Relocating to Munich from Wiesbaden and the salary expectations

34 posts in this topic

16 minutes ago, swimmer said:

 

Yes I assumed that, and also noted that the poster did not seem to refer to already owning any property, or selling one if moving.   Also often harder to save large sums personally with high German tax rates.  You can also take certain things from their maths about that 2300 a month for the 850k.

 

Either they have around €300,000 in assets or they don't. If they don't, then buying a €900,000 house on €6000/month is somewhat borderline (insane). If they do, I hope they're fully invested and not lazily parked in some bank account, in which case they should really be used as security and keep generating wealth instead of sold off to pay a hypothetical house faster in an age of historically low interest rates.

 

0

Share this post


Link to post
Share on other sites
1 hour ago, mtbiking said:

 

Yep. But you can actually use your income generating stocks and properties as collateral, there's really no need to put upfront 300k€ provided you have the assets.

Sure, but then your monthly payment rises considerably, as with the final costs, due to higher bank loan.

...e isso parece uma ideia do Berardo :D ...

0

Share this post


Link to post
Share on other sites

I think you should evaluate whether you want to move to Munich, based on your future job prospect (e.g. more responsibilities,  future prospect is good  , builds on to your CV, you get to make a difference/ shape the industry,  its ur dream job etc.)

 

You have other alternatives, if you don't want to have too much financial burden.  For example:

 

1.  Rent  

 

( honestly, at the moment, in my opinion, munich is not a buyer's market. Unless you have so much $$$ and dont know what to do with it).

 

2. Buy in the suburb area or nearby towns e.g Augsburg (30 min by train) or papfaffenhofen (30 min by car) , if you want to have a bigger house with garden. 

 

3. Buy smaller property in more central munich area (property value would hold/ rise).

 

What I like about Bavaria are: 1) the landscape is amazingly beautiful  2) near the Alps - summer hiking / winter skiing 3) a short drive to Austria, italy, Slovenia, Prague etc.  4) plenty of activities to do during the weekend in the city

 

 

0

Share this post


Link to post
Share on other sites

€850,000 gets you 6 new 2-room apartments in Cyprus. You can rent 5 of them and live from the rental income :).

1

Share this post


Link to post
Share on other sites
5 hours ago, MikeMelga said:

Sure, but then your monthly payment rises considerably, as with the final costs, due to higher bank loan.

...e isso parece uma ideia do Berardo :D ...

 

oh pá that one was low 😉

 

I maintain that is not efficient to pay off a mortgage with a fixed interest rate lower than 2% per year for 20 years by selling off assets that cost money to acquire and provide you in dividends alone more than that. Yes, there’s some risk involved, but it can be stemmed by 1) having an adequate monthly income/monthly payments ratio 2)  Having a conservative net worth / total worth ratio.

 

 

0

Share this post


Link to post
Share on other sites
On 18/02/2019 à, MikeMelga said:

It is nowhere near the same amount. For a 850k€ house you probably need to put upfront 300k€ and then pay 2000€ for 30 years.

 

We just bought a place for 900k€, by putting just 115k€upfront (which covers Notar/taxes + a little bit of the actual price). We're a typical DINKY household in our mid-30's and the banks are currently very happy to lend with very little upfront cash as long as you are far enough from retirement and can demonstrate stable employment. Even with no other assets (as is our case) which can serve as collateral.

1

Share this post


Link to post
Share on other sites
On 18.2.2019, 14:38:00, MikeMelga said:

I am a very logic person, I've done the math.

 

On 18.2.2019, 16:03:40, MikeMelga said:

If you bought 10 years ago, good. Now it makes no sense. 

 

I did the Maths 10 years ago. My Maths was probably right but I was still wrong. Monthly interest payments were actually less affordable then - think 4-5% interest. Yes, prices might collapse but then again they might not. There are sound reasons to believe interest rates will stay close to zero for the next few decades, mainly not to bankrupt Southern Europe. Who knows, perhaps the ECB might even embark on an Abe-themed trip, if that happens you might want to pile up as much debt as you can. Then again, the ECB might not.

