Author Topic: Most You Would Spend on Personal Residence?  (Read 4251 times)

norajean

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Re: Most You Would Spend on Personal Residence?
« Reply #50 on: June 17, 2020, 08:13:16 PM »
I think Warren Buffett’s primary residence is worth about $650k.

GuitarStv

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Re: Most You Would Spend on Personal Residence?
« Reply #51 on: June 17, 2020, 09:02:55 PM »
I think Warren Buffett’s primary residence is worth about $650k.

Maybe so.  But his beach house was on the market for 11 million last I checked.  :P

ixtap

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Re: Most You Would Spend on Personal Residence?
« Reply #52 on: June 17, 2020, 09:06:10 PM »
I think Warren Buffett’s primary residence is worth about $650k.

Maybe so.  But his beach house was on the market for 11 million last I checked.  :P

Right? Everyone comments on that one house that he has kept forever, as if it were his only house. So, the man likes his house, that in and of itself does not make him frugal.

mountainfamily

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Re: Most You Would Spend on Personal Residence?
« Reply #53 on: June 17, 2020, 10:03:07 PM »
I'd say we'd spend 3-4x our annual income on our next house. We are in a high cost of living area but now have an income level to match. Our starter house was 6x our annual income when we bought it (ouch) but since our income went up, the starter home is only 2x our annual income. It was the only thing we could get, scraping close to the bottom of the market. If we'd been able to get something just a little bigger or nicer, I'd stay and pay it off. But we both work from home and I love being at home. I don't like our current house enough to stay indefinitely. Most rooms are too dark/gloomy, and there's not an easy way to remedy that due to layout/lot/etc.

spartana

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Re: Most You Would Spend on Personal Residence?
« Reply #54 on: June 17, 2020, 10:36:14 PM »
There is no way to answer this question in any meaningful way without more input from you, OP. Either provide more info or start a case study if you want more than a bunch of opinions that are based on where other people live. Their opinions are just fine, but they are not a whole lot of use in judging your personal situation. And setting an arbitrary limit that puts you living in a shitty place just boggles the mind. Tomorrow's a promise, but not a guarantee. Striving to always live a balanced life is a much more worthwhile goal.
Yep this ^. If the OP is just looking for a number for a house purchase (not counting stuff like taxes, HOA, etc) then it's going to vary too much due to location to be of any value. $250k for example may get you a lake front mcmansions in the Midwest but would barely cover the down payment for a small hovel or one bedroom condo in a bad area in some HCOL areas like coastal Calif or NYC.

Isn’t location a large part of it though? Especially for the FIRE folks who’s income doesn’t scale if they were to live in a HCOL area.  You don’t HAVE to live where you currently live.  One of the reasons I live in NC is that the ratio of pay to cost of living is higher compared to somewhere like SoCal or NYC.
That's true but I think a lot of Fired people who have lived in an area a fairly long time and have family, relationships,  friends, activities and hobbies, etc in the area that they may have spent years cultivating aren't as willing to leave that behind to move to a LCOL area. I'm in this group myself so have choosen (at least for now) to live in a HCOL area. I'm able to make it work and still do all the things I want in RE (which aren't expensive fortunately) but have to make more financial trade offs then I would if I lived in a lower COLarea.
« Last Edit: June 17, 2020, 10:38:55 PM by spartana »

2Birds1Stone

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Re: Most You Would Spend on Personal Residence?
« Reply #55 on: June 18, 2020, 01:37:52 AM »
10% of net worth.

talltexan

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Re: Most You Would Spend on Personal Residence?
« Reply #56 on: June 19, 2020, 08:19:12 AM »
I see the case for comparing the value of your house to other assets on your balance sheet to diversify risk. I'll vote for 25% of the assets on your balance sheet.

JLee

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Re: Most You Would Spend on Personal Residence?
« Reply #57 on: June 19, 2020, 08:51:13 AM »
I don't know, 10 million dollars?

You could buy a million bananas for that!

You are spending way too much money per banana....

Not an Arrested Development fan, I see!

https://www.youtube.com/watch?v=Nl_Qyk9DSUw

norajean

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Re: Most You Would Spend on Personal Residence?
« Reply #58 on: June 26, 2020, 07:44:21 AM »
10% of net worth.

For W Buffett that would imply a $7 billion house.  How many bedrooms would that be?

norajean

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Re: Most You Would Spend on Personal Residence?
« Reply #59 on: June 26, 2020, 07:46:02 AM »
I think Warren Buffett’s primary residence is worth about $650k.

Maybe so.  But his beach house was on the market for 11 million last I checked.  :P

But that is a secondary home, not his primary residence.

GuitarStv

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Re: Most You Would Spend on Personal Residence?
« Reply #60 on: June 26, 2020, 08:20:28 AM »
I think Warren Buffett’s primary residence is worth about $650k.

Maybe so.  But his beach house was on the market for 11 million last I checked.  :P

But that is a secondary home, not his primary residence.

Guess I've just never been frugal enough to own multiple homes at the same time that I wasn't renting out.

