spike in property taxes

Dan and Carol Webster moved to Montana 26 years ago and built their retirement dream home in Bozeman, but now say the state’s property tax overhaul is hitting them unevenly.

www.ktvq.com

 

[jjohnsonElknewbie]

Found it. Link below. I guess the moral of my story is that the ultimate goal is to build enough wealth that the value, which drives operating cost, does not become an issue, ever. That's why the home was such a small part of the overall plan, which is the reverse I think for many homeowners. I know it's a weird way of looking at it but I think it works.

You think that theory is twisted. Here's what I think about vacation homes..... just move to where you would vacation

Dream home, tax nightmare: Bozeman couple hit with 107% spike in property taxes

Dan and Carol Webster moved to Montana 26 years ago and built their retirement dream home in Bozeman, but now say the state’s property tax overhaul is hitting them unevenly.

www.ktvq.com

Lol, or just buy a camper and come and go as you please. That is unless you want the resident tags!