Assessment of Income/Assets for Real Estate Acquisition

[*
Stocks/Funds: EUR 1,000
[*]Cash: EUR 1,650 (from 10/2019: EUR 2,500)
[*]Total savings: EUR 2,650 (from 10/2019: EUR 3,350)





[*]Questions:
[LIST]
[*]Up to what amount would you recommend a real estate financing, considering our age (40y/36y)? The property should be debt-free at the latest upon retirement (preferably already by 58y).
[*]Would it be more advantageous
[LIST]
[*]to buy now with possibly low equity input or
[*]to save additional cash for 2-3 years to get about 80% financing, and then buy?

[/LIST]
[..]

The price is the exciting question. According to current listings, we would quickly move upwards of EUR 750k here in the area. Mind you, for existing properties.

Your breakdown of expenses is commendable but will probably not be complete, as there are still quite a few items missing that add up, such as non-everyday consumption (e.g., electronics) or smaller items like cleaning, GEZ, Amazon, Netflix, Spotify, gifts (for her, children’s birthdays of the kids and friends, etc.) and so on.

What have you been able to save monthly in the last 3 months?

I’m only asking because expenses are being pushed up despite above-average income by items like cleaning lady and school fees. Whether this is necessary or not doesn’t matter for now.

I’m deliberately focusing on the savings rate because you asked if it makes sense to save equity for 2-3 years and then only buy property. Honestly, I don’t think it’s advisable to wait longer in the FFM area because;

- Your savings rate for the salary is abysmal (we saved more with less income and didn’t live badly)
- Real estate prices in metropolitan areas are rising so sharply right now that in the end it will probably be a zero-sum game.

In the other forum you said you want to be done after 18 years (or someone put that idea on you). You’ve read yourself that you have no way to afford such a rate.

For my part, I believe you won’t get around selling at least one property in advance to be debt-free before retirement (assuming that’s the goal) with an estimated loan of €750k.

You say you like existing properties in the range of €750k, which means in Hesse at least another €60k in property transfer tax, notary/land registry on top. Also, existing properties are mostly brokered by an agent. The commission in Hesse is another 6% of the purchase price! Worst case would be €105k in incidental purchase costs.

And that means a loan from €850k upwards or a property under €600k.

From my point of view, quite a few things don’t add up for acquiring a property of €750k+, because what I read here rather sounds like you don’t want to sell your stocks or properties but rather keep saving or go in with less equity and that simply doesn’t fit the amount and the savings rate, with the wish to be done at 58.

But that doesn’t mean you won’t get a loan in that amount, since your actual expenses will probably not be visible at that level on the bank statements (which will be required).

The savings rate is more precisely: 2650€ + 950€ = 3600€ This is certainly more than 90% of the savings rates I have read here so far. Also, the OP did not say that he absolutely wants to be finished by 58 but at the latest before retirement. If the wife (in an emergency) goes back to full-time work, the two of them will certainly bring home well over 10k. With that, they can afford a nice house even in a good area of Frankfurt. : Given your conditions, I wouldn’t hesitate for a second, even though it will surely not be easy for you to pay the Frankfurt moon prices for decent real estate.

Where do the additional €950 come from again?

You already get something for €1,450. €750k and €1,650 for 20 years still results in a residual debt of €565k, but that's a full financing. Just as a feeling