House Poor

[NRA4LIFE]

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.


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!!

My RE tax and insurance combined eclipsed $15K this year. When you add up all the other house bills, I think we are now paying over $1500 a month to live in our paid off house.

 

[Hnthrdr]

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.

That is absurd, shop around, many contractors throw out wild bids to see if someone will bite

 

[dr.mooseknuckles]

It's USC...you have to compete with folks buying houses for their kids while they are in school....ask me how I know.....
Limits supply.
I dont know why anyone would live in the armpit of SC, 10 degrees hotter there than any other place in the state.

You're correct, but also incorrect. Ain't no parent buying a 1.5-2.0 million dollar home in Heathwood, King's Grant, or around Lake Katherine. Those are considered, "Downtown" neighborhoods. Not the crappy college kid homes all around campus in the true downtown area.

Folks from up North or any liberal state out West are coming in and slapping down cash on the barrel for asking price or above. Full blown bidding wars in some instances, in which some of my friends have been a part of. There are some bare dirt lots in these neighborhoods that are 1/4 to 1/2 acre going for $750k

I'm from Columbus, GA originally, so Columbia is basically the same, just a bit bigger. Not so bad and it's growing, hence the home market.

 

[KurtR]

Seeing what others pay for taxes is crazy. Built a new house in 14 1300 sq ft 1000sq ft heated garage icf basement fully finished basement on 2 acres. I did a bunch of work my self and all done at 180k. I liked my payment on my first house i bought in 05 for 30k a lot better but doubled our money on that house. I think my property taxes were 1800 last year.

 

[CorbLand]

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

I don't count my house into my retirement plan as in if I need 1.5 million to retire and my house is worth 750,000.00, I only need 750,000.00 in my other retirement accounts. I just know I wont be selling my house just because it hits some value threshold.

But like I said, if it works for you, have at it.

 

[pods8 (Rugged Stitching)]

I want that for the kids

I wanted something bigger in terms of land with the kids in mind (and me obviously) but life moves and stumbles and extended single income years when they were young said otherwise. They got their own bedrooms in this house, that was the compromise vs larger property at the time. At this stage the kids will all be 18 in 5yrs so that window was missed. Now I'll just keep paying on the 2.75% mortgage, get them through school, have what adventures we can and see where things go. THIS isn't my retirement house but I haven't figured out where that is yet either, it works in the meantime. Maybe I'll have a cool place for grandkids to play.

 

[Alpine4x4]

Do it. We found 20ac a few years ago we knew we had to have and it stretched our budget, but we did it. Then we built on it. Total we're sitting at 31% of our net going to the mortgage. My mortgage is over 3x what it was prior on this new place, but we have 20ac, my inlaws bought the bare 20ac next to us so we have 40ac and I can only see 3 neighbors. I have deer, turkey, and bear out my back door, the kids have piles of room to run around on and if I never had to leave I wouldnt. Budgets a little tighter due to the mortgage, but we still get by. A refi would help, but we were able to lock in at 5.875 in March which is as low as its been in a long while. Our only debt besides the mortgage is a tractor, all 5 cars are paid for, trailers paid for, boats paid for and I do all my own maintenance and repairs to keep the fleet moving. We paid everything off before buying to help with the strain of the bigger mortgage until we either refi it down or our salaries catch up further on it.

 

[S.Clancy]

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.

There hasn't been a time in my life (~40yrs) where it's paid more to be competent and be able to build, fix, whatever your own stuff.

 

[David Gough]

Anybody know where to find some of those sub-3% refi rates?

 

[cnelk]

There hasn't been a time in my life (~40yrs) where it's paid more to be competent and be able to build, fix, whatever your own stuff.

BS
can’t beat sweat equity.
Cheapest investment out there

 

[7mm-08]

Very interesting thread, for sure. I really appreciate hearing the different philosophies on the housing subject. I mostly envy the guys who talk about living in one house for 35 or 40 years - you can't imagine how much money this strategy saved you. I had nine geographical moves (directed by Uncle Sam) in 32 years with the federal government. Pretty hard to build true home equity when you're living through that shit show.

