To buy a flat vs invest?

[ng1989]

@jenniwrenn I believe it's overly optimistic to look at at sustainable 13%-16% Nasdaq. But good comment nonetheless.

 

[satchboogie]

@abim305 Invest, don't buy. In the future, you might feel the urge to move somewhere else in the future. An investment portfolio is relatively easy to take with you, a flat isn't.

 

[glennheath]

@abim305 Buy the flat, you get enough support from German gov and can later renegotiate the rates (if they go down sharply). And the deal you have at hand seems like a good deal for Berlin, which as I remember is insane. Also, not sure if the stock market will really generate 7% in the next year's or will thread sideways for some time.

 

[the_creation_center]

@abim305 Sector is important for this kind of decisions, free lancer in what sector? IT? Web dev?

 

[ashleyta]

@the_creation_center Another commenter said musician

 

[rom122]

@abim305 EUR 13K per month! I would love to know what work you do, maybe it gives me some inspiration?

 

[the_creation_center]

@rom122 in what sector you do your business?

 

[19ed]

@abim305 "By year 8 the flat should hopefully be worth quite a bit more, especially considering the housing crisis in Berlin is clearly only going to get worse and worse."

Are you so sure about this?

 

[steve77777]

@abim305 You replace a rent with almost identical mortgage, you will jump that 3% annual rent indexation, just check carefully with the bank to be able to refinance /renegotiate the mortgage when the interest will go down.

Do it, if the bank is accepting you a little paydown and to keep that savings (like 30-50k for paydown) .

In 5 years if you sell, you will have quite a nice amount from there. In 5 years if you move from rental, you will have nothing.

Edit: just check carefully to not need big improvements and be in good location.

 

[justvin]

@abim305 read the book 'The Phycology of money'. the author mentions he invested it all into a down-payment for an apart and regretted it. it's better to invest it into stocks/ETFs. but in his case the mortgage interest was 1%

 

[anchorholds]

@abim305 If possible as someone else mentioned, do both. For me the metric is, if the mortgage payment is lower than rent, buy.

 

[abim305]

@anchorholds well the mortgage is the same price as my rent. But then you add building fees, utilties and insurance.....

 

[joelfix]

@abim305 House prices in Berlin will keep on increasing, you have zero fear of our Goverment building more than 10 new apartments a year

 

[zinkaz]

@abim305 It is really a personal preference in my opinion. I did not buy my apartment thinking if it is better than investing or whether the interests would rise/low. I bought it simply because I wanted to live in a home and at that time because that was the time i could afford it. It was cheaper even a month before but i did not have the money. Do you WANT to live in your own home or do you prefer flexibility of moving and living on investment?

 

[teresa4013]

@abim305 A rent free housing counts as investment!

 

[froggymom101]

@abim305 It really depends. You must use Google Spreadsheet and create a proper Rent vs. Buy calculator that applies to Germany.

Things to take into account:

• Buying costs (one-time)
• Costs of owning a house (taxes & maintenance)
• House prices increase & rent increase through the years
• Interest rates (how they affect future payments and capital)
• Possible tax returns on interest rates
• How much can you invest when rent vs how much after buying

I did the same for the Netherlands and the answer was pretty obvious. Buying a house (up to a certain sum) is much more profitable than continuing renting even if I stay there for 3-4 years. It will be even more profitable if I stay longer.

 

[adaliabay]

@abim305 flat. if you want to be on the safe side a cheap one.

next year the ecb is slashing rates like theres no tomorrow and the printing machine is still going full steam ahead (by reinvesting the coupons in everything they have).