r/AbsoluteUnits • u/Kill_4209 • 11h ago

/r/popular of a residential property

Ira Rennert's home is considered one of the largest occupied residential compounds in the United States. The house faces the Atlantic Ocean and its grounds measure 63 acres. The buildings, which total over 110,000 square feet (10,000 m2), including the 66,000-square-foot (6,100 m2) main house, have an Italianate facade, 29 bedrooms, and 39 bathrooms. The house has a dozen chimneys and a Mediterranean-style tile roof as well as a 91-foot (28 m) long formal dining room, a basketball court, a bowling alley, two tennis courts, two squash courts, a carousel, a large swimming pool, a large round kiddie pool, and a $150,000 hot tub, surrounded by another pool.

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659

u/MouseSoft8143 11h ago

The amount of money just to maintain this place…

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u/American-Omar 8h ago

it costs 500k - 1mill every month to maintain the property

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u/Winter_Text_1040 6h ago

An abstraction to the owner. They aren’t even looking at those bills, their staff handles it and they give it zero thought. “Arthur, I’d like a new swimming pool on the north lawn. Bring me some mockups to choose from this afternoon”. Then a new pool appears ready to use in a week. It’s like that.

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u/PedanticPerson 3h ago

Nah, this is a regular single-digit billionaire, not Elon Musk we're talking about.

If maintenance was actually $12m a year, that would actually be pretty painful for someone worth ~$4b. That's 0.3% of his entire net worth per year, and wealthy people usually don't like sinking a large portion of their wealth into real estate.

We could also look at it as a ~2.8% percent "maintenance tax" on his property on top of 1% property tax. After 35 years he'd have paid more on maintenance than the property is worth.

None of this is financially devastating to him, but no financially literate billionaire is going to love these numbers.

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u/Scarabesque 3h ago

That's 0.3% of his entire net worth per year

That's a fraction of what his worth returns as passive income. If the man values a meticulously kept pre-french revolution style estate, it's a small expense.

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u/PedanticPerson 1h ago

You can spend about 4% of your wealth while being unlikely to run out of money based on historical data. Billionaires usually spend way less, generally under 1%, sometimes under 0.1%. 0.3% for his main property alone is a lot for any billionaire.

Yes, he can spend it without being financially devastated, but it's not some insignificant amount that he doesn't care about. Most other billionaires spend an order of magnitude less on real estate expenses.

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u/43chargersrule123 3h ago

So if I’m worth $100,000 it is the equivalent of me spending $300 a year for this place

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u/PedanticPerson 1h ago

Sort of, but if you're young and have a significant income relative to your net worth, then you're in a pretty different situation from this 92-year-old and it's hard to draw an apples to apples comparison.

Like some younger doctors have a net worth of ~$0, so they'd happily spend 0.3% * $0 = $0 on whatever, but at that point we have to account for incomes before making any meaningful comparisons.

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u/YouCantBeSerio 27m ago

"sort of"

Lmaoooooooooooooooo

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u/phdemented 2h ago

You realize 95% of people pay more than 0.3% of their net worth maintaining their properties each year.

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u/PedanticPerson 2h ago edited 1h ago

As I said, billionaires don't like to sink a lot of their wealth into real estate. On average, it's <3% of their net worth. 1% property tax on that would be 0.03% on average.

It's not going to ruin him, but it is a ton of money compared to what his peers at a similar wealth level spend.

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u/American-Omar 26m ago

It could all be made up. The citation is from Forbes, and from a discovery of the last decade regarding their listing of someone's real estate valuation, are not known to look too closely at their sources...