Gelbwoschdd
2019-07-09 22:42:28
- #1
Hello everyone,
since there is always the discussion about what is better for me, renting or buying/building, I have done some calculations here based on my financing example that might also be interesting for others.
For me, the decisive factor in construction financing is the factor interest+possibly closing costs+real estate transfer tax+notary. That is what the house really costs me, as these costs are not included in the actual value of the property in the event of a possible house sale. So in the end, for example, I will have paid a maximum of 30,200 euros all-in for a house+land+kitchen+outdoor facilities (600 sqm, 151 sqm living space), i.e. interest + closing costs for home savings contracts + real estate transfer tax + notary and will have no remaining debt in 12 years and thus will have paid it off. If interest rates remain low in 6-7 years, these costs will even be reduced. I have to say that we only had to finance 220k and were really lucky with the timing of the financing as well as the construction prices.
Since the value of land and house is not fixed in the future, this is the only reliable value of what living will cost us in the near future. The substance of the house will probably lose value and the value of the land will increase, but this is speculative and difficult to predict, so I calculate a value here that my property could lose in order not to be worse off than with renting.
If I now divide the above-calculated (30,200) by my term, I come to a cost of 157.29 euros per month. In addition, there are the additional costs (which I would also have similarly in a comparable rental property) and future necessary investments in renovations which I can hardly predict at the moment. I see this as my cost for living in my own house.
If I now take a comparable rental property in our region and calculate 1200 euros rent for the coming 12 and past 4 years, I would have 200,200 euros ((1200-157.29)×12×16) until the full ownership transfer to offset the depreciation as well as the renovation costs. Since I neither believe that my house will lose that much value in 16 years (new building) nor that the renovation costs should remain manageable in this time, building should definitely be worthwhile in my case. With every month living then in the paid-off house compared to the rental house, one can then add 1200 euros or more in case of rent increases to the 200,200 euros.
These are of course the pure numbers, regardless of advantages such as freedom, security of tenure,... or disadvantages such as location dependence,...
Can it be seen this way or have I missed/forgotten something crucial?
Has anyone of you done similar calculations?
Regards from Franconia
since there is always the discussion about what is better for me, renting or buying/building, I have done some calculations here based on my financing example that might also be interesting for others.
For me, the decisive factor in construction financing is the factor interest+possibly closing costs+real estate transfer tax+notary. That is what the house really costs me, as these costs are not included in the actual value of the property in the event of a possible house sale. So in the end, for example, I will have paid a maximum of 30,200 euros all-in for a house+land+kitchen+outdoor facilities (600 sqm, 151 sqm living space), i.e. interest + closing costs for home savings contracts + real estate transfer tax + notary and will have no remaining debt in 12 years and thus will have paid it off. If interest rates remain low in 6-7 years, these costs will even be reduced. I have to say that we only had to finance 220k and were really lucky with the timing of the financing as well as the construction prices.
Since the value of land and house is not fixed in the future, this is the only reliable value of what living will cost us in the near future. The substance of the house will probably lose value and the value of the land will increase, but this is speculative and difficult to predict, so I calculate a value here that my property could lose in order not to be worse off than with renting.
If I now divide the above-calculated (30,200) by my term, I come to a cost of 157.29 euros per month. In addition, there are the additional costs (which I would also have similarly in a comparable rental property) and future necessary investments in renovations which I can hardly predict at the moment. I see this as my cost for living in my own house.
If I now take a comparable rental property in our region and calculate 1200 euros rent for the coming 12 and past 4 years, I would have 200,200 euros ((1200-157.29)×12×16) until the full ownership transfer to offset the depreciation as well as the renovation costs. Since I neither believe that my house will lose that much value in 16 years (new building) nor that the renovation costs should remain manageable in this time, building should definitely be worthwhile in my case. With every month living then in the paid-off house compared to the rental house, one can then add 1200 euros or more in case of rent increases to the 200,200 euros.
These are of course the pure numbers, regardless of advantages such as freedom, security of tenure,... or disadvantages such as location dependence,...
Can it be seen this way or have I missed/forgotten something crucial?
Has anyone of you done similar calculations?
Regards from Franconia