 

[willfrye027]

I would say we are house poor at the moment. First time home buyer bought in Oct 2025. About half of my take home pay is going to mortgage. I am still maxing out retirement roughly 70k pretax per year, and paying aggressively on my student loan debt..but there’s not much wiggle room. Was able to refinance recently which helped.

everyone’s situation is different but I do not enjoy the feeling. I’m having to work more hours than I want to and we have to be on a fairly tight budget. The way things are going I think we will be very very happy about this decision in 5-10 years but I am working pretty damn hard to make it happen right now.

 

[Rich M]

My RE tax and insurance combined eclipsed $15K this year. When you add up all the other house bills, I think we are now paying over $1500 a month to live in our paid off house.

Wow!

Is there any program to reduce the amount of taxation? Homestead exemption, age (some states reduce taxes for folks over 65), etc?

 

[Sccritterkiller]

You're correct, but also incorrect. Ain't no parent buying a 1.5-2.0 million dollar home in Heathwood, King's Grant, or around Lake Katherine. Those are considered, "Downtown" neighborhoods. Not the crappy college kid homes all around campus in the true downtown area.

Folks from up North or any liberal state out West are coming in and slapping down cash on the barrel for asking price or above. Full blown bidding wars in some instances, in which some of my friends have been a part of. There are some bare dirt lots in these neighborhoods that are 1/4 to 1/2 acre going for $750k

I'm from Columbus, GA originally, so Columbia is basically the same, just a bit bigger. Not so bad and it's growing, hence the home market.

Oh I am well aware of the influx..my SC county currently has suspended all BPs for at least the next 6 months in my area. Like I said town came to me...property value is up 300% and I surrounded by Yankees, and now a Starbucks, a target, and a costco, ect...used to be bait and tackles stores and feed and tac stores...My youngest is high school, only a few more years till we can move further out.

 

[Q child]

I think if you're buying a house these days, your likely going to be house poor. I am just getting my head above water after about two years.
It's harder to buy a house now than it used to be. Interest rates are high. And houses cost a ton. It's a recipe for some sacrifices.
I just crunched some numbers:
In the late 1980s interest rates were 10%-11%. Houses cost on average $140k. Average pre-tax household income was $60k-$65k. That means that average monthly mortgages were about $1k or 20% of the average pre-tax income ($5k per month).
Now, interest rates are 6%-7%. Houses cost on average $500k+. Average pre-tax household income is $85k. That means that average monthly mortgages are about $3k or about 40% of the average pre-tax income ($7k per month).
Housing prices have doubled in the last 40 years.

 

[NRA4LIFE]

Housing prices have doubled in the last 40 years.

Our prices have quadrupled in the last 25 years or so.

 

[Q child]

Our prices have quadrupled in the last 25 years or so.

I meant costs compared to income on average have doubled (even when comparing to years with higher interest rates). But yes, the rapidly increasing home prices and the slowly increasing incomes plus high interest rates are making homes less attainable than they used to be. And increasing the likelihood that a new home owner will be house poor.

 

[Sneaker]

My first made me house poor. We were barely making it by month to month. I got lucky and my income went up quick and the market went up fast and I sold for a gain after two tight years. It is a horrible and stressful feeling that is made so much worse by reaching to the high end of what you “can qualify for”. I don’t know anybody that regrets buying 40% less house than they could have bought $$$ wise.

 

[Ross]

I had the Mrs read a couple of the responses. Let’s just say, she laughed and cringed at the same time. We bought our 1st home in 1989. Moved to our current home in 1985. As our income rose we looked around to upgrade several times. We said no, let’s just do some upgrades, stay put, have zero debt and I can retire at 60. That was 3 yrs ago. The Mrs has handled all the finances for 30 years, is a CPA and Comptroller. Yeah I feel pretty chill with her handling the finances no questions asked Never have been house poor.

 

[fngTony]

We bought our 1st home in 1989. Moved to our current home in 1985.

Not fair if you’re time traveling