House or apartment - Which to buy in Germany?

ok guys, what would you do in this situation? you have approximately 280000 euros own capital, a net income of 4500-4600, a wife who doesn't yet work and 2 small kids. you plan to remain in germany for the foreseeable future. so would you buy a smallish (110 - 120 sq. m) apartment foir roughly 350000 or would you go up to maybe 550000 to get a nice house somewhere. i say house, but hubby says apartment. what would you do and why?

I'd get an apartment in the city. The kids will appreciate it more when they hit 10 or so, and there are parks in the city if you want them to have fun in the green areas. Plus it'll be worth more to sell it later, and will sell easier.

I'd say get a house with garden further out but within reasonable travelling distance to the city centre.

Young kids are not made to be couped up into a small (ish) apartment. A garden allows them space to explore and pent their energies in a safe enviroment without having to leave the house.

Plus, a growing family needs space, a guest room for visitors is great, a place to put bikes, skis, tools etc.

You seem to have enough money to cover the mortage and if the wife is going to work soon, then you are all set.

I disagree with the opinion that young kids need gardens but hey
I agree that space will be quite important for storing things, but most appartments have cellars anyway.

I agree with Tara on basically everything she said.

I'm looking at the moment and the house/apartment question is very much on the table.

House...

House every time.

House

try telling the house option to my husband. he thinks that it would be too tight financially - i disagree, and that we have to save for the kids blah blah blah. for me it crazy to want to live in an apartment in the city with small children. aaaaaaaaaaaaahhhhhhhhhhhhhhhhhhhhhhhhhhhh

mmm are you talking Neubau or Altbau? 350k will get you about 100-110 of Neubau in a fairly nice neighbourhood in Munich. If you want 120 for 350k, then either it is a not quite so desirable neihbourhood, or maybe an Altbau. Either way, not all that much space if you have kids. I just bought an apartment with 110 Nutzfläche and i would not like to have to share it with 2 kids, even though it has a small (and i mean small!) garden.

There are some fairly nice Reihenhäuser close to S-Bahns (Poing for example) that make the city close enough.

Having said that, if you have that much Eigenkapital, you should be able to go for a larger apartment or small house in the city.

I thought Greebo was content in the apartment?

EDIT:


I was going to say apartment, as I'm biased toward city living, but if you're the one that has to deal with two small kids during the day, I'd go house - so you can toss em outside to burn off that energy with less worry.

4 people in 110sqm? No. I live alone in 100sqm, which is slightly excessive but hey ho, and still miss my small garden flat that I had in Erlangen. Being able to feel grass under your bare feet after a crap day is a good thing.
You couldn't buy Altbau for that money in Neuhausen! Too expensive.
Don't know how small your kids are though and how willing you and your partner are to drive them about (to school, kindergarten, swimming, etc.). If your kids were a lot older then right in town might make more sense (for them seeing their pals and becoming more independent) but with small kids, living more on the edges (and Munich has lots of nice edges) will probably suit you more. Good luck whatever you choose!

too tight financially?

you have €280.000 Eigenkapital. The mortgage would be slightly less than mine, if you went for the house. Your net income is very good. It will be tight, though not unbearable. Depends what your priorities are. You obviously have the finances to be able to afford the house if you wanted it but then you may not be able to afford to do other things you enjoy, like expensive holidays and such.

In your position, i would go for the house.

real problem is (i think) that hubby is just scared to take the (big) plunge. he was raised to save save save and buying a house will use most of those savings. i think he fears waking up and discovering that he has not so much money in the back and some debt on top of it. so i have tried to explain that it won't be so bad but...
so does this budget make sense?
mortgage 2300
living (food, bills, clothes, car) 1300
saving 400
car insurance 100
other insurance 200

i know the living would be tight for the first couple of years, but it is doable, but as you factor in some (?) salary increases and me eventually working it should be ok. for those people with kids and normal salaries who have bought proprty how are you doing it?

in a discussion like this you gotta have numbers. it`s the only way to win over your husband. it was with this method that i was able to convince my bf why 5 weeks in peru was worth paying the EUR 1000 flight.
personally, i would love a house, but if the kids are at an age where you have to drive them everywhere, whre if you lived in the sticks you would have no social contact, then I`m thinking you can get a large, great apt. in town with a lawn.

I think you could compromise. A garden is very important with little kids. It just make life so much easier and nicer for all, but you could have that in a condo, for instance, as well. Best would be a groundfloor apartment with a private garden and access to a common garden as well in a place with lots of other little kids so that they have playmates right there.

@klgirl: don't forget that the running costs of a house will be considerably higher than a flat. You have to take out fire insurance by law. In a flat this is split between all owners. Things like rubbish bins etc are more expensive for a house. Do you have any close friends who live in a house? If so ask if they can run through the costs with you, to make sure you have accounted for everything.

Is your hubby German, btw? Many Germans have the attitude you have described. It is hard to argue with. They don't understand the concept of "good debt" (ie debt secure on assets verus "bad debt" (ie consumer debt). They think all debt is same.

What you spend now on a house and financing the debt will save you much more later in life, when space becomes a premium. Rents will go up, so will house prices. If you buy a small flat, you will probably have to move again in later years. The price you pay today is fixed for life (give or take a few interest rate changes in 10 years time) and interest rates are quite low at the moment.

Sorry folks but am I being dim here...?

If it was €280,000 down payment and €550,000 purchase that leaves €270,000 as a mortgage.

I thought you could get loans around 3.5% so that the "interest only" payment would be around €800 per month - whereas budget was €2,300 above???

Obviously this must include some capital repayment, and perhaps over a short period (10 years?) but if it was me with the choices then I would get an interest-only mortgage for the first couple of years...that way the debt does not increase and you get the house you need now.

