Used property, how to finance?

How should I finance a property? [...] Net income between 4,500 and 5,500 [...] So far no equity [...] Offers between 200 and 350 thousand are interesting, below that we haven’t found anything according to our expectations.

One end: 350,000 euros plus 6.5% property transfer tax plus 2% land registry/notary fees amounts to about 380,000 euros. Hopefully, you will exclude a real estate agent. With 4,500 euros net, you can IMHO expect an annuity of 2,000 euros. With 100% financing (note: the purchase price of a used property nowadays is significantly above the value the bank attributes to it!) you need a loan of 350,000 euros. At a nominal interest rate of 3% p.a., you will pay it off over 20 years. You have to save for the ancillary costs beforehand (at least 30,000 euros, which takes about 15 months at 2,000 euros/month; we don’t need to discuss interest). You can calculate a bit yourself ... Household budget --> very sensible, then you see what installment you can pay (and where your money is leaking). The more equity you have, the better the interest conditions (keyword financing or loan-to-value ratio). I would take a look at building savings contracts for the savings phase (critical, mind you!, but the interest conditions are currently very favorable, although in your case, due to ancillary costs and lack of equity, a purchase is, in my opinion, not an option today).

I see it similarly to the previous writers.

Let’s assume that you still need 3 years until you have enough equity. Then you have a maximum of 30 years left until retirement, plus or minus a bit.

As a doctor and given your previous lifestyle, you certainly don’t want to live in the last old building, so with renovation/refurbishment you will surely be around 300-350 thousand euros, rather towards the upper end.

At 350 thousand euros with 2.5% interest and 2.5% repayment, you are looking at a 1,500 euro installment plus additional costs and reserve for renovations. All in all probably 2,000-2,200 euros.

As academics, it’s not like you can have saved for 10 years by the age of 30. That’s clear, but what does no reserves mean? Really none? Make sure you save 36,000 euros in the next 36 months. Then you will have 1) the proof that you can sustainably afford this burden (1000+ rent) and 2) enough equity saved to get a good financing condition.

You have to spend your money first and no, that’s not just one big vacation. There are many many more hidden items. So keep a household budget. You’ll be surprised what adds up where.

Good morning and thank you very much for the assessment! Your opinions seem absolutely realistic to me, the equity will become our "Ziel 2015/16," also to get a feeling for such sums.

Best regards!