How FireLotse handles real estate
Real estate
FireLotse deliberately treats real estate differently from liquid assets such as ETFs or instant-access savings. The reason: the FIRE calculator withdraws a percentage (e.g. 4%) of your wealth each year to fund your living costs. With a property that is not possible – you cannot simply sell 4% of your house and live on it.
Instead, you benefit from real estate through ongoing cash flows: rental income lowers your withdrawal need, running costs are taken into account as FIRE-relevant expenses.
Rule of thumb: a property is like a cow. You can milk it (keep it and collect the cash flows) OR slaughter it (sell it and increase your FIRE capital) – never both at the same time. FireLotse models keeping it. If you plan a sale, you need to move the proceeds into your liquid wealth manually.
Owner-occupied property:You live rent-free – your housing costs are already part of your living costs. The running costs (service charges, property tax etc.) are taken into account as a FIRE-relevant expense in your retirement budget.
Rented-out property:The net cold rent flows into your cash flow as passive income without capital drawdown. In the retirement calculation it is collected in the section "Investment income (without capital drawdown)" and deducted from your withdrawal need – you need to withdraw less from your portfolio. For tax purposes, however, rental income is not investment income but income from letting and leasing (§21 EStG) – the UI term refers to the FIRE logic here, not to the type of tax.
Why not part of wealth?Unlike an ETF, you cannot sell part of a property to live on. The "market value" only exists on paper until you actually sell. FireLotse still shows you the property value – but separately from your FIRE-relevant, liquid wealth.
