Well, I just wanted you to know that I read your entire post!
Being a landlord, by the way, has its advantages and its problems. One problem is: do you try to keep your tenants by offering them a lease, which is generally a one-year commitment, or do you want to have flexibility and rent to them on a month-to-month basis?
To help make the financial decision, it would be worthwhile to track down an accountant whose firm is familiar with German taxes as well.
All the best,
Basically, I think that if you want to invest in real estate, you should do so. There are tax advantages to owning investment property, and it might even make sense for you to buy a rental property rather than an owner-occupied one.
All the best,
Nobody can predict what will happen over the next 5 years in real estate but I can say the market will probably continue to be pretty strong here. People want to live in this area and that is not going to stop even if the economy sputters along or comes crashing down again. But again, everybody has an opinion. I am basing mine on the fact this area is one of strong growth and development and that is not going to stop in my opinion.
So if you do decide to buy now you have to also think about what do you do when you eventually go back to Germany. As I mentioned my brother in law is just now retiring from the Army and coming back home from Germany. He has kept his home the entire time he has been there and it was definitely a good thing in his situation. I managed the property for him so he had little worries. The rent was always paid on time and the home is worth a lot more now than it was 3 years ago when he initially went overseas. He is planning on buying a new home and keeping his old home as a rental. Letting the tenants pay down the mortgage and he plans on selling and using some of the proceeds to put his children through college.
So while we cannot say for certain that a home will appreciate in a 5 plus year timespan the odds in this environment and location make it a very likely possibility. Owning a home will also hedge you as property values increase. So for example. Even if you do not plan on living in the home or coming back to the States you are making a good long term investment. Sure this investment does and will have some negatives like what do you do if you do not want to keep the property when you move? If you keep it who will look after it for you and help you with collecting the rent? So these are all factors you need to consider.
You also need to look at other opportunities or places to put your money. Would or could they be put in safer or easier to manage alternatives? These are all options you need to consider.
I was a little all over the place but I hope I gave you some things to think about. If you have any questions or would like to discuss your options in greater detail please contact me anytime to discuss.
Hope this helped.
Don Groff | REALTORÂ® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 | firstname.lastname@example.org
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
Good day to you. The age old question. Do I buy or do I rent? The problem is depending on the particular time, circumstances and the individual, either choice can be right. Financially speaking, as a general rule ownership is better than renting. Ownership builds your wealth. Renting builds someone else's wealth. While in theory it seems pretty simple and straight forward, in all actuality, it involves a whole lot more considerations than just owning or renting. You and your boyfriend really need to sit down and discuss this very thoroughly. You really need to take into account your immediate, mid-range and long term goals. If ownership is the route you take, you really need to understand the ramifications of "joint ownership" outside of marriage. Ownership means legal responsibility and obligation. Renting means more freedom but only to a certain extent. You still have the obligation of the lease and its terms.
Everyone thinks that the costs of renting are limited to, well, rent! On the other hand, there is a laundry list of expenses we all know go along with owning a home. But many people aren't aware of the hidden, surprising costs associated with both owning AND renting a home, and it's what you don't know that has the potential to derail your rent vs. buy decision-making, so here are the Top 5 Hidden Costs of both renting and owning your home:
Top 5 Hidden Costs of Owning
1. Special assessments. HOA dues to maintain the complex come as no surprise to condo owners, but hefty special assessments to make unexpected (and unbudgeted) repairs to the roof, windows, boiler or even foundation often catch unit owners unawares. Even if your home doesnâ€™t belong to an HOA, donâ€™t be surprised to see special assessments tacked on top of your property tax bill, covering public services including things like street lighting, tree trimming, pest control, libraries, and even schools.
2. Utilities and services you didnâ€™t need while renting. Many renters have never had to pay for things like gas, garbage, water and pest services, and they've also looked to their Electric, gas, garbage, alarm, water, pest, home warranty â€“ which mitigates larger surprise costs of unexpected major repairs, gutter cleaning/maintenance, snow removal/winterizing, etc)
3. Private mortgage insurance. Todayâ€™s savvy homebuyers are well aware that theyâ€™ll have to pony up for private mortgage insurance, or PMI, if theyâ€™re putting less than 20 percent down on their mortgage. But the cost of PMI has spiked over the last year, and the amount definitely catches buyers off guard.
4. Penalties and fines. HOA rule violations, like parking in the wrong spot, installing hardwood floors in an upstairs unit, or painting your home a forbidden hue can result in surprising fines, on top of the costs of remediating the issue. Even single-family homeowners can get ticketed and/or fined by their city or town for violations like having overgrown weeds or other building code violations â€“ especially those which create fire and safety hazards.
5. Items you didn't need while renting, but you do as a homeowner. This varies based on your climate and the type of home you own, as well as on the services you outsource, but can include landscaping equipment (e.g., lawn mower, snow/leaf blowers), washer/dryer, fridge, window treatments, and light fixtures.
Top 5 Hidden Costs of Renting
1. Opportunity Costs. When you rent, you lose out on the chance of equity â€“ which can mean an increase in your homeâ€™s value but, even in a down market, can also mean the chance of ever owning the place you live free and clear.
2. Income taxes. If you earn above a certain level of income, the income taxes youâ€™re paying as a renter will be substantially higher than they would be if you owned a home and could deduct your property taxes and mortgage interest.
3. Storage. Many a renter simply has too many personal belongings to stuff into their small apartment, so itâ€™s not uncommon for tenants to also pay for a storage space, without calculating that expense into their â€œhousingâ€ budget.
4. Costs of improving the property. Long-term renters may paint, replace the flooring, and do other improvements to make the place livable. But since itâ€™s not technically â€œtheirâ€ home, when they do move out, all the cash they invested is lost. In fact, some landlords may require them the pay or forfeit deposit money to bring the place back to its original, neutral dÃ©cor.
5. Lost deposits. Anyone who has rented more than a couple of apartments is well aware of the chances of losing some or all of your security or pet deposits, no matter how well you care for your home.
So really take the time to think this through.
Stephen B. McClain, Broker Owner
Cornerstone New Home Solutions
I would buy something not too expensive and live there until it's time to leave then consider either selling or renting it. If you rent something now, you'll be paying more per month for less house and at the mercy of the landlord should they decide to increase the rent beyond what you want to pay. Appreciation in the area is typically around 2.7% per year even though it is currently higher. after 5 years, you'll be looking typically at an increase of around 13.5%.
If you rent, then your rent will usually go up around 3-5% per year but won't recoup any of that money when you leave. It does give you a little more flexibility but you'll still be expected to finish out your lease.
Just my 2 cents worth. Let me know if I can help.