A quite important topic: Renting or buying/building? How did you decide, and what were your reasons?
Living rent-free in old age isn’t really the case even with owner-occupied property when you look closely (ongoing costs for maintenance, renovations, etc.).
Living rent-free in old age isn’t really the case even with owner-occupied property when you look closely (ongoing costs for maintenance, renovations, etc.).
In our development area, a house built in 2014 is currently being offered for rent (bungalow, 112m² (1205 sq ft), 577m² (0.14 acres) plot, and double carport). Since the house was constructed around the same time and, to my knowledge, under the same building contract, I estimate the total construction costs including the land (approx. 57,000€) to be between 280,000€ and 300,000€. The rent excluding utilities is 1,200€. The interest rate at the time the loan was taken out was probably around 2.5% to 3%.
Depending on the calculation method:
1. Pure cash flow consideration
Mortgage payment + additional costs + reserves versus rent plus additional costs
2. Accounting perspective
Depreciation + interest + reserves versus rent plus additional costs
3. Cash flow consideration without taking capital buildup into account
Interest + additional costs + reserves versus rent plus additional costs
these approaches lead to different results.
Depending on the calculation method:
1. Pure cash flow consideration
Mortgage payment + additional costs + reserves versus rent plus additional costs
2. Accounting perspective
Depreciation + interest + reserves versus rent plus additional costs
3. Cash flow consideration without taking capital buildup into account
Interest + additional costs + reserves versus rent plus additional costs
these approaches lead to different results.
chand1986 schrieb:
You need to add maintenance costs to your mortgage payments, which a landlord would otherwise cover. For example, a new heating system after 24 years is realistic. Such expenses significantly reduce the long-term profit Not really. You don’t seriously believe that a landlord who knows what they’re doing wouldn’t cover a new heating system through a small increase in rent (not utilities!). So, of course, as a tenant, I’m effectively paying for it in advance!
By the way, we don’t set aside a separate maintenance fund. We just save money as we would for an equivalent rental property. The savings just sit idly in the bank and are used when needed. No stocks, mutual funds, or other investments.
And when I calculate that I’ll have an extra $1,000 in my pocket every month once everything is paid off, spending $10,000 on a new heating system doesn’t really bother me.
@Musketier : and if that happens, it’s not a problem either
@Knallkörper : it was the same for us, we got the plot through a lottery system.
We are not building just to have cheaper housing; there are many other reasons like comfort, garden, and size.
And I believe that is the reason for most people here. If you want it that way and can afford it, why not? If you buy materials for $5000 at a hardware store, then you want it that way, not because you are forced.
@Knallkörper : it was the same for us, we got the plot through a lottery system.
We are not building just to have cheaper housing; there are many other reasons like comfort, garden, and size.
And I believe that is the reason for most people here. If you want it that way and can afford it, why not? If you buy materials for $5000 at a hardware store, then you want it that way, not because you are forced.
Evolith schrieb:
No, not really. You don’t really think that a landlord who knows what they’re doing wouldn’t cover a new heating system with a small increase in rent (not additional costs!). Of course, as a tenant, I also pay for it in advance!
.That’s true, in our newly built, first-occupancy apartment as tenants we are officially allowed to pay for the heating. They didn’t buy a new system, but rented it, so we (9 units in the building, 7 of them owner-occupied) pay extra for the heating.
And just a quick note: we pay about 1150 euros for around 80 sqm (860 sq ft) of living space including the balcony, all-inclusive…
niri09 schrieb:
That’s correct, in our newly built first-occupancy apartment, we as tenants officially have to contribute to the heating costs. Whether the heating system is purchased, rented, or leased, the landlord covers the costs. Therefore, these expenses are naturally factored in.
Evolith schrieb:
Not really. You don’t actually believe that a landlord who knows what they’re doing wouldn’t cover a new heating system through a small increase in rent (not additional costs!). So, of course, as a tenant, I also contribute to this cost in advance!
By the way, we don’t set aside anything separately for maintenance. We just save, the same way we would in an equivalent rental property. The savings just sit idle in an account and are used when needed. No stocks, funds, or other investments involved. And when I calculate that I’ll have an extra $1,000 a month in my pocket once everything is paid off, spending $10,000 on a new heating system doesn’t really bother me.Still, you will have to cover maintenance costs at some point. Whether that’s all at once in 15 years or as a monthly reserve. And if a repair is needed in 6 years, you’ll have to pay for it then as well. If you want to compare, do it properly and not with misleading calculations like the ones you’re making.