Let’s Start a HouseFIRE!

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You already know about FIRE (Financial Independence, Retiring Early). Heck, you might even know about LeanFIRE and FatFIRE — retiring with the expectation of spending <$40,000/year or >$100,000/year, respectively. You probably even know about CoastFIRE! Well, allow me to add more fuel to the FIRE! This post is all about “HouseFIRE”, and why you should care.

So what is HouseFIRE? Simply defined, it’s the stage you reach when you can retire from work just by utilizing your available real estate for money. That link has loads of tips, but if you’re a Vancouverite, you might have to get more extreme. Since I wrote this post, Vancouver’s average rent for a 2-bedroom unit has ballooned to $3,130, and landing even 1,000 square feet for that is near impossible! If you want to attempt HouseFIRE, you’ll need actual space. For that to happen, high-cost-of-living areas won’t work great, but nearby neighbourhoods might. You may find yourself with lots of space for the same housing cost just one town over! Here’s how I do it.

My $170,000 99-year leasehold is paid off, and it’s mere minutes from Vancouver. I have it until 2087, and the total from strata fees and property taxes amounts to $650/month (which I know is high). It’s a 3-bedroom condo, but one bedroom is currently an office for my photography business. I have the master bedroom, and a roommate lives in the remaining room. His rent covers the $650 I mentioned. My plan now is to relocate my office to our underutilized living room, and I’m turning the old office back into a bedroom I can rent out. When that’s finalized in March, I’ll be collecting $600/month on both rooms for $1,200 total. My strata obligations will most likely be near $700 by then, but I’m still looking at $500+ in profit! If I could live like “A” did, I’d be HouseFIREd! (“A” was living on $700/month, and paying $200 for rent. $500 for her other expenses covered it all!)

There are even people in my family who could be HouseFIREd. Mom, for instance, lives alone in a 4-bedroom townhome. If she took the master room for herself and rented the other three rooms to students, that could mean $1,800/month! If they chip in for utilities, that reduces her expenses even more! I think $1,800/month is perfect to live on. That’s about in line with what I spend now!

This is a great strategy for empty nesters. Instead of downsizing, they can maintain the value in their appreciating property, and have a source of extra income. Instead of thinking about retirement in just dollars, consider HouseFIRE! Can you retire on square footage alone? I bet some of you already can. Do it.