The TRUE Cost of Buying a Home in Germany

Рет қаралды 6,035

7 ай бұрын

Discover the REAL story behind a family's home purchase and the TRUE costs they face after buying a property worth almost 500.000€. 😱
In this revealing PerFinEx Real Estate video, we break down whether the couple made a good investment or if they paid too much for their home in Germany. Dive into the details of home ownership and find out how much their house might save or cost them over the next years.
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Пікірлер: 33

@PerFinEx 7 ай бұрын

Free meeting with us: perfinex.de/meeting

@PaulinKantue 7 ай бұрын

Thanks for the video. I'm not an expert but I also know that renovation costs can easily make a 'bargain' housing purchase an instant nightmare.

@ahl781 7 ай бұрын

What an amazing video. Seeing the actual numbers and calculations is eye opening and teaches a lot. Thank you!

@abrar4466 7 ай бұрын

thank you so much for sharing this use case.

@Zizo8182 4 ай бұрын

Thanks for sharing

@cleidsonn 7 ай бұрын

Great video, as always. As a foreigner living and working in Germany, I found it helpful, but it raised some questions: - If a family invests 316K in renovations, the total investment would be around 850K. What would be the market value of the house post-renovation? It would be a 800m2 plot (which is rare) with a renovated house featuring modern insulation, heating, solar panels, and a battery (which seems to me is not that common to find in even in newly built houses). How does this compare to the value of a newly built house of similar size and features in the same region? The time and stress involved in such a renovation should also be considered. - The idea of renting to save money is intriguing, but it could go either way. The challenge is to determine which is likely to appreciate more - the property or the investments. Investing isn’t straightforward, especially considering the variables and tax responsibilities. - The family’s monthly installments will be fixed for 10 years. If their salaries increase annually, the portion of their income dedicated to installments will decrease over time. However, rent is likely to increase. How does this factor into the equation? There is also the emotional aspect of owning a property. Raise your kids in a property with outdoor space, for example. It usually takes part in the decision process. I understand that when discussing investments, it is beneficial to be purely rational. But abstract emotional aspects are too personal to quantify. And that’s why I’m not entirely convinced that the family made a poor decision. I whish them all the best.

@piby1802 7 ай бұрын

I don’t think they made a bad deal. First of all, they don’t HAVE to do all renovations. They can just do minor cosmetic repairs and rent it out/partially rent it out. With the current rental market and with some luck, the house can easily pay itself with just rental income and tax benefits. Even if they WANT to renovate, I wouldn’t recommend it. I would demolish and rebuild a prefab/massiv house instead. I also just bought in old house in a prime location for 200.000€ with 900m2 plot. 100% financing at 10 year fixed 4.27% interest rate. 90% of the purchase price is for the land (just bodenwert without any premium). It also have energy class H and the owner is currently living in the house. I am planning to rent it out. 148 m2 at 10€/m2 with give me 1480€ cold rent which is higher than my monthly emi of 1026€. On top of that, I am gonna claim tax benefits which is cherry on the cake. I am never gonna renovate it. If I have more money, I will demolish and put up a prefab house in a prime location with 900m2 plot!

@tamil9519 7 ай бұрын

Thanks for the video. What is their reasoning for buying this house? any expectation in value increase in coming years?

@PP-gv1ew 5 ай бұрын

great informative video

@mayankkhare6502 6 ай бұрын

How was the heating working if there were no radiators ? I am curious

@mayankkhare6502 6 ай бұрын

Can you also share the approx how much were the mortgage processing charges

@vishal2131 7 ай бұрын

Do we need to declare the purpose as " investment " only if we want to put it on rent or we can also declare the purpose as " self use "?

