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

Of course, paying off and maintaining a single-family house is more expensive than simply renting it. It has to be that way. The tenant only pays for the use, while the owner, on one hand, builds up equity—often a significant amount—and on the other hand, rent payments stop upon death, whereas mortgage payments end after the repayment period. After that, owning a home is clearly cheaper than renting, plus there is the added value of the property.

Musketier schrieb:
Still, you will have to cover maintenance costs at some point. Whether all at once after 15 years or as a monthly reserve. And if repairs are needed after 6 years, you will have to pay for them as well.
If you want to compare, do it properly and not with such misleading calculations as you are currently doing.

Of course I cover them. Who else would? The point was that I don’t have maintenance costs included in rent. But I do—just hidden in another form.
For our house, we pay principal + additional costs + estimated maintenance. For a rental property, we would pay rent (including estimated maintenance) + additional costs. If the landlord is a good person, it comes out roughly the same. Since most landlords don’t just give money away, I would probably pay more for a rental than for my own property.
But yes, that’s just speculation.

To come back to the question: For me, owning a home makes financial sense only once it is fully paid off and I basically have my “solid savings” in reserve. You can see it as a forced savings plan. I would boldly claim that most renters will never manage to save enough for a home within their intended repayment period (or at least not a significant part of it).

HilfeHilfe schrieb:
Yes, but stocks and funds don’t only move in one direction—you have to actively manage them, which not everyone wants or can do. A house can lose value over time. So what? Just keep living in it.

Yes, of course. But that is volatility, not risk. It certainly doesn’t hurt to check occasionally what’s going on. However, if you invest your money in a broadly diversified index fund, you won’t make a mistake over a suitable investment period, and you don’t even need to look at it. If you want to take out regular income, you choose a distributing fund. If you don’t need that and don’t want to worry about reinvesting dividends, you pick an accumulating fund. Contrary to popular belief in Germany, stocks and equity funds are not inherently bad.

Evolith schrieb:
Of course I pay them. Who else would?! The point was that I don’t have maintenance costs with renting. But I do! Just hidden in a different form.

OK, then I misunderstood you, and you probably misunderstood Chand1986 as well. Their point was that you, as a homeowner, have to consider maintenance costs to compare your expenses with rent, where the landlord and indirectly you also cover maintenance.

We also want to finish as soon as possible so that we can start saving something for retirement from age 50 onwards.

Hausbauer1 schrieb:
Yes, of course. But that is volatility, not risk. It certainly doesn’t hurt to check from time to time what’s going on. However, if you invest your money in a broadly diversified index fund with a suitable investment horizon, you won’t make a mistake and don’t even need to keep watching. Those who want regular income choose distributing funds. Those who don’t need that and prefer not to worry about reinvesting take accumulating funds. Stocks and equity funds are not the devil, contrary to common belief in Germany.

If you have a long investment horizon AND don’t need the money immediately, I’m with you. But you also have to be willing to keep investing to perhaps take advantage of market lows. Those who invest in stocks, mutual funds, or ETFs usually use extra money they can afford to lose, and a loss or price risk doesn’t hurt them, plus they have the means to buy more. I invested for years, was too risk-seeking, trading options and so on. I wasn’t very successful and was eventually banned from doing so. Now we own property, have full savings accounts, and I have calmer nerves. Never again watching the Nikkei or Dow. Back to the topic: newly built apartments with excessive rents go to well-off retirees (Alfred), people over 50 who sold their houses, or young financially secure couples. Never to well-earning couples with children.

I took the liberty of looking for rental properties in our immediate neighborhood.

Apartment
New building from 2017, 102 sqm (1100 sq ft), 3 rooms, south-facing balcony (sea view would be from the east-facing balcony) 890 € cold rent

Semi-detached house
New building from 2018, 144 sqm (1550 sq ft), 5 rooms (new development area, nearby main railway line – but barely audible, we often go for walks there) 1099 € cold rent

We have
A detached house, moved in 2016, approx. 130 sqm (1400 sq ft), 5 rooms, sea view to the east, water 100 m (330 feet) away.
Significantly under 1000 € mortgage payment including additional costs, with the goal of being debt-free in 20 years

So yes, for us building was cheaper than renting. I’d rather spend my money on a marten guard for the downpipe than on winter maintenance provided by the landlord.

P.S. There was no lottery system here; the municipal development company said, “first come, first served.”