Assessment of Income/Assets for Real Estate Acquisition

But then please also add the 1450 cold rent on top, that could also flow into the annuity. So even without selling the properties, it would be

EUR 2,650 (from 10/2019: EUR 3,350)

plus

1450

conceivable, in total 4,800. Just as a maximum demand. That would make around 1 million as 100% loan feasible with 20 years as full amortization. Or proportionally, like roughly 3600 euro rate for 750,000 loan etc.

Thank you in advance for the interesting exchange!

Well, I would orient myself to your cold rent. For €1,450 you can already get something offered. 750k and €1,650 for 20 years still results in a residual debt of 565k, but that is full financing now. Just as a feeling

The €750k are by no means fixed. The amount was just thrown out there. At that price level, we would prefer existing properties. Whether and how it is actually financeable and whether we want the burden like that is another matter. That’s why my original approach was about what is possible with the given income, assets, and consumption.

Your breakdown of expenses is commendable but probably incomplete, there are still quite a few items missing that add up, like non-regular consumption (e.g. electronics) or smaller items like cleaning, GEZ, Amazon, Netflix, Spotify, gifts (you, children’s birthdays and friends, etc.) etc.

No, it is complete. This is an evaluation of all expenses from one year. Sorry, but whether there are still €5.83 missing for GEZ etc. I don’t think matters because I only want a rough estimate anyway. The various small stuff is included in the “miscellaneous” item with €370 per month. Possibly, a provision for the car could still be added here. But both are relatively new.

What have you saved per month in the last 3 months?

See above. No more, no less.

Honestly, I don’t think it’s advisable to wait longer in the FFM region 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 currently rising so sharply that it is possibly or most likely a zero-sum game in the end.

Savings rate currently: approx. 30% (€2,650 / €9,050), taking into account the cash we are currently adding to the rental properties (approx. €250) the rate would be 32%. From September then additionally €450 due to the reduction of annuities (rate then 37%).

Do you plan to sell the condo at some point? We have just finalized a financing deal and can sell our condo tax-free only after 5 years. We were able to agree on a fixed special payment of 100k in a few years, which significantly lowered our interest rate. Just an idea.

Interesting suggestion. However, a sale is not planned at the moment. We are still within the speculation period with all 3 properties.

What is the motivation for buying the house anyway?
A semi-detached house for 1450 cold rent in a good location for you is basically a mid-level jackpot.
Or is it too small / old / neighbors are annoying / no continuing education schools available?

None of the above. Our idea was actually to acquire another property for renting out to others. But the market is wiped out and the returns are poor. Therefore, we considered trying it with a property for own use, even though that would be a consumption rather than an investment decision. The emotional factor would of course compensate quite a bit.

So just out of fear of missing out on the current hype, I would NOT buy a property, on the contrary.

I completely agree.

It would still be possible with your surplus calculation, even though I can’t place the item "cash". Are you hoarding cash in a safe?

I don’t quite understand what you mean. Can you explain that again in more detail?

The savings rate is precisely:

2650€ + 950€ = 3600€

To be fair, I have to say that this is wealth building partially done by the tenants of the condo. We only pay EUR 250 monthly ourselves, i.e. I would count the EUR 250 as our own savings amount. The rest is covered by the tenants.