There is a topic that was itching for a couple of years already. Buying a “home”.
Many people with whom I discussed this were providing arguments in favour of doing this step. Still, for now, my decision is against it and, after thinking enough about it, it seems that the itching went away. Here is why.
“It’s better to pay for your house than the rent”
Let’s say I found an apartment, which I can finance for the next 35 years, for the same monthly fee as I pay rent.
First of all, the results of my research say that this is impossible in Hamburg area. Plus, there is the ca 12.5% fees (notary, state, agents) from the entire buying price that you have to pay at once and banks will not finance it.
Second, there are numerous other spendings that are already baked into the rent payment: insurance, common area cleaning, trash pick up, etc. In all the apartments I rented here, the rent also contained the price for heating. All these you will have to pay extra to the payment for the bank.
This is probably the advantage I enjoy most while renting.
Once my water tap was leaking. On the next day a plumber came with a new one, installed it and wished me a good day. I didn’t event have to sign anything.
On another day, I came late home and saw that the kitchen sink was half full of water and it seemed like it still was slowly filling from down the pipe. I looked up the emergency phone number (for outside of normal working hours) and called. Soon, on that late evening, another plumber came, took a look and went to my neighbours from above to solve the problem.
Sure, these are small, manageable things, but how many big maintenance problems appear during 35 years? Many Moldovans choose to exchange their vacation for yet another “renovation” of the bathroom, kitchen or the whole apartment.
Another example: as far as I know, in Germany, if need be, house owners will pay for repairing or renovating the road, their house is built on. This might get to frustratingly high amounts of money you might have been ready to spend, say, in two years?…
Probably the most frequent argument: “What will you do when you retire? This is the investment in your future!”
Well, first of all, I might not need or even want a 3 rooms apartment in Hamburg when I retire. Today, I don’t want to move out of the city. I love the action, the crowds, the subway, the torrents of bicycles, the multitude of things to do. I want to believe that the city keeps me ambitious, might offer me opportunities. But, most probably, these feelings will change after 35 years.
I’m not an expert in real estate investment, but I believe there are better investment strategies, maybe even possible entrepreneurial opportunities, in which I could direct these money. And if I think enough about my future self, I want to believe that after 35 years I will be able to afford a cozy home to live in.
”Sell it any time”
They say, by the time I’ll want to sell it, the price will already be higher.
Or maybe not. Don’t forget the 12.5% fees paid at the beginning. Maybe I should put on top the fees of an expert who will tell me if buying this exact house is a clever idea if I might want to sell it later.
Renting gives me flexibility. I can move any time to another apartment, region, city, country. And honestly, I feel happy about it. For some reason, I believe it will not be that quick to sell the house, if I need to leave.
Maybe I invented all the arguments above solely because I am simply not ready to go into such debt. I enjoy being dept free. If, for example, I don’t have at the moment enough money to buy a specific car, I buy one which I can afford, instead of keeping in mind that I have to pay monthly for it for the next couple of years.
I’m afraid even to think that I have to spend my entire working life to pay out a house.
Disclaimer: these are my conclusions after researching this in Hamburg area. It will not change if, say, I decide to move in Berlin or München. Some of these points might not be that problematic if we talk about a cheaper area, but, at this point of my life, I can’t yet imagine moving out of the city.