Rent a house or buy/build? How did you decide?

Terrace more quality of life with less cost than in a 3-room apartment

Never Never Never Never... I will argue that with you until the end. Rent can never be that high! At the end of life, you have spent more money on property than the renter.

Steffen, that's true. Only you did not record it as an expense. Rent is an expense, paying for a house is an investment.

There are enough studies over the years that consistently come to the same conclusion: wealth building for property owners works better than for economic entities without real estate ownership. For me personally, it’s no mystery, at least not here in the metropolitan area. If you look at the increase in standard land values over the past years alone: double-digit returns are only found otherwise in high-risk investments. Surely, there will be sideways movements from time to time, but land remains a scarce resource, and thus the law of supply and demand speaks a clear language.

What’s more: those who finalized their financing up to 1.5 years ago are still below the inflation rate even with longer terms. That means, measured by real wealth development, you can wake up every morning with a permanent grin... Definitely better than zero interest on saved capital, right?

There are plenty of studies over the years that repeatedly come to the same conclusion: Wealth accumulation by property owners works better than by economic agents without real estate ownership. For me personally, this is no mystery, at least not here in the metropolitan area. Just look at the increase in standard land values over the past years: double-digit returns are otherwise only found in high-risk investments. Of course, sideways movement will happen at some point, but land remains a scarce resource, and thus the law of supply and demand speaks clearly.

Sorry, but you have unfortunately misunderstood that. The better wealth accumulation of property owners is due to the fact that they are, so to speak, forced into financial discipline (self-commitment, so to speak). Most people normally do not have this discipline. I know quite a few in my circle of acquaintances: people with very decent incomes who can hardly save an emergency fund equivalent to three months' salary.

If you have the necessary discipline, you actually do better financially as a tenant. I know quite a few people with significant rental property assets who themselves live cheaply as tenants.

From my point of view, however, an owner-occupied property is not an investment but a luxury good. I afford it not because of the financial advantages but because of the benefits in quality of life.

Never never never never... I will argue that with you until the end. No rent can be that high! At the end of life, you have spent more money on ownership than the tenant

You know, I don't really care about an investment. I calculate what I have available monthly or have to spend. I have owned property for 20 years: for the townhouse I paid 660 € monthly in the end, then sold it. Now we also pay less than 1000€ with the mentioned comfort. And I'll gladly show you a screenshot of an apartment that offers something similar, in the same location, it should be findable with price on Immonet

From my point of view, an owner-occupied property is not an investment, but a luxury good. I afford it not because of the financial benefits, but because of the advantages in quality of life.

I agree with you, if you optimize solely for cost and return, an owner-occupied property is not a good investment compared to a rental building. But, perhaps precisely because of the self-discipline you mentioned, it is a good piggy bank.

Just last or the weekend before there was a major report in the Süddeutsche or ZEIT about why today’s generation, despite well-paid jobs, can hardly accumulate wealth compared to their parents’ generation. Certainly, it is due to high social security contributions and late career start, but not least due to high consumption expenditures for cars, clothes, vacations, food, and much more. The previous generation saved on these in favor of building assets.

But I actually see it this way: even an owner-occupied property in a growth region is, for me personally, better than spending money exclusively on consumption. And you don’t have to live in it forever. Once the children have left home, selling the property is a good capital base for a rental building and retirement provision.