In large cities such as Berlin, Hamburg or Munich, statistics show that about 75% of the population rents. The main reason is that tenants are heavily protected by the law; if the lease is unlimited (standard practice), it is extremely difficult to evict the person. Even if he has rent debts, even if he pesters the landlord with constant complaints and does not keep the house in good order. In addition, rents are relatively low and almost all parties are regulated by the state.
However, finding such a "standard and regulated" flat in big cities is becoming a challenge. And then the question arises - should we get our own place?
Here is a calculation of a studio in Pankstraße 88, 25 square metres. in Berlin
A purchase price of €200,000, the cost of the purchase (considered to be the maximum):
Total: 226,000 €
Equity 20% = 45,000 €
The rent price is 990 € + 200 € for utilities (as it is a new building, the price is not subject to state regulation), and in principle a studio flat in the area will cost about 1100 - 1300 €.(Berlin, Wedding)
Calculate the loan payment:
Loan amount: € 181,000
Average interest rate on the loan: 3,5%. Carrying amount of the loan: 2%.
Total loan payment: 5.5% p.a. On an amount of 181,000 € = 9,955 € per year, 830 € per month + 200 € for utilities. Total of € 1,030 per month.
+ here you are paying for your property, i.e. investing in the future rather than sending everything to the landlord. And if you increase your capital to 30% (67 800 €), the monthly payment will already be 725 € + 200 € community fees = 925 €.
You can buy and rent and still receive a monthly cash flow of 365 € (6,5% yield on investment - in the new building market in the capital of Germany).
It turns out that in this case it is more profitable to buy. But this is not always the case - each case has to be calculated individually.
We will be happy to calculate an individual offer for you and offer you specific investment options according to your requirements!