ᐅ Is Buying a House a Wise Decision in the Current Market Situation?
Created on: 23 Sep 2020 14:32
A
Alibert87
Good day and hello everyone,
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
Some time ago, I joined this forum to gather information and read experience reports.
I would like to get your neutral opinion on whether buying property at this time would be advisable. We currently rent in a "very good location" and would like to purchase a home here. Many properties are sold "off-market" or only available at very high prices (I’m talking well over 500,000). There is no land available for development; if there is, a property is demolished and rebuilt. I want to gather some input on whether this whole situation is crazy or if such a project is feasible.
Since we don’t have a specific property in view yet but have been monitoring the market for about 1.5 years and have already done quite a few viewings, I assume the median price for homes or condominiums that suit us would be around 600,000.
He, 33 years old, permanently employed in the public sector, net income 2,600 euros (plus 14 monthly payments plus bonus, around 5,000) – from 2021 about 3,000 net (fixed)
She, 32 years old, permanently employed part-time, 25 hours per week, net income 2,300 (plus additional payments around 2,000)
1 child (child benefit) – possibly a second child within the next 3–5 years
Married, tax class 4
Equity around 110,000 (plus 30,000 as a buffer)
Regarding equity, I have a question: Are bank conditions tiered, so that having, for example, 10,000 more in equity results in a better loan offer (how does this tiering work)?
We are really torn whether or not to take this step. It feels very surreal to spend so much money on housing.
I am grateful for any advice
Regards
N
nordanney29 Dec 2020 12:08Alibert87 schrieb:
So I’m taking out a KfW loan of 120,000 Euros (KfW 85) over 10 years, paying 1,200 Euros per month, and then I receive the 36,000 Euros? Once you have completed the measures, your loan will simply be reduced by the 36,000 Euros, thereby lowering your outstanding balance.
Alibert87 schrieb:
What does the KfW bank cover, the material costs which I prove with invoices? What if I do the roof insulation myself? N
nordanney29 Dec 2020 12:11@alibert 87:
P.S. Take a look at the KfW website. Everything is very well explained there, with FAQs, examples, and plenty of detailed information.
P.S. Take a look at the KfW website. Everything is very well explained there, with FAQs, examples, and plenty of detailed information.
A
Alibert8729 Dec 2020 12:33nordanney schrieb:
@alibert 87:
P.S. Check out the KfW website. Everything is very well explained there with FAQs, examples, and lots of detailed information.Thank you!A
Alibert8731 Mar 2022 11:25I want to reopen my "old thread" since it’s still relevant (perhaps even more so now...).
I’d like to start a discussion with those who, like us, have not found a suitable property and to hear about your plans or alternatives. Over the past three years, we have looked at many options and considered various approaches (leasehold, rent-to-own, polishing blades, sending letters, etc.). Slowly, we are running out of ideas, and a feeling is growing that our preferred locations no longer offer any chances.
What to do!?
1. Continue renting -> partly risky (termination of lease / significant rent increases) and soon a bit tight (once children are older, four rooms won’t be enough)
Regarding 1: Considering at least buying a condominium (barrier-free!) to rent out + investing more of our current equity in stocks
Dilemma with 1: If an opportunity to buy something suitable does come up, we will hardly have any equity left for financing
2. Look outside our preferred areas -> not an option for us
3. Keep hoping and waiting for something to turn up -> how long? Have you set yourselves a deadline?
Regarding 3: What should I do with the equity I have to hold back (I already feel that I have too high a percentage invested in the capital markets)?
Looking forward to your thoughts 🙂
I’d like to start a discussion with those who, like us, have not found a suitable property and to hear about your plans or alternatives. Over the past three years, we have looked at many options and considered various approaches (leasehold, rent-to-own, polishing blades, sending letters, etc.). Slowly, we are running out of ideas, and a feeling is growing that our preferred locations no longer offer any chances.
What to do!?
1. Continue renting -> partly risky (termination of lease / significant rent increases) and soon a bit tight (once children are older, four rooms won’t be enough)
Regarding 1: Considering at least buying a condominium (barrier-free!) to rent out + investing more of our current equity in stocks
Dilemma with 1: If an opportunity to buy something suitable does come up, we will hardly have any equity left for financing
2. Look outside our preferred areas -> not an option for us
3. Keep hoping and waiting for something to turn up -> how long? Have you set yourselves a deadline?
Regarding 3: What should I do with the equity I have to hold back (I already feel that I have too high a percentage invested in the capital markets)?
Looking forward to your thoughts 🙂
By now, you should have found something already. It will never be perfect.
Now it is roughly 30-40% more expensive. You would have already experienced that increase.
Back then, it was already surreal for you. Your equity should now be higher.
In prime locations, only a top income will do.
It won’t get any cheaper anytime soon. There are plenty of current threads about this as well.
Now it is roughly 30-40% more expensive. You would have already experienced that increase.
Back then, it was already surreal for you. Your equity should now be higher.
In prime locations, only a top income will do.
It won’t get any cheaper anytime soon. There are plenty of current threads about this as well.
B
Benutzer20031 Mar 2022 11:331, 2, or 3. None of these options really suit you, do they?
My advice is always to adjust your wishes to the circumstances. So, option 2.
You don’t like option 1 (equity doesn’t disappear – the cash is just converted into real estate assets. If you finance a house with the same bank, they might still take a secondary charge on the condominium). Option 3 hasn’t worked for three years already. The chances of suddenly finding something that fits your wishes now are extremely low. That leaves only option 2 – but here you are getting in your own way. So, you keep going in circles and can’t break free.
My advice is always to adjust your wishes to the circumstances. So, option 2.
You don’t like option 1 (equity doesn’t disappear – the cash is just converted into real estate assets. If you finance a house with the same bank, they might still take a secondary charge on the condominium). Option 3 hasn’t worked for three years already. The chances of suddenly finding something that fits your wishes now are extremely low. That leaves only option 2 – but here you are getting in your own way. So, you keep going in circles and can’t break free.