Mostly, Mr. German and I have avoided lifestyle inflation.
Lately I’ve been visiting my coworkers and friends in their homes, and have been blown away by how stunningly beautiful their spaces are.
Easily, their homes could be featured in design magazines, and the value of their properties are in the 500K-1M EUR range.
Like what?! Mr. German and I are living in a 600 EUR/month rental, while my friends live in fancy mansions?
Of course I’m being figurative, but it makes me wonder whether we’re doing something ‘wrong’.
I know we’re not literally doing something wrong, and it’s based on priorities, etc, etc… But still. It’s making me feel like maybe we should step it up a little bit. Not a lot, but a teeny weeny bit.
Since Mr. German and I are in the market to buy property, maybe we should relax our budget and buy something more WOW?
We’ve been so back and forth about it, but finally decided that we should buy a small, centrally located flat that we can afford in cash.
Then, we fell in love with an old Altbau (historical building) that we can’t afford in cash, is not centrally located, and is 150m2 (1500 sq ft = too big for us). It’s basically way outside of what we were looking for, but yet it still draws us because it’s so *nice*.
Isn’t it a beauty?
We could comfortably put down 50% as a downpayment, and our mortgage payments would be about what we pay for rent now, excluding utilities. We expect that living in a house versus a rental apartment will increase utilities, since we’d be on the hook for taxes and will have more space. We could ‘easily’ pay this property off in 3-5 years.
Basically, the house is affordable for us, but will increase our costs which is not what we initially planned.
Does it make sense to do this? Does it support our FIRE goals?
I’m not sure. I think it’s a yes or no depending on how I describe it.
I could say it’s a good investment since houses are usually not this cheap, so we could be buying into an opportunity, plus we could have more space and live in a pretty setting (like my friends do!). We could even turn it into a triplex, and rent out 2 of the units, or keep one or both open for Airbnb. Likely we would keep the first 2 floors for ourselves and the 3rd floor we would list on Airbnb, or maybe rent to a student roommate. With space comes potential. By that I mean income potential.
I also could say it’s an old building that is potentially a money-pit, and that we should steer clear of it since we wanted to reduce costs and stress, not increase them. Since this Altbau is not centrally located, my train commute will rise from 1 hr to 1hr45 min (!!!), which may force me to buy a car. Owning property in general is not a good investment, as it will tie up a significant portion of our networth without generating passive income. Plus, real estate in our area of Germany is not so easy to sell.
We’re torn. Maybe on paper it’s not the best choice, but we still feel like we want it. *sigh*
Just for fun, here is the floor plan: