House prices in Germany

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All these calculations showing that renting is cheaper than buying seem to forget that after 20 years or so you actually own something worth a lot of money.

 

If you rent you own fuck all

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"But yes, there is always a chance of having to sell in a recession and make a loss."

 

And there's always the risk that you might not be able to keep up payments and lose the house - and all the money you paid into it, too.

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I think buying works for those too thick or perhaps too lazy to invest otherwise. Perhaps it's also for people looking for a 'sentimental' investment.

 

I fall into all of these categories personally. Paying a mortage each month is one way to assure that my meager earnings don't wind up down the drain. Additionally, I have a little security (if my kids get loud no landlord can threaten me) plus I can paint the bloody walls something besides white.

 

There are ways to make more of my money but this way I plod along and have a little place to hang my hat. An investment I use everyday.

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Well, my aunt in Berlin bought a flat that she could use if her parents died and she had to move out of their flat. AT the time, the flats in the buildings were only for civil servants and my grand-dad was the one working for them. He died in 1987 and my gran, being his spouse, was allowed to live on in the flat. And hence my aunt, too. (She never actually lived in her own flat. She would spend about one night a week there, checking that everything was okay.)

 

By the time my gran died two years ago, the rules had changed. My aunt was going to move out so bought a flat in the same building as her one and only friend, directly above her in fact. Then she found she couldn't leave the old flat. So she sold her first flat - for not much more than she'd paid for it 30 to 40 years before. And the new flat took longer to sell, even though she had installed brand-new double-glazed windows. Potential buyers did not want to pay any more for the flat than she had paid for it.

 

However, she showed me all her investments a couple of years ago - before the flats were sold/bought. She has at least 200,000 euros in the bank and three pensions. All this on less income than me.

 

So... I don't think you need to have property to make a profit from one's income. Money management comes into it.

 

 

 

(PS. My Oma died at the age of 100.5 two years ago. A woman who had left school at 14, gone into service and hadn't done paid work since the age of 29 or 30. Two children, no house, no garden, just put one hot meal on the table every day. No income of her own. No property. Still died with EUR 144,000 in the bank.)

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I think buying works for those too thick or perhaps too lazy to invest otherwise.

 

That's a pretty stupid generalisation. What about those for whom purchasing makes excellent financial sense?

 

For example, I bought my house in Ireland with a very small mortgage that I paid off about 2 years later. I then sold the house a further 3 years later after it had been rented out for all 5 years (for the first 2 the rental income less tax covered the mortgage payments) and got a little more than double what I had paid for it.

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It seems from what the finanace gurus are writing in this forum is that unless you have the dosh to avoid taking out a mortage altogether (or you can pay it off in 2 years, as above) you're better off looking at other investments to enhance your financial situation. That's what I was referring to. I aimed the observation at myself specifically because I wouldn't feel confident investing in the stock market and property which I live in and don't rent out holds an additional psychological value for me.

 

It turns out my apt. was sold w/o an agent (no fees), and is a turn of the century fixer upper (which we renovated) in a neighborhood where property values have gone up 20% in the 3 years since I purchased (according to immo 24). OK, I'm not such a thicky but I just wouldn't be as disciplined investing in something else. I'd go on vacation or throw a big party or something. This way I have a monthly tithe...

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All these calculations showing that renting is cheaper than buying seem to forget that after 20 years or so you actually own something worth a lot of money.

 

If you rent you own fuck all

 

 

There you go Keydeck - an example of stupid you critised me earlier about.

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If the value of your property rises in line with the market in general then you haven't really gained anything, because unless you plan to live under a bridge then your next property will cost more as well. ovbg misunderstands this aspect as well. You don't "lose" anything when you move home and sell for less than you purchased because your next property will presumably also have lost value and therefore be cheaper to buy. In fact it's precisely during a recession that is the best time to move into a larger property.

 

 

No misunderstanding here. I rented for decades, and every cent I put in was lost. Every cent, and no matter how else you look at it, that money went only in one direction and is never to return.

