When did you buy your first house?

Buy house? 25 questions you should ask yourself BEFORE

You want one Buy house

... but aren't you 100 percent sure whether this is a good idea?

It is not an exaggeration to say:

Buying a house is one of the most important decisions we can ever make in our life.

On the one hand because the financial outlay is so great.

On the other hand, having your own property has a not inconsiderable influence on the way we live and work.

So it is worth taking your time to weigh the pros and cons of buying a house.

The main arguments pros and cons can be found summarized in this article.

Contents overview:

Numbers vs emotions

Some people would like to approach the problem “unemotionally” and simply calculatewhat is cheaper:

Buying a house or renting another one?

Only to then find out that the desired result can be calculated, depending on the assumptions made.

Others meticulously collate all the facts about the entire real estate market - almost from a bird's eye view ...

... but overlook the fact that these say little about the situation of an individual property.

Commentator brokerskid says:

I believe that it is not possible to make a decision based on numbers, as we are and are shaped by emotions and thought patterns as well as our environment (a decision is always subjective and can never be made objectively).

Facts alone hardly get us any further when buying a house.

In principle, this is hardly surprising when you look at ...

How we make decisions

Behavioral economists like Daniel Kahneman show with their studies (*) that we ultimately all of our choices - more or less flavored with a pinch of ratio - unconsciously on an emotional level to meet.

But we (ourselves) are reluctant to admit that.

After all, we usually have good reasons for our decisions.

The only question is what is first da: The decision or reasons for the decision?

Most of the time, if we're being honest, this is how it works:

We really want something, we are determined to buy it and we find it after that good reasons to justify the purchase decision made before us and others.

Which complicates the whole thing ...

A house is not an investment

At least not primarily. And this despite the fact that not inconsiderable amounts of money have to be set in motion to finance a home.

Why is a owner-occupied house primarily not an investment?

Because then you would have to compare it soberly with other ways of investing money - stocks, for example.

And if you do that, you will find that your own property does not have the very best opportunity-risk profile.

But most of all I want to live in that house!

Just.

And that's why it doesn't make sense to focus on economic considerations as the main reason for buying a property.

For most people they are not the deciding factor.

So let's take a look at which Factors have any influence on our decision for or against a house (apartment):

The four levels of decision making

Ultimately, all influencing factors can be any of the following four levels assign.

I have arranged these according to their increasing influence on our decision-making:

1. Rational macro level

Most media reports that are factual about fall into this category Averages in matters …

  • Equity,
  • Ownership rate,
  • Building interest,
  • Additional purchase costs,
  • Rental and purchase price development, etc.

…to inform.

Influence our decision: rather low

2. Emotional macro level

This category includes all of the content that is related to Opinion formation contribute, but go beyond a purely factual presentation of the problem.

These include, for example ...

... that trigger an unreflected sense of wellbeing.

Influence our decision: low to medium

3. Rational micro level

This level is about facts with one specific individual reference:

  • Income situation
  • Amount of equity
  • Interest conditions
  • Rent amount at the desired location
  • Infrastructure at the desired location
  • Real estate price
  • Amount of additional costs
  • number of rooms
  • u.a.m.
Influence our decision: medium to high

4. Emotional micro level

At this level, everything revolves around them personal motiveswhat the emotional micro-level is quite sure to be strongest influencing factor in making decisions.

For speaking the home:

  • Consumption desire (want to have / want to own)
  • Security / security
  • Independence from landlords
  • Status thinking
  • More comfortable living
  • More space (living space and rooms)
  • conservative canon of values ​​(marriage, children, house)
  • the feeling of "having arrived"
  • Belonging (milieu, colleagues, circle of friends)
  • Securing the status quo ("cementing")

Against speak the home:

  • Dependence on the bank
  • Lack of flexibility and freedom
  • Bad experiences in the past with the sale of a property or related family disputes (e.g. in the event of inheritance)
  • Post-materialistic attitude (if possible, no financial ties in the form of possessions)
  • Wanderlust / wanderlust
Influence our decision: very high

How to make the right decision

The more levels that are taken into account in the decision-making process, the better.

However, do not fool yourself: the game is clearly decided on level 4.

The first three levels are mainly used to rationalize the decision made on level 4 afterwards.

When is a decision at all "correct„?

I would say …

A decision is the right one if you also come to one later point in time concludes that you can get the best option among all available Alternatives has chosen.

The problem is, of course, that you only have the alternatives that you see or want to see.

When real estate ownership for wealth creation is the only option one even looks at ...

... of course, buying a home seems to be "no alternative".

Does the reference to the risks and side effects of real estate investments help at this point?

Barely.

Risks when buying a house

Commentator Lothar's question also points in the same direction:

Doesn't it make more sense to think about the risks and possible effects than about whether renting and buying is more profitable?

In principle yes.

But just as little as motorcyclists let themselves be dissuaded from motorcycling just because other fatal accidents or smokers refuse to stop smoking just because other perish from lung cancer ...

... so are homeowner fans through horror scenarios like ...

  • Job loss
  • Occupational disability and
  • Divorce with impending foreclosure sale

... hardly to be impressed.

