The simplest rule of thumb is to compare two things: the monthly repayment installment (or even more strictly its interest) and the average monthly net rent available on the property. If you are not able to earn a higher return on your savings than your rent (or its interest rate), then you may want to consider buying a property.
If, on the other hand, you can achieve a higher return on alternative investments, invest in it. These may be some financial instruments (stocks, government securities, bonds, funds, etc.) or even tangible assets (art treasures, commodities, vintage cars).
Even with such high real estate prices, is it worth buying real estate?
Real estate prices have risen dynamically in recent years, especially when compared to a period of sleepwalking following the 2008 crisis. So many people find real estate expensive.
It is difficult to forecast real estate prices, but as loans continue to become cheaper, wages go up, the government supports home-building and the macro environment is stable and there will be no major crisis, no significant decline in property prices is expected. Therefore, it is still worth buying long-term real estate, rather than delaying your purchase decision for years.
How do you know for sure that the bank will give you a loan?
Many banks offer services that, even without the real estate they select, will conduct a full creditworthiness test and issue a 3-6 month promises of creditworthiness.
Subsequently, the loan is disbursed in an accelerated procedure when the target property is found. I’m happy to help you with this risk-free and cost-free pre-qualification so you can put down your deposit when buying a property.
Are renovation motivations right?
Renovations typically swallow money like a holey bucket of water . If you are upgrading because you want a nicer, more comfortable home, you won’t be disappointed, but these are typically bad investments financially. If you want to invest in your home for investment purposes, you may want to modernize it and make investments that have a return on investment within 10 years: solar panels, insulation, window and door replacement.
The average interest rate on new housing loans ranged from 13% to 15% in 2009, from 11% to 12% in 2012, but was only 4-6% in 2017. If you have taken a fixed interest loan for 5-10 years, the repayment details can in most cases be reduced by 20-30% , but it is not uncommon for us to achieve even greater savings. Everyone has the right to redeem their existing loan (s) in order to enjoy the benefits of low interest rates at current market conditions, even for a fixed term.