ᐅ Renting a house or buying/building one? How did you decide?

ypg schrieb:
A terrace brings more quality of life with lower costs than a 3-room apartment

Never never never ever... I will argue this with you until the end. Rent can never be that high! At the end of your life, as a homeowner, you will have spent more money than a tenant.

Steffen, that's correct. You just didn't list it as an expense. Rent is an expense, buying a house is an investment.

There have been numerous studies over the years that consistently reach the same conclusion: Building wealth through property ownership works better than for economic agents without real estate assets. To me personally, this is not a mystery, at least not here in the metropolitan area. Just looking at the increase in land reference values over recent years: double-digit returns are otherwise only seen with high-risk investments. Of course, sideways movement will occur at times, but land remains a scarce resource, and thus the law of supply and demand sends a clear message.

Additionally, those who secured their financing up to 1.5 years ago are, even with longer terms, still below the inflation rate. This means that measured by real wealth development, you can wake up every morning with a permanent grin... Definitely better than zero interest on saved capital, right?

Traumfaenger schrieb:
There have been numerous studies over the years that consistently reach the same conclusion: Wealth accumulation for property owners works better than for economic agents without real estate ownership. For me personally, this is not a mystery, at least not here in the metropolitan area. Just looking at the increase in official land values over the past years: double-digit returns are otherwise only found in high-risk investments. Of course, sideways movement will occur at times, but land remains a scarce resource, and therefore, the law of supply and demand speaks clearly.

Sorry, but you have misunderstood that. The better wealth accumulation of property owners is because they are, in a way, forced into financial discipline (a kind of self-commitment). Most people do not usually have this discipline. I know quite a few personally: people with very decent incomes who barely manage to save an emergency fund equivalent to three months’ salary.

If you have the necessary discipline, financially speaking, you are actually better off as a renter. I know quite a few people with significant rental property holdings who themselves live in affordable rental housing.

From my point of view, an owner-occupied property is not an investment, but a luxury good. I do not afford it because of financial advantages but because of the benefits in quality of life.

Steffen80 schrieb:
Never ever... I will argue this with you until the end. No rent can be that high! By the end of your life, you will have spent more money on ownership than a tenant would.

For me, investing money is not really important. I calculate based on what I have available or need to spend monthly.
I have owned property for 20 years: in the end, I paid 660 € per month (about $700) for the townhouse, then sold it.
Now we pay less than 1000 € per month (about $1,060) for the same level of comfort.
And I’m happy to show you a screenshot of an apartment that offers almost the same, in the same location; it should be possible to find it with the price on Immonet.

Hausbauer1 schrieb:
From my perspective, a property used by the owner is not an investment, but a luxury item. I afford it not because of financial benefits, but due to the advantages in quality of life.

I agree with you; if you focus solely on costs and returns, an owner-occupied property is not a good investment compared to a rental building. However, perhaps precisely because of the self-discipline you mentioned, it can be a good way to save money.

Just last or the weekend before, there was a major report in Süddeutsche or ZEIT explaining why today’s generation, despite well-paid jobs, struggles to accumulate wealth compared to their parents’ generation. This is certainly due to high social contributions and a later career start, but also significantly because of high consumer spending on cars, clothes, vacations, food, and more. The previous generation saved on these expenses in favor of building wealth.

Personally, I see it this way: even an owner-occupied property in a growth region is better, for me, than spending money only on consumption. And you don’t have to live in it forever. Once the children have left home, selling the property can provide a solid capital base for a rental property and retirement planning.