desdemona

We found this simple but satisfying dish “Bacon and fried eggs on pommes frites” in a mountain restaurant during skiing in the Dolomiten last New year. so I made just that tonight 😋

At their peak after the long term deflation that ended in 2010. Why must you be so bitchy? Can’t you discuss without resorting to bickery? 

Oh so the rents alone did not pay the mortgage. That makes sense.

Thats the cheapest cold I got outside Munich. No need to get your panties in a twist over the euros.    

Everybody knows about German demographics story. Politicians are discussing it everyday. Measures are taken against it (e.g. the latest one is the new immigration law to ease entry for high demand jobs such as nursing and hospitality Ausbildung). More importantly, real estate prices are driven by several factors, not only demographics. Showing a demographics snapshot from 2017 doesn’t really tell anyone anything. Here are some German residential property reports that can give better insight:   https://www.jll.de/content/dam/jll-com/documents/pdf/research/emea/germany/en/Residential-Market-Overview-JLL-Germany.pdf     https://www.dbresearch.com/PROD/RPS_EN-PROD/PROD0000000000488315/German_property_and_metropolis_market_outlook_2019.pdf

I’m doing the same. But with low yield, I don’t see the rents will pay off the property in 10 years. In our case, IRRs will be positive after 25+ years. Perhaps also because our rentals are not that small either. 

Japan 1989-2010 is a special case because:   1. Deflation. 2. Older houses are not renovated and earthquake technology is moving fast, therefore people buy houses to tear them down and build a new one with the latest technology.   If you look at the prices from 2010 onwards, the house prices rise again and at their peak in major cities at the moment.    Land value will generally not go down, unless it’s a nuclear cesspit. 

The right order if you want to buy property is buy a house to live in first, then use the spare cash to invest. So that if your investment does not provide you with the return you expect, you have at least spent your money on the roof over your head that you could theoretically keep forever. Donkey years ago, I did a comparison of the property price trend against stocks and bonds, and the conclusion was the property and stocks/bonds trends are very similar. That means you don't necessarily diversify when you put your money in properties and stocks. If you want diversification, you better off choosing between property or stocks, then as a hedge against market contractions, some commodities ETF (or perhaps even real gold, haven't tried this before since I'm not interested). Given the low yield environment in Germany, stocks seem to make sense for many people. I always dread the market risk, though, that can cause you to lose your initial investment. With property, despite low yield and long holding time (probably a lifetime...) the value of the land will not decrease, and if it's located in the city, rest assured you would at least recoup your initial investment. If the property is located in the country though, that's more risky as the trend until 2050 is that people moving to the cities and leaving the country. You might not even be able to sell the house at cost.  Back to the OP, if you sell it after 10 years, your minimum asking price should cover original price + side costs from buying + mortgage interests + maintenance costs in 10 years. I can't tell the trend in 10 years, maybe the bubble will burst by then, but as I wrote before, at worst is the rise in property price will decrease, which means slower price growth, or stagnant prices. Property prices in the cities will not go down. What costs 700K now will not halve its price in 10 years, at worse it'll stay at 700K.

From a BAMF (immigration ministry) paper that I ever since lost in internet, I read that for a couple, the minimum living cost requirement excluding rent is €730/month. Each kid under 6 is €236/month. On top of that is the rent that would be about 95-100 sqm for four person family, which in and around Munich could be about €1200/month. So you're looking at 1200 + 730 + (2*236) = 2402 minimum net salary to get the family reunification visa approved. Personally to me that's very low, I think that's not a good job offer.

Not even calculating the IRR, this looks like a losing investment purely betting on the multiple increase in the property price. If the inflation rises in the upcoming years, interest rate rises, the rise in property price will at least remain stagnant or decrease. I think it’s too late in the bubble now to start betting. Germany has a budget surplus of 13,5 billion last year, the third in five years, i think they’ll raise interest rate soon.   but who cares what I think, right  go get your investment!   PS: I forgot to add that given the low property yield here, the IRR will be positive after you hold the property for about 30 years. That’s excluding the possibility of sale, of course. If you can sell it at cost, then the IRR will be positive in whatever number of years you hold the property. I’m talking very roughly without any calculations here.

Glad for the somewhat happy ending of this story. Cunha, you're still young, now is the time for you to make stupid mistakes, let this be your lesson and then you move on. Please contact the local Tafel if you need food. One wouldn't starve in Germany; you just need to know where to look. There are charities everywhere that organise food for those who need it. Ask your school's admin staff, they'd know it for sure. Especially now in the Advent and Christmas season, plenty of charities organise events to donate food. All the best for you going forward!

Was in a job interview... but it’s probably a blessing. Would have been hell to work under a boss that belittle me.  

Even after all these years, I was still told that I’m “not good enough”...