Value of Your Primary Residence Compared To Your Net Worth

[Bob Mueller Jr.]

An odd question, but what would a responsible RE investors consider to be a good % of the value (market price, not equity) of your primary residence compared to their total net worth? Example: For quick & easy math, let's say an investor has a net worth of $1 Million, should they be looking at primary residences worth $300K (30% of NW) $800K (80%) and so on. I know there's not a golden rule for this and it varies by a person's lifestyle, and life priorities, I'm just curious what % some of you are running at. And also what % you guys feel is tipping into excess where it will possibly inhibit other long-term investing goals of buying other properties, etc. For this example, lets assume the primary residence is not used for investment or cash flow at all (like STR) so it's a true Kiyosaki liability (take $$$ out of pocket), even if you own it free and clear....

[Tim McKelvey]

@Bob Mueller Jr.

This is an interesting hypothetical.  Rather that give the typical "it depends, what are your goals," I will try to provide some insight. I do not think a percentage is the appropriate measure.  Your key phrase is "Responsible RE investor."  Based upon this I would look at an actual dollar amount, not percentage that: 1) enables you to live in a safe neighborhood and decent schools district, is modest in size and fixtures, and has payments sufficiently small that you are still able to invest at least 10-20% (or whatever your target is) of your income.  Warren Buffet still lives in a very modest house.  He does not invest a set percentage of his net worth into his personal residence.