Rent or buy? When is something worthwhile?

Germany is a land of tenants. While in many European and non-European countries the proportion of homeowners is 80% and above, in Germany only 44% of the population live in their own home. And that, even though half of all tenants say they prefer to live in the property.

The dream of one’s own home seems attractive to many people, but often not within reach. No question, the home brings numerous benefits, but sometimes the question “rent or buy?” Not so easy to answer.

Arguments for the rented apartment

Arguments for the rented apartment

With a rental apartment you definitely have less worries. Apart from the rental payments you have to worry about little, the temporary apartment offers maximum mobility.


A home binds – both financially and to a place. Anyone planning to explore the world or move to another city for a job change is certainly better off with a rented apartment. Moving away from your own home is much more difficult than moving out of a rental property.

repairs and maintenance

Tenants are fine in terms of repairs and maintenance of the residential property. If something is broken, usually a call to the landlord, who has to take care of the damage.

Owners, however, grab themselves in the bag when the heater is broken or the roof is leaking. There can quickly come together a proud sum, for which sufficient reserves should be available.

This also applies if the entire apartment is to be modernized. In the rented apartment signs of use return to normal wear and tear, the landlord is at some point before tasks such as the replacement of the flooring, wallpapering the walls or a modernization of the bathroom.

additional costs

No matter if you are a tenant or an owner, you will not be spared any incidental costs for water, electricity and heating. At the same time everyone is affected by the fact that these items are getting more and more expensive.

While tenants pay only a lump sum for street cleaning, garbage collection and other house costs, in addition to the property tax, owners often have to pay for several insurances. Also reserves for any repairs want to be formed.

The equivalent at maximum load

Who spends 800 euros per month for the rent, lives usually reasonably comfortable. Assuming that this is the monthly maximum charge that can be applied to the rent or a monthly loan installment, it is expected that you would have to downsize for a purchase.

Because in attractive urban areas, apartments are often more expensive than a loan with a monthly burden of 800 euros with a reasonable term allows. For the rent you get so first of all more living space.

Advantages and disadvantages of the rental property

advantages disadvantage
  • High flexibility
  • Personal independence
  • Low responsibility
  • No expenses for maintenance or other unplanned expenses
  • Lower additional costs
  • Rising rents
  • No long-term financial planning
  • Limited freedom of design
  • Allocation of additional costs to tenants

Arguments for the home

Arguments for the home

Committed to property, they say. With the acquisition of a property, it is far from over. In addition to the installment loan repayment installments, it is important to create reserves, to take out insurance and to ensure that one’s own four walls are permanently maintained.

If something is broken, you have to take care of yourself as an owner for the order of the artisans and may take deep into the bag.


Of course, everyone chooses the apartment according to their own ideas. If one of them is not suitable for a ground floor apartment, the others can not give up the balcony or the daylight bath.

Nevertheless, there is no real freedom of choice. Bathroom and kitchen do not always correspond to the personal taste and the room layout is sometimes a bit compromise.

Owners, on the other hand, are spoiled for choice. As homeowners, they can plan the home completely according to their own needs and set up everything according to individual wishes. The personal oasis of well-being is nothing in the way.

The costs

The most powerful argument for ownership is undoubtedly the cost. Tenants pay several thousand euros a year for the living space – money that simply evaporates.

At least if one considers that this money could be used for the repayment of a loan to finance the home. This usually takes a few years, but in the end there is a real asset that has been created, while the tenant continues to pay diligently.

But that’s not all: If the house is paid off at some point, the monthly costs are eliminated. This is particularly helpful with the retirement age, when the monthly income decreases and the rent costs a large part of the pension.

The home is thus an optimal retirement. If one chooses an object in a promising location, which promises an increase in value, in the end, especially the heirs look forward to.

Relaxation in the garden

Both tenants and homeowners do not benefit from it, but it is about a house with land owners in the garden design clearly in the advantage: The own barbecue, relaxation in gardening and the cultivation and consumption of own vegetables can be on the agenda here. But the local green quickly becomes a burden if you do not enjoy working outdoors.

Annoying neighbors – goodbye!

As a tenant, you can easily get into trouble with your neighbors if the music is too loud or the dog barks too often. The situation is particularly difficult, even if the landlord lives in the house. As an owner you have it much easier – provided, in the semi-detached house next door there is no unwelcome troublemaker.

asset accumulation

The Bundesbank has determined that owners have around five times more assets than tenants. This is certainly partly due to the increase in value that real estate has experienced in recent years. On the other hand, this circumstance is mainly due to the quasi-enforced thriftiness.

Irrespective of the income level, the savings rate of real estate buyers is higher than that of tenants. If the former saves around 22% of their net income, tenants only have around 8% left at the end of the month. In addition to the repayments and interest payments, owners use other forms of savings – for example, to make reserves for maintenance or to diversify the personal savings plan.

Pros and cons of the home

advantages disadvantage
  • Freedom of decision and design
  • safety
  • Space and free space
  • retirement provision
  • Costs for financing can be planned in the long term
  • No annoying neighbors
  • Financing costs often 20-30% more expensive than rent
  • Stationarity
  • Responsibility for care and maintenance
  • Higher charges
  • Long-term commitment to a place

Rent or buy?

Rent or buy?

A blanket answer to the question of the purchase or the rent does not exist. Those who prefer to move to major German cities may find it difficult to buy property.

In many places, the prices are overpriced, building land for new buildings is absolutely in short supply. Anyone who reaches for the alleged bargain here, at worst acquires a ruined building, which entails high follow-up costs.

Country: buy – City: rent

As a rule of thumb is usually: In the country, where the real estate prices are low, worth the purchase, in the city, renting is permanently the cheaper choice. In particular, very rural regions are cheap, but these areas usually provide little jobs and long-term poor development prospects for the existing infrastructure.

Anyone who intends to live in their own home even when they are still older needs to rely on them. It is not least the workplace and the attractiveness of the location that determine the choice of location.

More than pure calculation

Choosing the right location is more than a conglomerate of financial considerations. After all, the human being is always driven by emotion, so that security and long-term planning may be important to one another, while others may feel flexible and independent. Ultimately, it is up to your own, very personal preferences, which of the two variants represents a more attractive solution.

Conclusion: what is realistic?

Who thinks about the purchase of a home, can be based on the following rule of thumb: As a basis, the rent (without additional costs), which can be raised annually. This sum is extrapolated to a period of about 20-30 years, with the interest and insurance added.

Depending on the personal age when buying the object is a longer period available. However, at the latest on retirement, the property should be paid off. At the end of the bill is the price that can be spent maximally on the property. A first aid to provide synonymous loan calculator for construction loans on the Internet.

Interest on construction loans is still extremely cheap. Financing will not be so fast for less, because the bottom has now passed. Anyone who thinks about property should therefore soon be able to access the current low interest rates.

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