In fact I have never had anything but interest only mortages in the past. Everything else is a rip-off.

if i were you i would think twice before investing in german property at the mo.
the housing market in general is vastly overpriced? surely there has to be a downturn in prices given the shithouse state of the economy, record unemployment...

you might prefer to invest it in other avenues.

280,000 euros on peter ebdon to beat steve davis at 1.4 = 392,000euros.

jobs a goodun. bigger property immediately on the horizon.

I think it depends a lot on where in the city you would be. We just bought an apartment (110qm) in the city and have a small baby. Yeah, the apartment is going to get a little small once the baby gets older, and we might have to rethink things if a second kid comes into play, but right now, we're pretty pleased with the situation. We got a ground floor apartment with a terrace and a bit of garden. The place is close to the Isar, so there is lots of green within walking distance, and the complex we live in has a playground and loads of families with little kids. However, we really have to plan how to use every little bit of space we have to the fullest.
As a kid, I lived in the city until I was 15, then my family moved out to the suburbs. Honestly, I loved growing up in the city and could never really adjust to the suburbs. But that was in a place where there was no good public transport so I went from being able to go anywhere on my own to being stuck in the big backyard with nothing to do. In the city, I was a lot more independent, and there were plenty of other kids to play with and other people's houses to hang out at. So maybe I'm a bit biased towards the city.
I'm sure the kids would love having the garden and you will enjoy knowing that they are safe in the yard, but you should also think about what you and hubby prefer too. Do you think you and he would both enjoy living outside of town?
Maybe you could go for something in between.

the downturn is minimal and short term (ie <10years). Buying a house is long term (ie >30). and rents in the city for large appartments makes buying well worth it.

if you're going for a safe bet: buy the apartment. You can always sell/rent out an apartment in munich, you cannot say the same for a house. My colleague bought a nice house in the 'burbs (just next to s-bahn), they couldn't sell it, and it was empty for over a year (loosing money every month) eventually they rented it out on a 5 year contract, which means they can't sell it for 5 years.
To be honest, I'd go for a large apartment in the city every time. There are tonnes of spielplätze and parks, plus there's loads for children to do in munich city (climbing in KPO, children's theatre and cinema, etc). The reihehäuse in the suburbs are pretty small, with gardens that are minisule.

At 280,000 to negotiate with, go for a nice house along the Ubahn lines with a relatively large garten. You can either go for landlease or land buying. With so much down, you could get great terms. You are not throwing the money away, but you are throwing money away right now every month on rent. With a house, you are paying yourself.
If you think apartments are great, go find a few that were great about 5-6 years ago and then look at them today. You become part of the collective (like the borg) in an apartment and have to deal with all the other owners about doing anything and the cost of maintenance and upkeep.
My boss bought an 100sqm apartment for 450K and I bought a 200sqm house for quite a bit less. He has no room for guests or parties and I do. He is thinking of renting an extra apartment across the street for his inlaws to come and stay awhile. I have three rooms to choose from when my father comes to visit in the spring. He has a 10sqm balcony, I have a terrace and a garden.
You do the math on which is better.

I go for a place with a yard, whether house, apartment or condo. With the kids being little, they are young enough to appreciate having a yard to do things in and won't miss being in the center of things. If they were older, like 10 and up, I would stay in the city perhaps, because then they can get out and do things in the city, the need for a sandbox very close by isn't so great.

would be v interested in finding out...how much own capital does one really need in munich to get one-s foot on the property ladder??

or can you borrow the whole amount?? whats the crack??

you will always need SOME Eigenkapital, but not always the 20% the banks like to demand. If you buy a Neubau, you can often get good terms with a lender through the building company. I had about enough EK to cover 10% of the apartment price plus the Nebenkosten.

However, the more EK you have, the lower the interest rates you get offered by the lenders. strange, really, but true.

so about 20k would be a start then?
or a nice 6timer accumulator thru the field at kempton?

15-20k start up, rest from lender of choice..for a central cardboard box??

do they weigh up your future earning potential or do they just give it out willy nilly to any old mehmet in the street?

That will not do much for you inside the city unless you get really lucky or the carboard box comes without any possible way to resale. I had way more than that and it got turned down, not by the banks, but by the City of Munich. We wrote Ude and Stoiber and got some nasty letters and phonecalls from some local politicians.
We had 8% down and the financing completely arranged. Munich said no and so I theatened them with adding two more to the brain drain in Germany and take my family and move back to the states. If it wasn't for the stress that it was putting on my wife, I would have kept up the pressure until the had relented more than they did. They dropped their initial demands and came back with a bare bones minimum of 16%.

just some more notes: if you buy an apartment you might have to invest a lot of money if the "eigentümerversammlung" decides to get new windows of repair the lift (they usually do need a lot of repair).
Any building will need repairs and will decrease in worth (either that or you would have to invest to keep up the standard). However the price for the ground will be pretty stable so that would be a reason to go for the house.

It's a good market for buying in the moment anyway,
Good luck,
kati

which is why the "Hausverwaltung" takes money off us each month and builds "Rücklagen" so that running repairs can be made without such problems.

On a related topic to these Rücklagen... we're renting and today received happy tidings that we are owed some money by our landlords because not all of the Nebenkosten we pay were required

We bought our house almost 2 months ago with around 6% down payment so we financed almost all of it. The previous owners financed 100%. The situation changes depending on how much money you make and they consider other factors like how long you've been working with your current company.

Talk to a tax or other financial adviser, or a bank. A family will either pay taxes or they pay for their own property. If you do it right you can deduct lots of those interest payments from your tax, and might be able to receive all kinds of bonuses from the government.