It only goes wrong with the others. What does that have to do with me?

Besides, you don't always have to assume the worst.

Even those who buy shares do not primarily think about stock market crashes. But on long-term rising prices ...

The last option is to think about other consequences of buying a house.

About the impact on the life quality

You should ask yourself these 25 questions

Fall to me three essential factors that have an impact on our quality of life ...

... and are directly or indirectly related to the real estate issue:

Factor # 1 - The work

A stable income is logically the prerequisite for any real estate mortgage.

Questions to ask yourself in this context:

  1. Are you with yours professional situation so satisfied that “cementing” the status quo for the next 20 years is desirable?
  2. Or would you like to - maybe even more often - change professionally, even if this is associated with "imponderables" in the income situation?
  3. Are you employed and do you want to stay that way forever?
  4. Or does the perspective excite you in which independence to be your "own boss"?
  5. Would you do the - with financial risks - Step into independence realistically go with a real estate mortgage on the back of your neck?
  6. Which regional flexibility does your employer expect from you? Are the desired career steps dependent on it?
  7. How easy is it to find an employer in your industry switch?
  8. Is a change most likely with one move connected because there are only a few potential employers in your field of work, and they are also scattered all over the country?
  9. How much does the length of the Commute to work affect your quality of life with the commuting that goes with it?
  10. Would you improve or deteriorate in this regard by buying a property?
  11. How close is your job to that economic development connected? How much is the industry you work in under pressure?
  12. Is your industry / company subject to disruptive changes (e.g. print journalism, publishing) or even threatened with extinction? Are there any threats of “restructuring”, salary cuts, etc.?
  13. Is that you freedom Is it important to be able to "throw things down" if necessary and to quit overnight if the situation (new boss, bullying colleagues, lousy working atmosphere) becomes unbearable?

Factor # 2 - The family

At this point it should not be overlooked that the change from tenant to owner status for financial reasons often involves a Evasive movement from the city towards the countryside connected is.

Here are some questions you should think about:

  1. What about the quality and the choices in terms of schools and Kindergartens on site?
  2. Which Care offers are there for children and how difficult is it to get to appropriate places?
  3. Which leisure offers are there for children and adolescents?
  4. How dense is the network of public transport? Do the children always have to rely on their parents' “driver service”?
  5. Is there a Connection to the next city / metropolis?

Factor # 3 - The lifestyle

For some, but not all, questions, the "urban-rural aspect" also plays a certain role here:

  1. How important are you Cultural Opportunities in your (closer) environment?
  2. How important are you short ways for shopping or the gym?
  3. Do you like to meet friends in urban scene cafes or does the rustically furnished village pub “Bei Siggi” do it in a pinch?
  4. Are you in your consumer behavior undisciplined and to build wealth on the Compulsory Saving relying on a real estate mortgage?
  5. Or do you have yourself and your money under control and lay down without external pressure disciplined money back every month?
  6. Do you realize that renovations can take up a lot of free time and ...
  7. ... having trouble with tradespeople is simply part of buying or building a house?

When one wants to buy and the other doesn't

It can become problematic if there is disagreement in a partnership on the property issue.

Zendepot reader Stefan sums up the dilemma wonderfully:

I don't want a real estate, but my girlfriend has the “pressure” to want to invest her inherited capital (approx. 30% of acquisition costs) (reasonably also to have to).

She is alien to the capital market, she does not deal with it, parents have so far had several concrete gold plants. So it is only logical to look around in an area that you know (supposedly).

What I'm saying, people are hard to re-educate. Neither can I have constant discussions that I consider equity investments to be more profitable and advantageous, it is YOUR money, she has to bear the responsibility (especially since the parents lost a bit in stocks in the 90s ...).

People are talking against windmills ...

Unfortunately, some couples manage to become unhappy with a property in various ways.

Many of these have to do with the added time constraint that comes with buying a home.

And what still gives a feeling of security and security today can turn into a serious financial risk in the event of a separation.

Buying a house - the bottom line

Facts alone do not help us to make a decision for or against owning a home.

Because we always make decisions unconsciously more emotional Level.

Of course, we only know afterwards whether a decision was right or wrong.

The quality You can influence your decisions by as many aspects as possible and not turn a blind eye to possible alternatives.

The fact is:

The decision for or against buying a house has a big impact on yours lifestyle.

It can influence professional decisions and thus become a determining factor in life planning.

You should therefore take your time to think about this point.

Regardless of whether you ultimately decide to buy a house or rent (an apartment): It is yours Decision.

I keep my fingers crossed that you hit the right one!

There is a simple method with which you can make provisions for old age and build up a lot of wealth thanks to a return of 6-7% p.a.

  • without to spend significant time on it
  • without to take too big risks
  • without Getting addicted to the bank or a financial advisor
  • without To have to go into debt up to your ears for a property

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Note: This article was first published in May 2014 and has been completely revised and updated since then.
Hello, I'm Holger Grethe, ETF investor and founder of Zendepot! Since 2013 I have been helping private investors to build up their wealth on their own in a time-saving way. You can find out more about me and this website here.