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

There was a big report just last or the weekend before 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 the high social contributions and the late start of their careers, but not least because of the high consumer spending on cars, clothes, vacations, food, and much more. The previous generation saved on these in favor of building wealth.

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

We are not that far apart. Yes, it is a problem that in Germany we have the highest tax and contribution burden worldwide and it continues to rise because our politicians want to save the whole world and spend a lot of money on something that is not achievable with the resources given. There is also a lack of political will in Germany to shorten training periods. But everyone is responsible for their own consumption. I know people with similar incomes who spend 2,000 to 3,000 euros more per month. And I do not get the impression they live poorly.

I would not sign that off that easily. Homeownership is a different kind of saving. It is not money in a daily account, funds, or stocks but the four walls. Most with equity then use it on pointless stuff or just grin at their account. Now I'm sitting here with my beer on my terrace, letting the sun roast my bald head. One can talk about how tenants are more flexible if finances don't work or if there's a job change.

Yes, and precisely against the background of comparison with other investments, buying your own four walls is a bad idea. Compared with other consumption options, though, I agree with you: you can do it. I will too. But I will not try to talk myself into believing it is a good investment.

Lost returns, Steffen, on the stock market, you might as well compare real estate with a casino, there the returns are probably even higher. That doesn't convince me. Stock market. Never.

Rarely have I read such nonsense. Investing in the stock market has NOTHING to do with a casino if you invest in a diversified portfolio. In many respects, this is even safer than your daily allowance account, your property, or your life insurance. Unfortunately, this attitude is one of the reasons why the wealth of Germans is relatively poor despite high incomes.

Rarely have I read such nonsense. Investing in the stock market has NOTHING to do with a gambling casino when you invest in a diversified portfolio. From many perspectives, it is even safer than your savings account, your property, or your life insurance. Unfortunately, this attitude is one of the reasons why the wealth of Germans is relatively poor despite high incomes.

Yes, sure, but stocks and funds don't only go in one direction – you have to manage them actively, which not everyone wants or can do. A house can continue to lose value. So what? Just keep living in it.

All in all, homeownership is a luxury and not an investment (except for potential appreciation of the property). Just one example: I was at the hardware store at least 5 times last week and certainly spent >1000 EUR there... for a bit of gardening. On top of that, there’s the 2000 EUR Husqvarna for the lawn. I probably wouldn’t have these costs in a rental apartment. I would have put the 3000 EUR in the stock market and held it for more than 7 years. 7 years is the statistical threshold from which you would have always (at least in the past) achieved >2% annual returns.

In the end, home ownership is a luxury and not an investment (except for the basic appreciation of value). Just one example: I was at the hardware store at least 5 times last week and certainly spent >1000 EUR...for a bit of gardening. Then there's the 2000 EUR husqvarna for the lawn. I would hardly have these costs in a rental apartment. I would have invested the 3000 EUR in the stock market and held it for more than 7 years. 7 years is the statistical threshold after which you would always (at least in the past) have achieved >2% annual return.

With your 4 million house, that fits – that's luxury, for others a functional object or provision (instead of other assets). Spring is extreme if you want it to look nice. We also always sink a lot of money into it. I estimate at least 300-500€. But there is also the negative example, neighbors of ours have an xxxxl garden and only mow when the blades reach 50 cm, and they don't care about the lawn. Instead, the man occasionally buys a digger for his company.

With your 4 million house, it fits – that is luxury, for others a utility item or a form of provision (instead of other assets). Spring is extreme if you want it to look nice. We also always sink a lot of money into it. I estimate at least 300-500€. But there is also the negative example: neighbors of ours have an xxxxl garden and only mow when the blades reach 50 cm, and they don’t care about the lawn. Instead, the man occasionally buys an excavator for his business.

In Germany, homeownership is always luxury. At least in the Germany where I live, especially here in the East. Walk around the country and ask the "normal" workers if they rent, and if so, why do you think that is?