Buy the neighboring house near the parents

Hello everyone :-)

My girlfriend (22) and I (23) have been planning since last week to buy my parents’ neighbor’s house because the man recently passed away and the woman needs the money for her care. It has 100sqm, four rooms on one floor, a disabled-accessible bathroom (newly done shortly before his death), and a full basement. The oil heating was also renewed 10 years ago. The property is 700sqm. It’s interesting because we barely have to renovate anything and it has been very well maintained. It should cost €130,000; I can pay the additional costs and renovations from my equity and will still have just under €10,000 liquid by then. Oh, and the house was built in 1970. Now about us:

I have a permanent job with a salary of €1800 net per month; sometimes it’s even more because I work in shifts, it never goes below that. She works as a saleswoman in a medical supply store, contract until next year. However, we are very confident that she will be taken on permanently since she also did her apprenticeship there. She earns €1080 net; after being taken on permanently, about €50–100 more. But we don’t know that yet.

After calculating all expenses (really everything, [GEZ], insurances that will become more expensive, insurances we still need, additional costs (€300 per month), etc.), each of us still has about €155 left over. We save €400 per month. We don’t want children; in case of illness, I’m insured if I’m sick for longer than six weeks. So I don’t have one euro less.

I just went to my house bank; in the worst case, I would pay €520 per month with a thirty-year term. That was just a rough calculation; everything was still rather vague and more like "just to see if something like this is even possible." I’m making proper appointments for next week. We pay €520 rent warm for 65sqm and three rooms. So far, I’ve been saving €500 per month.

What do you think? With houses in this price range, you usually have to invest a lot here; in addition, we have the advantage of knowing what we are buying, and my parents are immediately there if problems arise. My heart says yes, but my head thinks it’s safer to wait at least this one year until my girlfriend is permanently employed, with the risk that the house will already be gone. On the other hand, we are still very young; there will always be houses to buy. Very difficult, everything. So I’m asking for your opinion :-)

Regards, Noodles90

A bit unclear overall.

What is included in the expenses? Cold rent, warm rent, or the targeted installment and reserves?

After calculating all expenses (really everything, GEZ, insurances that are getting more expensive, insurances we still need, additional costs (€300 per month) etc.) everyone still has about €155 left. We have savings of [B]€400 per month[/B].

So far, I save €500 per month.

Hello Noddles,

I also have a problem understanding what you wrote. I don’t quite understand the points marked above.

On the one hand, you write that after all expenses, you still have €155 left per person. (I can somewhat explain this since you tried to consider future expenses.) Directly afterward, you write that you have savings of €400 per month. And a bit further down, you write that you alone can save €500 per month.

I don’t get it. Do you save €400 together or €500 alone (how much then does your girlfriend save?).

Please also post which exact expenses you considered in your calculation. With €520 warm rent – how high is the cold rent there?

Otherwise, my first tip: Even if the house makes a good impression and according to your knowledge has little repair backlog – take an expert with you for the viewing. They will see things that you as a layperson don’t recognize. They can also estimate how much it would cost you.

Oil heating renewed 10 years ago → I was once told that you have to expect to renew an oil heating every 10–12 years (but I might be wrong).

Okay, then I'll try to untangle the whole thing :-D

The cold rent is 310€, additional costs 165€, the rest is for the parking space. I alone set aside 500€, she saves 150€ per month, that is currently, so in the rental apartment.

With the house, we would both set aside a total of 400€, 250€ me and 150€ her. For better understanding, I'll just post my calculations from my salary.

Loan: 520€
Additional costs: 270€ (electricity, water, heating)
Garbage and property tax: 30€
Car loan: 160€ (2.5 years left)
Car insurance: 70€
Disability insurance, Riester and private protection (so legal protection, sickness benefits etc.): 175€
Phone and internet: 40€
Building savings contract: 50€
Household insurance: 15€
Building insurance: 25€
GEZ: 18€
Mobile phone: 10€
Fuel: 100€
Reserves: 250€
Groceries: 250€

Against this are income of at least 1800€ salary and 350€ from my girlfriend. So roughly estimated 150€. And it's the same for her, she just doesn’t have things like the loan, only things like car insurance, disability insurance, Riester, fuel and 50€ that go into an account she can't access.

Is that more understandable? Regarding the oil heating: The one from my parents has been the first since the construction, so already 20 years old. I don't know to what extent that is still normal. But I'll still keep it in the back of my mind :-)

You write you are 23/22 and you don't want children. We didn't want that at that age either. Now, 10 years later, the house is slowly getting fuller ;) Your life plan can certainly still change in this regard...

Later there will certainly be a desire to have children; the house also has enough rooms for that, so it would fit. Among the various banks, my house bank is included once, and the Allianz is also among them, which you probably meant by life insurers, right? What kind of conditions can one roughly expect given my circumstances, or what conditions did you get? That is the only thing that still worries me a bit; I don't want to fix the interest rate for only 10 years, rather as long as possible, so at least you have certainty. Or how does it work with catching interest rates, for example in the form of a building savings contract if they suddenly rise to 5% or, even worse, 6%? Sorry for so many questions, but I prefer to hear all this again from others; from the bank’s point of view, it’s never a problem anyway.