Where to live and whether it matches our FIRE goals

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Currently we pay about 610 EUR per month for rent, which is affordable, but we think the place is worth max 500 EUR per month based on other comparables in the area. Since we are interested in FIRE-ing, we can find much better uses for an extra 100 EUR per month!

So we’ve been toying with some options, but keep going back and forth on what we want/what is feasible. Mr. German and I are really different, so that can make it hard to come up with a solution that suits us both. *sigh*

As with all blog entries here, I’m writing to figure it out, while also communicating to Mr. German in a way that is not overbearing to him (he is new to FIRE and personal finance in general).

Goals

It’s important to keep both of our goals in mind.

Ms. Canadian Expat’s goals: to reduce our housing costs to 400 EUR per month or less, so that we can balance out the cost of our car (!), and put the extra money into the stock market to generate passive income. I need to generate enough passive income so that I can retire from my field in 7 years. Ideally, I would like us both to be able to leave the workforce in 7 years (if we want), so we can be FREE and do things more fun than working 50-60 hours a week!

Mr. German’s goals: to live somewhere comfortably, that is cheaper than where we live now, but not so far-out that it makes it difficult for my dear wife to commute (she already commutes 1 hour to work each way); to be close to nature, and to have time for hobbies that don’t involve talking about FIRE-ing in every single conversation!

^ I’m paraphrasing Mr. German here. If he wants, he can help me clarify his goals further, but that seems to be what I get when we speak about it.

options

Here are some options we’ve been toying with.

Option 1: Buy a ‘normal’ flat in our cheap city. I wrote about it here. We’ve been looking at 2 bedroom flats near the main train station. Ideally we’d like something we can afford in cash, because anything that involves a mortgage will mean we will be paying more than 610 EUR per month, which makes achieving the 4% rule (our FIRE goal) harder to do in 7 years.

Cons: Hard to find something that we can afford in cash; can’t find one we like or agree upon; we keep changing our minds/arguing about this. 😕

Option 2: Buy a studio apartment in our cheap city, and use tiny home design ideas to make it functional (like what these 2 Brooklyn roommates have done!). We had considered renting a studio for about 300-350 EUR per month, but in reality, landlords only want to rent these out to singles. So, why not buy a studio instead? We can comfortably afford this, while still having some cash left over for my stock investment strategy.

Cons: Mr. German is not so comfortable with this; it requires potential renovation work, and we both work busy full-time jobs; more pressure on Mr. German who is the handy one out of the 2 of us and also the German speaker; we may have a baby soon, which may make the space tight; if we don’t like living so small, it may be hard to sell and we don’t prefer to be landlords.

Option 3: Find cheaper rent. We can easily find something in the 400-450 EUR range in our city, in an area that we like. We haven’t done this yet because we can’t decide on whether we should continue renting or buying. We’ve actually switched sides on this issue. I used to want to own, while Mr. German was more hesitant about it. Now he is all for owning, and I’m less committed to it. I’ve mainly ducked out of searching for apartments and instead, have focussed on setting up a stock investment strategy for our passive income stream. But if Mr. German can find something nice, I’m also fine with buying.

Cons: a feeling of living in a temporary space; potentially missing out on getting into the real estate market while it’s still affordable; installing a kitchen in someone else’s space again (many flats here don’t come with kitchens, making moving a huge PITA!).

Option 4: Staying put in our [overpriced] flat. We really like our flat, we have a great view, and it’s easy for both of us to commute to work. We’re also right across the street from grocery shopping, and 800m away from the forest where go mountain biking every weekend (or everyday for Mr. German). Living here saves us a lot of time and hassle. One of the reasons we haven’t moved yet is because we can’t find anything as good as what we have here. Lifestyle-wise, this place hits all the marks and keeps things simple for us.

Cons: Overpriced rent, feelings of not getting a good deal, not being open to change.

Anyone have ideas for us? We’re open to what you think!

I lean more towards option 2 (buying a studio) or option 3 (cheaper rent), while Mr. German is more for option 1 (buying a nice flat) and 4 (staying put). Of course, life can’t be totally agreeable between us. 🙂

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5 thoughts on “Where to live and whether it matches our FIRE goals

  1. Pingback: Why we’re still renting after a 10 month search | Ms. Canadian Expat

  2. As for the buy vs rent question, have you tried using this calculator by the NYT? http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html. I’m not sure if you can adjust the factors as it pertains to German markets. I definitely would consider a studio or a cheaper place if you can find it in your area. If you think your current place is worth less, then it really doesn’t hurt looking. Sounds like you live in a great area and enjoy your place, so take your time with options 1, 2, and 3…you don’t have too much to lose, right?

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    • You’re right, there’s not much to lose and we’ve decided to stop stressing out and to stay put for now. With all the energy we’re spending trying to figure it out, we could be putting that energy towards something more productive like increasing passive income, while actually enjoying where we live!

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  4. Pingback: House hunting in Niederrhein | Ms. Canadian Expat

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