@wreakinghavok 7 ай бұрын

tbf, the whole deal sounded weird from the very beginning: 1% principle and 100% financing is a huge red flag. I am not sure for what though. They are planning something grandiose with the 800m2 land? salary of 75k each is not that high, tbh. similar to our household, which gives you about 7k monthly... but with mom on Elterngeld it's about 5.5k for the first year. Utilities alone, will be at least €70/month, even more. If they both work in the Stuttgart, they will spend around €1000/month for the car. Second car might double the costs. After all the costs added up, living there would cost them at best slightly under 4k. Only to have a place to sleep and be mobile. Now, imagine in the next 10 years financial crisis comes and job market becomes even more unstable. I am already feeling uneasy putting myself in their situation. Any force majeure event might bleed them out. Nevertheless, that's my opinion. I might be very wrong, because I don't even understand why they took 1% principle and 100% financing. They surely have a plan and I hope they will realize it.

@_Hola_12 6 ай бұрын

what is this 1% principle?

@deesiInGermany 7 ай бұрын

Excellent video

@adammujaj 7 ай бұрын

I feel that this analysis is missing a number of aspects. Sure, it is worse monthly right now, but that might not always be the case. First, the land should appreciate in value (of course some other investment would also), and the mortgage rate will stay the same (assuming no change in interest rate). Meanwhile rent will become more expensive over time, and is forever whereas they could eventually pay it off once their salaries increase and they can increase their principal payment to something reasonable. Does it then work out better? I don't know as I haven't done the maths for this particular case, but the are definitely reasonable assumptions that can be made for rent vs. buy that do show buying to be more profitable within 10 or so years.

@Marco97190 7 ай бұрын

Brilliant!

@ahmadhuseynli2073 6 ай бұрын

Yes but youdid not axcount for rising rate of real estate. The same house theu can sell in 10 years with profitable return.

@m.b5777 2 ай бұрын

There is no profit. It is just money losing its value. If you buy something for 100 today and sell it for 200 ten years later you actually lost money if you factor in inflation. The 200 future value has less purchasing power than today's 100. Gold vastly outperforms real estate and you don't have to renovate your gold or pay property tax on it.

@LakmalHckz 3 ай бұрын

Why does Germany discourage home ownership compared to countries like the USA, Australia, and India?

@HL-uw7fk 6 ай бұрын

Basically if you buy without a lot of cash is such catastrophe and you lose much more compared to renting

@arionfar 5 ай бұрын

What exactly you get when you buy an old house in germany? Kitchen? oil burner? lighting?

@arionfar 7 ай бұрын

Instead of 2123€ you can rent for 1400€ and invest 723€ per month. Given 10% annual return after 20yrs (ETF, stocks) you will have 520K with no house! but if you got the house it would be at least 1000K with the current rate. If you correct it for inflation you make no money by investing in ETF, stocks.

@VidimusWolf 6 ай бұрын

To be fair in 20 years that house will have additional costs of ownership and living there.

@arionfar 6 ай бұрын

@@VidimusWolf if you mean maintenance, the government gives good money for renovating or building net zero houses. If you mean tax, you'll pay tax on stocks too

@VidimusWolf 6 ай бұрын

@@arionfar With taxes, it highly depends on how you invest, some pension accounts reduce tax massively. Not only are there maintenance costs on a house but a lot of other running costs, unforeseen expenses such as things breaking down, you're open to other risks as well (oh no! Random hurricane destroyed the roof/solar panel!). Additionally, houses are much harder to liquidate. Great, you have 1 million in a house. Now how do you liquidate that if nobody buys it? What if you need the money now? It's not as obvious or straightforward as you make it, otherwise everyone would do it right? The best thing is to invest in both things and get the best of both worlds honestly.

@arionfar 6 ай бұрын

@@VidimusWolf Even in a hurricane, you still own a land. Even in recession people have to rent and pay you. But stocks go down you lose money. People dont have to buy stock but they have to pay for shelter. There is not enough shelter in germany for the people coming in with all the recent benefits like chance card.

@VidimusWolf 6 ай бұрын

@@arionfar No point discussing with you. You don't care about rational discussion nor logic, if real estate is a religion that you believe in blindly while ignoring anything that might dispute it, that's your problem. Don't watch educational videos then, go join a real estate cult or something idk what to tell you. You will NEVER find a rational and level headed investor that agrees one investment medium is better than another no exceptions because that's just not the reality.