:P

Dicey

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Re: Most You Would Spend on Personal Residence?
« Reply #61 on: June 26, 2020, 08:23:22 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?

Cassie

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Re: Most You Would Spend on Personal Residence?
« Reply #62 on: June 26, 2020, 02:36:50 PM »
It depends on what part of the country you live in. We have spent as little as our yearly income and as much as 3xs.   

spartana

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Dicey

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Re: Most You Would Spend on Personal Residence?
« Reply #64 on: June 27, 2020, 06:21:54 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?
Detroit? https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/10/top-10-us-cities-where-you-could-buy-a-home-for-under-100000-dollars.html
Hahaha! I mentioned somewhere on the forum that for free frugal fun in the time of pandemic, DH and I play a little real estate game.  We choose a place, look at the current listings and decide which property we'd buy. .Last week, Detroit and specifically the cost of housing there came up. Just to be contrarian, we chose Grosse Pointe, mostly because of its storied history, and because this is for entertainment and that's where the mansions are. We were kind of shocked at what a million, million plus gets you. But then there are the maintenance costs, particularly snow removal. That certainly is a comparatively minor cost, but no matter how well you do it, you keep having to do it over and over. Ugh, no thanks, lol!

GuitarStv

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Re: Most You Would Spend on Personal Residence?
« Reply #65 on: June 27, 2020, 08:55:52 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?
Detroit? https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/10/top-10-us-cities-where-you-could-buy-a-home-for-under-100000-dollars.html
Hahaha! I mentioned somewhere on the forum that for free frugal fun in the time of pandemic, DH and I play a little real estate game.  We choose a place, look at the current listings and decide which property we'd buy. .Last week, Detroit and specifically the cost of housing there came up. Just to be contrarian, we chose Grosse Pointe, mostly because of its storied history, and because this is for entertainment and that's where the mansions are. We were kind of shocked at what a million, million plus gets you. But then there are the maintenance costs, particularly snow removal. That certainly is a comparatively minor cost, but no matter how well you do it, you keep having to do it over and over. Ugh, no thanks, lol!

Snow removal costs are 20$ for a shovel.  Usually you get 5-10 years out of a shovel . . . so, about 2-4$ a year?  And you save on gym fees because of your free exercise!   :P

Dicey

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Re: Most You Would Spend on Personal Residence?
« Reply #66 on: June 27, 2020, 10:55:44 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?
Detroit? https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/10/top-10-us-cities-where-you-could-buy-a-home-for-under-100000-dollars.html
Hahaha! I mentioned somewhere on the forum that for free frugal fun in the time of pandemic, DH and I play a little real estate game.  We choose a place, look at the current listings and decide which property we'd buy. .Last week, Detroit and specifically the cost of housing there came up. Just to be contrarian, we chose Grosse Pointe, mostly because of its storied history, and because this is for entertainment and that's where the mansions are. We were kind of shocked at what a million, million plus gets you. But then there are the maintenance costs, particularly snow removal. That certainly is a comparatively minor cost, but no matter how well you do it, you keep having to do it over and over. Ugh, no thanks, lol!
Snow removal costs are 20$ for a shovel.  Usually you get 5-10 years out of a shovel . . . so, about 2-4$ a year?  And you save on gym fees because of your free exercise!   :P
It's the existence of snow that is the issue :-p

GuitarStv

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Re: Most You Would Spend on Personal Residence?
« Reply #67 on: June 27, 2020, 02:23:15 PM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?
Detroit? https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/10/top-10-us-cities-where-you-could-buy-a-home-for-under-100000-dollars.html
Hahaha! I mentioned somewhere on the forum that for free frugal fun in the time of pandemic, DH and I play a little real estate game.  We choose a place, look at the current listings and decide which property we'd buy. .Last week, Detroit and specifically the cost of housing there came up. Just to be contrarian, we chose Grosse Pointe, mostly because of its storied history, and because this is for entertainment and that's where the mansions are. We were kind of shocked at what a million, million plus gets you. But then there are the maintenance costs, particularly snow removal. That certainly is a comparatively minor cost, but no matter how well you do it, you keep having to do it over and over. Ugh, no thanks, lol!
Snow removal costs are 20$ for a shovel.  Usually you get 5-10 years out of a shovel . . . so, about 2-4$ a year?  And you save on gym fees because of your free exercise!   :P
It's the existence of snow that is the issue :-p

Don't you ever get tired of living in paradise though?

