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

@Egon12

Look, this is a simplistic calculation. You already noticed the issue with the extra repayments.

You also can’t ignore the equity.

So you end up with a 1,300 monthly payment plus 70,000 in equity (just an estimate), which first has to be tied up outside of more profitable investments, plus reserves for maintenance, plus other costs.

Does this really compare fairly to rent for similar properties when you calculate honestly? Usually not.

That’s why buying a house only makes purely economic sense for people who lack the discipline to save without a loan contract.

A house only really serves as retirement provision in one case: when it’s built to be age-appropriate with enough equity so that by retirement it’s debt-free and still has several years before major maintenance is needed.

But if you finance over 20 to 30 years, you’re buying a luxury item, not retirement security. That’s fine, as long as you’re upfront about it.

Hausbauer1 schrieb:

The question is whether you’re better off investing the savings.

But that’s something each person has to decide for themselves. You can’t just say, “Hey, there’s product X on the stock market with great returns, so building a house is never worthwhile.”

I’m the kind of person who wouldn’t invest in stocks or similar anymore (even though I made good money with them back in my student days). That kind of investment just isn’t for me. I would basically just stash my money under the mattress.

And let’s be honest: very few people are disciplined enough to save up 200,000 or more in equity. For most, reaching around 50,000 is already a comfortable buffer, and then they start spending their money.

In our case, we would save 350,000 in 26 years. I could never manage that, and I’m already very frugal.

So when someone asks whether building or renting is more worthwhile, we’d have to say: “That depends on you...”

Ultimately, though, most homeowners will answer honestly to this question that it’s because they wanted to build or buy. For them, investing money is secondary. What matters more is the feeling of paying “for yourself” now — having something of your own.

Hausbauer1 schrieb:
Rents are rising. But the costs of owning property are increasing even faster.

If you own your home, rising rents and/or construction costs don’t affect you. With smart financing that includes a slight interest rate premium (I’m risk-averse after the stock market crash), you have peace of mind for 20 years and a stable monthly payment in the form of an annuity.

Evolith schrieb:
But this is a decision everyone has to make for themselves. You can’t just say, “Hey, Product X on the stock market offers great returns, so building a house is never worthwhile.”
I’m the type of person who wouldn’t invest in stocks or similar anymore (even though I made good money with them during my studies). That kind of investment just isn’t for me. I’d rather keep my money under the mattress.
And let’s be honest: very few people are disciplined enough to save up 200,000 or more in equity. Most feel comfortable with 50,000 and then start spending their money.
In our case, we’re saving 350,000 over 26 years. I could never manage that, even though I’m quite frugal.

So if someone asks whether it’s better to build or rent, the answer has to be “It depends on your situation...”

Ultimately, though, almost every homeowner, if they’re honest, will say they built or bought because they wanted to. For them, investment returns are secondary. What matters more is the feeling of paying “for yourself,” of owning something.

Correct, and as I explained, Germans generally don’t like investing. Investing takes time and patience, and very few have those.

The typical German prefers daily or fixed-term savings accounts, followed by a home savings contract (Bausparvertrag).

Alternatively, property ownership, and the stock market comes way, way last.

HilfeHilfe schrieb:
Correct, and as I explained, Germans generally aren’t interested in investing. Investing takes time and patience, and most of them have very little of either.

Well. The high-risk sector does that. A fund usually does not. Set up a savings plan, forget about it, remind yourself once or twice a year to check it. Done.

Questions like these can only lead to endless debates.

In short: Everyone should decide for themselves (and calculate) what is best for them and what they can afford, whether it’s building, buying, or renting.