ᐅ Is Buying a House a Wise Decision in the Current Market Situation?

Mitleser123 schrieb:

My condolences to the new residents.

Have you had any direct experience with this, or are you just speaking cluelessly from a self-righteous standpoint?

Jean-Marc schrieb:

Cultural differences and limited space are not the most fortunate combination, to put it mildly....

Whatever that is supposed to mean... In the townhouse community where we lived until 2019, around 50 homes were occupied by over 15 nationalities from 5 continents and 4 religions, including families with many children and without children, people in various jobs or retired, and with diverse interests in hobbies and social activities. The coexistence worked very well and was mostly stress-free during the nearly 18 years we lived there. What is going on in your area? Have the "older generation" become so inflexible?

In our townhouse community, there is a family originally from West Asia with four children (all boys). They are completely unruly and disrupt the neighborhood, including their kids.

Then there is a row where three families (cousins or brothers) live next to each other. In the summer, the whole clan, sometimes more than 20 people, gather on the terrace, smoking hookah and cigarettes, grilling lamb, creating thick clouds of smoke, and having loud discussions late into the night. If you live right next door and need your young child to sleep, and the window must be open in the height of summer to cool the room, you probably wouldn’t find the noise and smoke very relaxing—I am absolutely certain of that!

And two rows over, there are two families from East Asia, who are much more compatible in their social habits with those whose ancestors have lived here for generations...

Please, no socio-political debates .. 🙂

Thanks for the many comments, I will try to briefly summarize and answer some questions:

- We currently live in an apartment of about 125sqm (1,345 sq ft) on one level, which is very bright, so a mid-terrace house has never really been an option (until now).
- Comparing properties in our preferred locations is difficult; I would say that anything under 500,000 (currency) is hardly available (whether apartment, terraced house, detached house, etc.).
- No, the house is not in Munich; it is in Osnabrück.
- The house was probably built around 1970 (+/-).
- The garden is not accessible from outside, only through the house.

Of course, we have already considered buying it and not living there forever. But including all costs and renovations, we are looking at about 550,000 (currency). I don’t think we will get close to that money back in, say, 10 to 15 years. Honestly, why would anyone spend that much on a terraced house (whether end-terrace or mid-terrace)...

In your original post, it was mentioned that you probably don't expect to stay in your current apartment forever.

So what is the alternative—would you rent a similar apartment again? And if yes, at what price by then? Do you currently have special conditions because you're a long-term tenant and haven't had a proper increase for a while, meaning a new rental at market rates would be much more expensive?

At the moment, rents on Immowelt in Osnabrück are around 8 to 10 euros per square meter (0.74 to 0.93 per square foot).

So 1,000 to 1,200 euros (about 1,000 to 1,200 USD) cold rent is a current market price for you.

Regarding the topic of "getting your money back in 15 years": assume you pay 500,000 euros (around 500,000 USD) including renovations, financed by a loan, with equity for additional costs and as a cash reserve during renovation. This is not a recommended approach for financial planning but rather for a better "moral understanding":

In 15 years, you should roughly have paid off the additional costs plus at least half of your loan. So you would own about 250,000 euros (about 250,000 USD) worth of the house.

If you can at least sell the place for these 250,000 euros (i.e., after a purchase price of 500,000 euros in 2020, you sell it for 250,000 euros), you break even. The same applies with the rental apartment—1,200 euros cold rent * 15 years is at least 250,000 euros, which really is gone—you have lived there in both cases.

The point is: if, after 15 years, you can get more than 250,000 euros for the house, that is your profit—tax-free. You don’t have to fear eviction due to owner’s use, no rent increases, and you can renovate the interior however you want without landlord approval. And if you haven't had a garden so far, you will have had one all along.

PS: What is your issue with the garden? Do you currently have one at all, which can be accessed from outside? Do you even have a garage now? Why would you miss these in the townhouse?

Scout schrieb:

In your original post, you mentioned that you probably don’t expect to stay in your current apartment forever.

So what is the alternative—would you consider renting a similar apartment again? And if so, at what price would that be by then? Do you currently benefit from special conditions as long-term tenants, with no significant rent increase for a long time, meaning that a new lease at market level would be much more expensive?

Right now, on Immowelt, the asking rents in Osnabrück are around 8 to 10 euros per square meter (approximately 0.74 to 0.93 USD per square foot).

So a net rent of 1000 to 1200 euros (about 1100 to 1300 USD) is the current market price for you.

Our situation is that, as I mentioned at the beginning, we live relatively cheaply and very comfortably. The current landlord will not increase the rent. “Immowelt around 8 to 10 euros per square meter” applies to Osnabrück, but not for 4-room apartments larger than 100 square meters (about 1076 square feet) in good locations; there, the net rent is more likely between 1300 and 1600 euros (around 1430 to 1760 USD).