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"House Rich" Has Turned Into "House Millionaire"

The new reality of being house rich and how to use your primary home to build wealth.

mansion with pool

According to a recent report, 1 in every 24 New Yorkers is now officially a millionaire. This is primarily due to the increase in real estate prices over the last decade and although your primary home shouldn't be considered an investment, it's definitely an asset. The reason it's an asset is that it can be sold for value, and in the case for most home owners, that value has increased substantially. They key is to be able to extract that new found value and below are a few viable options:


  • Sell: Evaluate relocating to take advantage of downsizing, tax-free capital gains, and potentially moving to a no income tax state. For example, an individual may exclude $250,000 of capital gains from the sale of their primary residence, and $500,000 for couples. This could be a great strategy to bolster your retirement savings when combined with moving to a smaller home in a state with no income tax.

  • Rent: Rents have increased rapidly over the last few years in most areas of the country and turning your primary residence into a rental could be a great way to unlock the value of your asset. If you choose to pursue this option, you should know that this isn't passive income and you are giving up the primary residence tax exclusion above. That being said, it's a viable option to create a semi-passive income stream.

  • Home Equity: Tap your primary residence's home equity to purchase a rental. Home equity rates are typically lower than a traditional mortgage for a rental property, but you should be cautious as home equity loans fluctuate and could increase.

  • Reverse Mortgage: I'm generally not a fan of reverse mortgages, but if you want to retire, remain in your home, and the bulk of your wealth resides in the form of home equity, then this is certainly an option.


Being house rich isn't a bad thing and there are numerous strategies to make the best use of that wealth.


If you are looking for a Certified Financial Planner who can help you create a roadmap to wealth, then fill out the form below:



Disclaimer: The information in this post is provided for your convenience only and is not intended to be treated as financial, investment, tax, or other advice. The information is intended to be educational and is not tailored to the investment needs of any specific individual.  It is also not intended to be relied upon as a forecast and is not an offer or solicitation to buy or sell any securities or to adopt any investment strategy.  The opinions expressed are those of the author.  Reliance upon the guidance and information in this presentation is at the sole discretion of the individual.

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