Financing plan with transitional housing

500€ rent

Is that cold or warm?

With my salary, I could easily afford 1200€ for a monthly investment independently of my girlfriend, if I didn’t have to pay rent.

So how much can you save at the moment?

We are buying an apartment for max. 100,000 EUR. For that, we need a loan. We will live in this for the next 3-5 years. When half of the apartment is paid off, we will sell it (assuming the apartment is sold for at least the same price as it was bought). With the money saved during those 3-5 years (now available as equity), we will take out a bigger loan to buy a house for, say, 250,000 EUR.

1) Have you even calculated what that means in numbers? Especially with a condominium, the monthly service charge is usually somewhat higher than what tenants have to pay for additional costs.

In other words, how much equity will you have available after 3, 4, or 5 years? Because the incidental purchase costs have to be earned back first.

Also, you should set aside an extra cushion for maintenance, since the service charge usually covers "ongoing" costs, but larger one-time expenses often lead to special assessments. That means that out of your 1200, significantly less may remain to build your "equity capital."

2) I’m not familiar with Austria. But a house today for 250,000 seems very ambitious; in 5 years, that will almost certainly become even more ambitious. Have you looked into the market in your area?

Yvonne has already pointed it out: incidental purchase costs, prepayment penalty, moving costs... and possibly small renovations.

I have also calculated this for a 200,000 Euro apartment:

- 10% incidental purchase costs: 20,000 Euro

With a saving of 600 Euro cold rent and at the same time service charges of 250 Euro, the incidental purchase costs amortize after about 5 years. If you then also calculate appreciation-depreciation-moving costs and prepayment penalty, I tend to come up with a loss for myself.

With a saving of 600 euros cold rent

Where does the saving come from? We pay the same total for our apartment as before (and that with only 2% repayment)

MKK: It was a bit simplified. My idea was, instead of giving the landlord 600 euros cold rent, to basically invest in the condominium. Long story short: buying a temporary apartment does not seem profitable to me...

A saving would go into my pocket, and not just into another pot