Anonymous
Post 11/19/2021 14:17     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:What's the typical income/net worth for this demographic? Is anyone making under 7 figures or having a net worth below 10 million?


There may be, but not us. The carrying costs are significant in terms of interest, taxes, maintenance, upkeep, and utilities. Even if there is no mortgage, the opportunity cost of having $3M of equity just sitting there is very high.

I would say factoring all of the above, a $3M home may have about a 150-200k annual effective cost. Unless you are making 7 figures, that kind of housing cost is just excessive.

hmmm... what if that $3M equity becomes $5M or $6M in 7-8 years?
And your estimate on the effective cost is way off. A $3M house here is new or newer, so there is minimal maintenance and utilities are also low due to the new building standards.


I'm not sure if a $3M home would become $5M or $6M in such a short period of time. It can happen on a one-off basis, I guess, but traditionally, the appreciation of homes in this price range does not work like this. Your typical $3M home already is in a very nice neighborhood, is of a certain size, and built to a certain quality standard. Generally speaking, unless significant renovation or improvement is done to a home, the value would not increase significantly. I mean you can take a look at the current 5-6 million dollar homes in the area and see what their prices were 7-8 years ago. There is a $4M home on the market down the road and it was sold 7 years ago for $3.5M. Another one nearby is selling for $5.5M, and it sold 10 years ago for, $5M. These are anecdotal, of course but they match what I've seen in general browsing for homes in the area.

My estimate on effective cost is factoring in either mortgage interest or opportunity cost on about 2M. I place this cost at about 5% a year, or about $100k. Taxes will be over 30k, and another 20k for everything else is rather conservative.


We have a 7000 sqft on 2/3 of an acre we purchased at just under $2M a couple of years ago. It costs a lot to run a house this size, and even more for a larger house. It’s not the utilities that are expensive, it’s

Maintaining Landscaping
Weekly housecleaning
Other maintenance (power washing sidewalks, outdoor lighting, window washing, gutter cleaning)
And things break even in newer houses. And a larger house means more things to break. We have two refrigerators, a freezer, and ice machine, two water heaters, two laundry rooms, two furnaces, a generator, etc, etc. We have contracts with lots of folks to maintain everything.

Honestly, we conservatively spend $50k per year on maintenance. And it would be stupid to not take care of a $2M investment, but it’s definitely a luxury to have this much space.
Anonymous
Post 11/18/2021 15:59     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:What's the typical income/net worth for this demographic? Is anyone making under 7 figures or having a net worth below 10 million?


There may be, but not us. The carrying costs are significant in terms of interest, taxes, maintenance, upkeep, and utilities. Even if there is no mortgage, the opportunity cost of having $3M of equity just sitting there is very high.

I would say factoring all of the above, a $3M home may have about a 150-200k annual effective cost. Unless you are making 7 figures, that kind of housing cost is just excessive.

hmmm... what if that $3M equity becomes $5M or $6M in 7-8 years?
And your estimate on the effective cost is way off. A $3M house here is new or newer, so there is minimal maintenance and utilities are also low due to the new building standards.


I'm not sure if a $3M home would become $5M or $6M in such a short period of time. It can happen on a one-off basis, I guess, but traditionally, the appreciation of homes in this price range does not work like this. Your typical $3M home already is in a very nice neighborhood, is of a certain size, and built to a certain quality standard. Generally speaking, unless significant renovation or improvement is done to a home, the value would not increase significantly. I mean you can take a look at the current 5-6 million dollar homes in the area and see what their prices were 7-8 years ago. There is a $4M home on the market down the road and it was sold 7 years ago for $3.5M. Another one nearby is selling for $5.5M, and it sold 10 years ago for, $5M. These are anecdotal, of course but they match what I've seen in general browsing for homes in the area.

My estimate on effective cost is factoring in either mortgage interest or opportunity cost on about 2M. I place this cost at about 5% a year, or about $100k. Taxes will be over 30k, and another 20k for everything else is rather conservative.
Anonymous
Post 11/18/2021 15:56     Subject: How rich are people who buy 3 million dollar houses
$700-800k HHI
Lots of equity
Anonymous
Post 11/18/2021 15:46     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:What's the typical income/net worth for this demographic? Is anyone making under 7 figures or having a net worth below 10 million?


There may be, but not us. The carrying costs are significant in terms of interest, taxes, maintenance, upkeep, and utilities. Even if there is no mortgage, the opportunity cost of having $3M of equity just sitting there is very high.

I would say factoring all of the above, a $3M home may have about a 150-200k annual effective cost. Unless you are making 7 figures, that kind of housing cost is just excessive.

hmmm... what if that $3M equity becomes $5M or $6M in 7-8 years?
And your estimate on the effective cost is way off. A $3M house here is new or newer, so there is minimal maintenance and utilities are also low due to the new building standards.
Anonymous
Post 11/18/2021 15:34     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:What's the typical income/net worth for this demographic? Is anyone making under 7 figures or having a net worth below 10 million?


