Take more credit or sell?

Hello people,

briefly about our situation:

We (M35, F33, expecting twins) have the following situation:

M employee 2,600 net, F civil servant health insurance adjusted also 2,600, although this salary will initially drop in the next few years and we do not want to plan for it.

That means with child benefit approx. 3,000 net (plus until mid-2017 2 years of parental allowance of 900), from 2017 or later at 40%-50% position possibly approx. 1,000 net (uncertain due to timing)

We want a plot of land + prefabricated house for approx. 520,000 all in (due to high land prices)

Equity 250,000 + condominium worth approx. 200,000 (in case of possible rental "net income" for pure repayment (minus maintenance fees, tax, etc.) of approx. 400)

Without selling the apartment we would have to borrow approx. 270,000

Now the question is: sell the apartment, that would be easy, we would comfortably pay off 70,000 in 10 years without stress.

Or keep the apartment (very good city location, stable value) as retirement provision and take the large loan?

Things like one normal vacation, occasionally eating out, etc. still have to be included.

Thanks already for your feedback.

Hello!

I assume the condominium is paid off? These are interesting number games. In such a constellation, I would probably tend to rent out the condominium if a- it is always easy to rent and does not pose a burden b- one can also handle "rent-free" periods.

How is it basically, could the additional loan requirement be channeled through the condominium to reduce the tax burden? Possibly, a tax expert, to be absolutely sure, should be consulted.

A constructor: raising funds on a free-of-charge property, deducting interest.

It depends on the condition of the apartment, will it last 15 years without major renovation? Because you have to pay off the house for at least that long. If yes, I would keep it and make special repayments with the rental income, meaning initially disregarding the rental income in the financing.

Thank you for the initial feedback

- Apartment is paid off -
- great location, renting out is easy
- reserves in the homeowners' association for possible roof, painting, etc. are very high (no risk)
- upon our departure investment of 2,000-3,000 (advertising costs)

Hello,

As you describe the situation, I would also keep the apartment and rent it out.

If at some point, for whatever reason, you no longer like it, you can still sell the apartment and partially repay the loan (if necessary, against a prepayment penalty).

In my opinion, there is currently no better retirement provision than a debt-free, well-rentable apartment.

Regards,

Dirk

So, then I will speak against renting out: If the apartment is so great (which I believe you), I would sell it at today's prices.

Having only one apartment as an investment is suboptimal and even a rented apartment requires effort and causes costs.

You are also expecting twins: That costs endless , speaking from my own experience. In the first three years we spent almost 100.- every week at the drugstore, childcare 1,100.-, stroller 800.-, four child seats (with two cars) 1,000.- and so on and so forth