 

Anything I loose on a property I own is still less than everything I lost by renting.

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"But yes, there is always a chance of having to sell in a recession and make a loss."

 

And there's always the risk that you might not be able to keep up payments and lose the house - and all the money you paid into it, too.

 

 

That is true, then I guess you are just like a renter who lost everything. The difference is, by renting, you automatically loose it all, but at least with house buying it is extremely bad luck to loose everything. I have yet to actually meet someone in that situation. But on the other hand, every one I have met in renting has never miraculously regained everything back.

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So is there a guideline to be drawn from all this like 'Buying a place to live in makes sense if your mortage payments are less than your rent would be for a similar living situation'?

 

Clearly buying property to rent is different because of tax breaks.

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No misunderstanding here. I rented for decades, and every cent I put in was lost. Every cent, and no matter how else you look at it, that money went only in one direction and is never to return.

 

But the money spent on mortgage interest repayments is also lost. Do you not see that? Renting is cheaper than buying and if you invest the difference wisely (or even just stick it in the bank) then you can purchase a property at a later stage without needing a mortgage to do so. That's the point that various people are making here and the one you don't comprehend with your closed-minded "rent is money down the drain" attitude. Buying is not automatically better than renting, as you seem to think.

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We don't know what's going to happen in the future. We lost on buying the last house we bought - it's worth less now. But we've been very happy living here. We made a profit on our previous two houses - in England and Germany. My husband bought a little flat in Hanover as he works there and it's probably gone down in value.

 

From the financial point of view, it's probably only worth buying a house in an area which you know will always be sought-after. In a thriving city - Munich, Hamburg, frankfurt, or within good commuting distance thereof.There will be a lot of surplus-to-requirememts properties coming on the market. The population is going down. But if you've got a bit of capital it's also a question of what you would do with it otherwise. Stock Market??? Theoretically good, but gives you grey hairs. Precoius metals?

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Anything I loose on a property I own is still less than everything I lost by renting.

 

 

No it's fecking not. I think we have another example of stupid here.

 

You are losing money to the bank in interest rather than losing money to your landlord in rent. When you are losing money to the bank faster than you would be to a landlord in rent, then you're better off renting right? (appreciation on the property and all other complex costs aside - I'm trying to make it easy for this guy because he seems to be having trouble understanding).

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Clearly buying property to rent is different because of tax breaks.

 

 

Wrong. It's not always a fact that you can offset mortgage payments or indeed even maintenance costs.

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Yes, but those two things do make a difference, a big one in a lot of cases.

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(PS. My Oma died at the age of 100.5 two years ago. A woman who had left school at 14, gone into service and hadn't done paid work since the age of 29 or 30. Two children, no house, no garden, just put one hot meal on the table every day. No income of her own. No property. Still died with EUR 144,000 in the bank.)

 

My old neighbor was born in 1909. He always complained about how "the government lost him money all the time with their screwy currency reforms every 30 years" and how he didn't trust banks because of that - and that "real estate doesn't secure your money either" so basically we were all getting screwed financially.

 

When he died at 98 he had about 200,000 Euro sitting hidden in various places around his flat. Cash. Most of it in 1950s and 60s DM notes.

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Back to our original poster -- the Aussie with his sites set on Braunschweig (area) -- there seem to be some very promising auctions in that area as well. They open bids for these properties at half their market value. In order to bid you need to bring a cashier's check for 10% of the market value of the property to guarantee the sale if your bid takes the day.

 

Has anyone ever picked up property at a German auction? It seems like a great option, lower price and no agent fees. You could even combine the sale with other bonuses and look for a half timbered (fachwerk) house to put on the historic register (Denkmalschutz) for further tax breaks. Sometimes the localities even provide funding to restore an historic building. I would love to hear about someone's experience with a project like this.

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It can be but it's not all that simple - I wouldn't do that without having done some very serious research and having taken very good professional advice first.

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