There may be, but not us. The carrying costs are significant in terms of interest, taxes, maintenance, upkeep, and utilities. Even if there is no mortgage, the opportunity cost of having $3M of equity just sitting there is very high.

I would say factoring all of the above, a $3M home may have about a 150-200k annual effective cost. Unless you are making 7 figures, that kind of housing cost is just excessive.
Anonymous
Post 11/18/2021 12:32     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Living in a 3.5M house (cost at 2M). HHI 500K. NW 6M.
I don't consider myself rich, just comfortable.


OP said people who buy 3M homes, not people who buy 2M homes and enjoy appreciation.

I was trying to demonstrate that you don't have to make 7 figures to buy a 3M house. Even if I wasn't living in a 3M house, I could still feel comfortable buying it now.


You would feel comfortable buying a $3m house on $500k HHI? You're an idiot.

yes, I'll be comfortable with buying a $3M house on $500k HHI AND $6M NW. I don't think I'm an idiot. The house is also an investment if you select the right area.

And with the current rate the Fed is printing money and the historically low mortgage rate, you'd be an idiot not to buy that house and inflate your money away.
Anonymous
Post 11/18/2021 12:31     Subject: Re:How rich are people who buy 3 million dollar houses
This is an interesting discussion. DH and I have been making more than $1M for the past three years but have barely changed our lifestyle because the money still doesn't feel real. We started investing for retirement late and just reached $6M saved, thanks to aggressive savings and stock market returns. DH recently broached moving from our house (we paid 700K in 2012, it's now paid off and is worth about twice that) into something just under $3M and my first reaction was sticker shock: "We can't afford that!" Technically I suppose we can but I would feel more comfortable if we had more saved for retirement.
Anonymous
Post 11/18/2021 12:18     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Living in a 3.5M house (cost at 2M). HHI 500K. NW 6M.
I don't consider myself rich, just comfortable.


OP said people who buy 3M homes, not people who buy 2M homes and enjoy appreciation.

I was trying to demonstrate that you don't have to make 7 figures to buy a 3M house. Even if I wasn't living in a 3M house, I could still feel comfortable buying it now.


You would feel comfortable buying a $3m house on $500k HHI? You're an idiot.

yes, I'll be comfortable with buying a $3M house on $500k HHI AND $6M NW. I don't think I'm an idiot. The house is also an investment if you select the right area.
Anonymous
Post 11/18/2021 10:35     Subject: Re:How rich are people who buy 3 million dollar houses
Anonymous wrote:We have hhi of 1.2m, net worth of around 4.5 and are staying in our 900k house.


I hope you only recently started making 1.2m. Otherwise I wonder where all that money is going.
Anonymous
Post 11/18/2021 09:37     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:It's also people that made a lot in equity in their previous homes.
.

I think this. Where I live, my guess is people make about $1m a year, but have lots of home equity they’re rolling into it
Anonymous
Post 11/18/2021 09:30     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Living in a 3.5M house (cost at 2M). HHI 500K. NW 6M.
I don't consider myself rich, just comfortable.


OP said people who buy 3M homes, not people who buy 2M homes and enjoy appreciation.

I was trying to demonstrate that you don't have to make 7 figures to buy a 3M house. Even if I wasn't living in a 3M house, I could still feel comfortable buying it now.


You would feel comfortable buying a $3m house on $500k HHI? You're an idiot.


This. Unless you have no kids. Or no savings.
Anonymous
Post 11/18/2021 08:54     Subject: How rich are people who buy 3 million dollar houses
And some go the other way. I worked at a white shoe investment bank for mega rich. I was doing a project regarding account maint and had access Names and addresses and account balance of the wealthy. I found my sisters neighbor. Mind you she lives in a Chevy Chase type area. But she lived in a 80 by 100 2,000 square foot house that she raised family in worth around 650k back in 1997 and she was worth one billion. Yes one billion in 1997.

I also found a guy in a split level worth 100 million.

Anonymous
Post 11/18/2021 08:48     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:Living in a 3.5M house (cost at 2M). HHI 500K. NW 6M.
I don't consider myself rich, just comfortable.


Hahahahahaha this is hilarious.

Do the rich ever consider themselves rich, though?



Anonymous
Post 11/18/2021 08:36     Subject: Re:How rich are people who buy 3 million dollar houses
We have hhi of 1.2m, net worth of around 4.5 and are staying in our 900k house.
Anonymous
Post 11/18/2021 08:34     Subject: How rich are people who buy 3 million dollar houses
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Living in a 3.5M house (cost at 2M). HHI 500K. NW 6M.
I don't consider myself rich, just comfortable.


OP said people who buy 3M homes, not people who buy 2M homes and enjoy appreciation.

I was trying to demonstrate that you don't have to make 7 figures to buy a 3M house. Even if I wasn't living in a 3M house, I could still feel comfortable buying it now.


You would feel comfortable buying a $3m house on $500k HHI? You're an idiot.