8 ms·

I am buying a place in the capital city of my country for this exact same reason. I want to travel and be free to do what I want, yet I also need a place to liv

I am buying a place in the capital city of my country for this exact same reason. I want to travel and be free to do what I want, yet I also need a place to live in for the months that I'm not away traveling. I could rent something but that would be the same price as my mortgage and it will be lost money anyway. Instead I picked buying so only a small part (interest) is lost, but everything else goes back into my own pocket. So even if I'm only spending 50% in my own place it is still cheaper then renting. However, you are talking about things that I don't really have to worry about since it is an apartment. So maybe there is a slight difference here.

ant6n 6y ago
What about using it as a vacation rebtal while away. There are probably companies that take care of the details. Personal stuff could be locked away somewhere.
deleted 6y ago
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heipei 6y ago
It's important to realise that you can't compare your rent with your mortgage payments without factoring in a lot of things. The rent you pay includes things like taxes, insurances, upkeep, depreciation, risk and opportunity costs that your landlord has to pay while still coming out ahead. And he has to deal with all the administrative things too. So if you're a homeowner yourself, ask whether you're still coming out ahead carrying those costs yourself, plus the risk that something around your house breaks, plus the risk that your home might lose value for another reason, plus the opportunity cost of your down-payment not being invested otherwise (e.g. stocks). At the end of the day, it depends on the location and how far apart the purchase prices have diverged from rents. With the current economic situation and low interest rates, house prices where I live have mostly broken away from rents so significantly that it doesn't make any sense to buy from a financial standpoint.
- WildGreenLeave 6y ago
  I've checked your profile and saw you are living in Germany, I am living in The Netherlands and buying in Amsterdam. I do not know if it is different in Germany so I cannot say too much about that. However, regardless of what the situation is, in the end the landlord will have to come out ahead when you are paying rent. Only by that definition it should save you money in the long run when buying your own place. The only argument that can be made is that the money you do not spend on your own house is money that could be put into a different investment like the stock market. But in NL renting a place is roughly as expensive as my monthly mortgage payments. So both situations it is money I cannot put in the stock market. Insurance and heating is being added on top of those monthly payments regardless of the option you pick.
  - ido 6y ago
    In Berlin your rent will most surely be less than mortgage payment unless you take a very very long mortgage (like 50 years). Plus you need a down payment. The reason it makes sense for landlords is that they have nothing else to do with the money if interest rate is zero or close to it - the alternative is slowly losing it (or higher risk stuff like stocks). So they slowly build equity while not profiting every month, counting on prices continuing to rise for their long-term profit and if they run several properties you can get economies of scale going for managing them.
    - VBprogrammer 6y ago
      On a month to month outgoing basis I can imagine you might be correct that renting works out cheaper in some cases. However, it's missing something I think is important. In my case we have a £335k home at 1.6% interest which means every year we pay £5000 in interest, but we paying off around £15000 of the principal on the loan. After 10 years we could sell the house, spend the £150k+ (assuming the home value stays the same) we've paid off on a sailing boat and head off around the world or whatever takes our fancy. If we'd have rented we might have been able to save maybe £200 a month in outgoings. Even invested in index funds it's unlikely to come close.

ant6n 6y ago

What about using it as a vacation rebtal while away. There are probably companies that take care of the details. Personal stuff could be locked away somewhere.

deleted 6y ago

[deleted]

heipei 6y ago

It's important to realise that you can't compare your rent with your mortgage payments without factoring in a lot of things. The rent you pay includes things like taxes, insurances, upkeep, depreciation, risk and opportunity costs that your landlord has to pay while still coming out ahead. And he has to deal with all the administrative things too. So if you're a homeowner yourself, ask whether you're still coming out ahead carrying those costs yourself, plus the risk that something around your house breaks, plus the risk that your home might lose value for another reason, plus the opportunity cost of your down-payment not being invested otherwise (e.g. stocks). At the end of the day, it depends on the location and how far apart the purchase prices have diverged from rents. With the current economic situation and low interest rates, house prices where I live have mostly broken away from rents so significantly that it doesn't make any sense to buy from a financial standpoint.

WildGreenLeave 6y ago
I've checked your profile and saw you are living in Germany, I am living in The Netherlands and buying in Amsterdam. I do not know if it is different in Germany so I cannot say too much about that. However, regardless of what the situation is, in the end the landlord will have to come out ahead when you are paying rent. Only by that definition it should save you money in the long run when buying your own place. The only argument that can be made is that the money you do not spend on your own house is money that could be put into a different investment like the stock market. But in NL renting a place is roughly as expensive as my monthly mortgage payments. So both situations it is money I cannot put in the stock market. Insurance and heating is being added on top of those monthly payments regardless of the option you pick.
- ido 6y ago
  In Berlin your rent will most surely be less than mortgage payment unless you take a very very long mortgage (like 50 years). Plus you need a down payment. The reason it makes sense for landlords is that they have nothing else to do with the money if interest rate is zero or close to it - the alternative is slowly losing it (or higher risk stuff like stocks). So they slowly build equity while not profiting every month, counting on prices continuing to rise for their long-term profit and if they run several properties you can get economies of scale going for managing them.
  - VBprogrammer 6y ago
    On a month to month outgoing basis I can imagine you might be correct that renting works out cheaper in some cases. However, it's missing something I think is important. In my case we have a £335k home at 1.6% interest which means every year we pay £5000 in interest, but we paying off around £15000 of the principal on the loan. After 10 years we could sell the house, spend the £150k+ (assuming the home value stays the same) we've paid off on a sailing boat and head off around the world or whatever takes our fancy. If we'd have rented we might have been able to save maybe £200 a month in outgoings. Even invested in index funds it's unlikely to come close.