It is difficult to make predictions, especially about the future.

1

Share this post


Link to post
Share on other sites
13 hours ago, FrenchguyinMunich said:

We just bought a place for 900k€, by putting just 115k€upfront [...] Even with no other assets (as is our case) which can serve as collateral.

Hmm, you are in your mid 30s and have so far managed to save €115k. Now you are taking a gamble on an asset currently valued at €900k, at the current rate, more than you would save in your lives. If house prices drop by only 11% your life savings will be wiped out.

There is a fair chance this will work out just fine for you but I am with Mike Melga on this one, that's a gamble you can't really afford to lose.

0

Share this post


Link to post
Share on other sites

One can look at it as purely an asset or as a very nice place to live while paying rent to oneself. Sometimes home investments are just that. You really do get something for your money.

 

We have no idea what other investments the poster has or is working on.

 

Sure, it's ballsy but still....

1

Share this post


Link to post
Share on other sites
29 minutes ago, LeChamois said:

 If house prices drop by only 11% your life savings will be wiped out.

 

The purchase costs on 850k alone and set up will account for a lot of that.

 

I do agree the previous point that, for all the focus on rentals when considering property as an "investment", it is often one`s own lived in home that works out best and / or is enough.   Large mortgage also enforces discipline about both earning and saving.   I think it is, though, a hell of a sum of money to suggest someone finds, completely different scale to my generation.
 

 

1

Share this post


Link to post
Share on other sites
6 hours ago, LeChamois said:

There are sound reasons to believe interest rates will stay close to zero for the next few decades, mainly not to bankrupt Southern Europe. Who knows, perhaps the ECB might even embark on an Abe-themed trip, if that happens you might want to pile up as much debt as you can. Then again, the ECB might not.

It is difficult to make predictions, especially about the future.

Actually if ECB printed a lot of money, it would increase interest rates and that extra liquidity would also help southern europe and devalue the Euro, which would increase exports. That is not happening because of Germany's scare of hyperinflation.

So I don't believe on that reason for the taxes to remain low.

0

Share this post


Link to post
Share on other sites
8 hours ago, LeChamois said:

Hmm, you are in your mid 30s and have so far managed to save €115k. Now you are taking a gamble on an asset currently valued at €900k, at the current rate, more than you would save in your lives. If house prices drop by only 11% your life savings will be wiped out.

There is a fair chance this will work out just fine for you but I am with Mike Melga on this one, that's a gamble you can't really afford to lose.

 

Historic rate of saving is thankfully different from current rate of saving :), thank god salaries do increase with age/responsibilities, plus lifestyle changes (used to live between Paris and Munich before choosing to permanently relocate to Munich, which was creating lots of added costs). 

 

Yes it's a big bet for us, but nothing unreasonable (mortage to income ratio <30%). When buying highly leveraged, as people who don't inherit do, we are actually more sensitive to interest rates ticking up from 2% to 3% before we buy rather than prices dropping by 10% after we bought. Thus the need to lock-in now the good interest rates for 27 years.  And if in the meantime the market hits bumps on the road (which I'm sure it will), honestly we don't really care. Even if in 27 years values are down by 10% (which I highly doubt just because of simple inflation and Munich growing so fast), in the meantime we will have saved on rent and still come out on top. And now we're certain we will be living in a nice place, and we already now the cost , whereas as a renter we have no visibility on our future cost to maintain same standard of living.

 

The main gamble is the part about not losing our jobs! And that's why I wouldn't have bought half of that alone. As a couple, we spread the risk. 

 

 

 

1

Share this post


Link to post
Share on other sites

 

10 hours ago, FrenchguyinMunich said:

The main gamble is the part about not losing our jobs! And that's why I wouldn't have bought half of that alone. As a couple, we spread the risk. 

 

 

And not getting divorced. Keep her happy and satisfied. ;)

1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now