House purchase planned at the beginning of 2015 - No equity

Strange, here come technically not entirely correct objections, starting with some off-topic issues like the probation period, going on to rental taxation and other trivialities (which are not even properly corrected), and then I'm accused of naivety? Just like over more than 4 pages the bank's loan approval is questioned - which is certain, just as we received different advice there regarding internal quality. I myself am the ultimate skeptic, but this thread is becoming too personal and not very professional for me - unfortunately.

Hello MacGyver,

You will do what you think is right and certainly do not have to justify yourself here.

As a banker, I do see the risks mentioned, which of course do not necessarily have to come into play.

I hope for you that everything works out the way you envision, but I would still advise you to think about one or two of the hints you have received here, as you have already hinted at a few posts ago.

I don’t think anyone here means you any harm and I can understand that some statements here don’t please you, but at least you should think about them calmly.

Best regards,

Dirk

I don’t really have to worry about my equity; it’s anything but little, even though I’m not yet among the top earners, but that can still come.

Finding a property without commission is difficult, but equally doable. So, slowly I’m wondering how much more counterproductive it has to get. I probably hardly outed myself as naive.

Hello MacGyver,
just to explain:
When we write about equity here, it is not the income but the equity that is meant. I believe this got a bit mixed up.

On the topic of buying commission-free – my experience:
The houses that (in my experience – I had been looking for a purchase property for several years before the new build plan) are offered commission-free (without a broker) are often those which have hardly any backlog of repairs or are actually offered within the circle of acquaintances.

House with little repair backlog – I think that won’t fit with the region and budget plan (sorry)
House through acquaintances – you have to be lucky, which I would really wish for you

We don’t want to “put you down” here, but rather try to adjust the high expectations and wishes a bit to the (reality we have gotten to know).
By the way – I also initially planned with a budget in the amount you mentioned and was caught up by reality. So it is normal that the first ideas unfortunately change again.
Just try not to force things no matter what and always keep a cool head. When buying/building a house, you have to be the decision-maker. Take your time to search, don’t put yourself under pressure, and calculate sensibly. If it doesn’t fit, keep looking or, if possible, increase your budget (always make sure not to overstrain it).

I thought about a year ago: Hey, everything together for €300,000 will surely be enough. Now the total planning (land, house, additional costs, outdoor facilities, garden, furniture, kitchen, sampling buffer, reserves...) amounts to almost €480,000. We are starting with equity of €230,000.

I stick to it: €10,000 is nothing! Keep saving and become aware of your income/expense situation and try to develop income scenarios for the next few years.

Hello,

Regarding the probation period, to my knowledge, regulations > 6 months are initially legally ineffective.

You can believe that in church

The law basically does not specify a fixed duration for employment relationships. The regulations on the probation period and its duration can be found in applicable collective agreements. Only these provisions must be observed; provided they do not violate good faith.

An extension of the probation period is also only possible by mutual agreement. Since I am not a lawyer, I could well be wrong here; I've never had such a case...

Theoretically yes, in practice it is more like the employee will not refuse an extension because he wants to keep his job.

Regarding the need for renovation, the advertising must also meet certain standards.

You complain about half-baked statements and yourself do not act any better? What is that statement above supposed to mean? E & V is a highly reputable broker and follows no standards except those to sell the entrusted property as well and as quickly as possible. Promoting beautiful pictures is just as much part of that as giving out only partial information as initial info. These beautiful pictures have proven effective because the detailed view is often lost.

Otherwise, I basically see things similarly to you, but the negativity is a bit too much even for me.

You are 28 years young and – I have to admit that to you – anything but equipped with negative self-confidence. That doesn’t change the fact that you have to work on your income, the lack of equity, the desire to have children soon, and your naivety regarding "reading and understanding" real estate offers.

I have not been doing my job just since yesterday and therefore know the pitfalls regarding the purchase of existing property. Even if you can come up with the purchase price, later there will be a lack of capital for renovation. The purpose of financing should be, in my understanding, to “at least” cover the most urgent renovation expenses with a loan. You probably also underestimate the costs/consequences that a small child entails. Therefore, I would like to strongly advise you to actually visit a preferred property with an expert and take his arguments and statements regarding renovation costs to heart. Then, in my opinion, much of your current understanding regarding the purchase of an existing property will be relativized.

I will spare you the topic of a multi-family house because that involves more than just buying, renovating, and renting out. You should have a clarifying talk with a trusted tax advisor about this, including how required reserves can be formed.

One more word about the banker friend with managerial duties. Yours truly worked years ago for the three largest banks in the country; in the 1980s, such “friendly favors” were still possible; although, strangely enough, banks always ended up being the beneficiaries in the end. Today that no longer happens, the audit—especially after the recent crash—gives them hell. Please don’t forget that; even if you want the good friend to keep her job.

Rhineland greetings

Better conditions for rental? Interesting approach... but better to scratch that approach again.

Conditions in the commercial sector (V+V) are at best just as good as self-used WoBau conditions. More likely worse, due to higher risk or simply more equity requirements.