Dicey

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Re: Most You Would Spend on Personal Residence?
« Reply #68 on: June 28, 2020, 02:16:52 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?
Detroit? https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/10/top-10-us-cities-where-you-could-buy-a-home-for-under-100000-dollars.html
Hahaha! I mentioned somewhere on the forum that for free frugal fun in the time of pandemic, DH and I play a little real estate game.  We choose a place, look at the current listings and decide which property we'd buy. .Last week, Detroit and specifically the cost of housing there came up. Just to be contrarian, we chose Grosse Pointe, mostly because of its storied history, and because this is for entertainment and that's where the mansions are. We were kind of shocked at what a million, million plus gets you. But then there are the maintenance costs, particularly snow removal. That certainly is a comparatively minor cost, but no matter how well you do it, you keep having to do it over and over. Ugh, no thanks, lol!
Snow removal costs are 20$ for a shovel.  Usually you get 5-10 years out of a shovel . . . so, about 2-4$ a year?  And you save on gym fees because of your free exercise!   :P
It's the existence of snow that is the issue :-p

Don't you ever get tired of living in paradise though?
Not yet. Probably not ever ;-)

nurseart

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Re: Most You Would Spend on Personal Residence?
« Reply #69 on: June 29, 2020, 10:11:57 AM »
Enough to want to quarantine there. I bought a 700 square foot cottage where we lived for almost a decade and then bought a gut job investment property. We moved out of the primary into the fixer as soon as there was running water in order to rent the primary to cash flow the project and lived in a construction zone in a not good area for a year. After a drive by shooting on our block we couldn't handle it and bought a house in a fantastic location walking distance to the river in a safe area that checked the boxes without being over the top. My mental block was at 300k but we spent 322k and is is the best purchase we've ever made. Is it the quickest way to FI? No. Would I do it again? Absolutely.

talltexan

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Re: Most You Would Spend on Personal Residence?
« Reply #70 on: July 03, 2020, 06:22:22 AM »
My MiL took us all out on the boat for an early Fourth of July treat. Seeing those massive lake houses (this was about a half hour north of DT Charlotte where a lot of NASCAR drivers live) has me revising my willingness to spend upwards.

DadJokes

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Re: Most You Would Spend on Personal Residence?
« Reply #71 on: July 03, 2020, 08:36:26 AM »
2.5-3x income was what we were striving for when we bought our last house. Unfortunately, we couldn't find something in that range that we agreed on. We ended up getting a newly built house for $325k (3.6x income when we bought in 2018, and 3x now). I have no regrets, as I absolutely love the house. It's more square footage than I wanted, but we use all of it.

If I were to buy another house, 3x would be my goal again, but it would be just as unlikely to happen now as it was then. Housing prices have grown rapidly in this area, due in part to a sizable influx of people and the fact that builders just keep building houses bigger and bigger.

2Birds1Stone

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Re: Most You Would Spend on Personal Residence?
« Reply #72 on: July 03, 2020, 09:13:45 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?

Yea, that's about what I would feel comfortable spending right now.

With current NW that gives us a $70k budget. It would be a creative housing solution, tinyhouse, condo/townhouse in a LCOL area (fixer upper maybe), something like a container home, build a cabin, kit house, etc.

But there are certainly sticks and bricks houses selling for those prices in many parts of the USA, two that I'm familiar with are North Eastern PA, and the Sun Coast of Florida.

MudPuppy

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Re: Most You Would Spend on Personal Residence?
« Reply #73 on: July 03, 2020, 09:16:31 AM »
Seriously though. The size of the new builds is bonkers. We wanted to be a little be more East in the county but all the available houses were  nearly 3000sq ft.

talltexan

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Re: Most You Would Spend on Personal Residence?
« Reply #74 on: July 06, 2020, 07:05:56 AM »
I must be a hoarder. Just moved from 3,088 square feet to 3,600, and--honestly--I could use another 20% easily. Especially during the summer heat, all this indoor space keeps the kids out of my hair!

spartana

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Re: Most You Would Spend on Personal Residence?
« Reply #75 on: July 06, 2020, 08:59:24 AM »
10% of net worth.
Hmmm, $100k per million NW? Where ya gonna live?

Yea, that's about what I would feel comfortable spending right now.

With current NW that gives us a $70k budget. It would be a creative housing solution, tinyhouse, condo/townhouse in a LCOL area (fixer upper maybe), something like a container home, build a cabin, kit house, etc.

But there are certainly sticks and bricks houses selling for those prices in many parts of the USA, two that I'm familiar with are North Eastern PA, and the Sun Coast of Florida.
I've been doing the internet house hunting porn thing lately thanks to Covid semi-lockdown, and it is pretty amazing to me how many places have "seemingly" nice small houses in "seemingly" nice areas for very little. My current paid off house in a HCOLA (coastal SoCal) takes up much of my NW so living elsewhere looks nice. $70k would be amazing but more like $100k - $150k is probably realistic. Even my local ski town has very small cabins in-town for that much.
« Last Edit: July 06, 2020, 09:01:30 AM by spartana »

PGSD

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Re: Most You Would Spend on Personal Residence?
« Reply #76 on: July 09, 2020, 05:23:28 PM »
It may depend on your area  COL. In decent areas of SoCal, you'll be spending quite a bit more than in most places in the Midwest. You might be comfortable spending "only" $250K but, if you live out here, $250K likely won't get you much.

Instead, look at what you need, pick a smaller house that meets most of your needs that's in the best area you can somewhat comfortably afford (I'd stretch a little for a better neighborhood). It really is true when they say the three most important things in real estate are: "location, location, location."