Guys, I really value the opinion of the community and when I was building up my portfolio, it was precisely these opinions that helped determine what my portfolio looks like now. And I still think it's totally sexy 😏
It's precisely these opinions that I now need to decide whether or not to buy my next rental apartment.
I'm getting naked for you about my monthly cash flow, all wrapped up in a beautiful #sankey -diagram.
The whole thing reflects the future situation should I decide to rent the 125m² new-build apartment for €14.50 warm per m².
To help you understand the figures a little better, I'll explain them to you and share my thoughts and pros and cons.
![attachment](https://static.getquin.com/thumbnails/5b27db23c085198821196f21b85f7d95.jpeg)
Net income is just over 6000€ net per month. One full-time, one part-time, plus child benefit. Salary 2 is currently still in the probationary period and the contract is limited to 2 years. Salary 1 includes an on-call component, which fluctuates monthly and is currently rather high. It is possible that in 2 years' time the on-call component will decrease, but by then the basic salary will have increased further, so that no progression is achieved in total. I therefore do not expect salaries to make any great leaps in the next 2-3 years. A 13th monthly salary in the form of a bonus payment once a year is not included in the calculation. I don't want to include this in the monthly cash flow, but it will be included in the calculation at the end of the article.
Now to the expenses: It's mainly about the "living" part with the warm rent of €1812 plus electricity plus garage and parking space. The "housing" share of the net household income is 35%.
More than the recommended maximum of 30%.
If you rent, you have to invest to build up assets. We do this by putting €1250 per month into a deposit plus small amounts for old building society savings and life insurance. These are the rates we have calculated to close the pension gap and to have a nice high deposit in 30 years' time. With this invest 23% of the household net. Mind you, this is investing, not saving.
Then we have expenses for shopping, shopping, leisure, the child, the dog, insurance and the two cars. We had to buy a second car so that we could both go to work at all.
Regarding these expenses, it should be said that we have lived modestly below our means for the last 4 years. We currently pay less than €700 in rent, vacations aren't expensive and we get by with just one car. This has allowed us not to have to pay much attention to our other expenses. We eat out when we want, we don't look at the price when we go shopping. Additional payments for utilities, the garage costs for the car or the new cell phone were paid out of petty cash. And yet at the end of the month we still have >€1500 left over.
The Sankey above shows the cash flow if we continue to live as before, just swapping the apartment for another one.
The apartment...yes. We looked at it yesterday and it's an absolute dream. Four rooms, one for the child, a study, just as we had dreamed of. Underfloor heating, balcony, daylight bathroom, underground garage with e-mobility pre-installation. Location in a very nice residential area, kindergarten and high school within walking distance. Supermarket nearby. The landlord is a church pension fund, which will not go bankrupt and will not announce its own needs. We don't have to clean, shovel snow or take care of the garden. Mega! And we'll stay in the same city, we won't have to get used to new surroundings. The center of life for us and for the child remains the same.
However, we will still have significant moving costs. We need a new kitchen and will have to manage the move in general. We would also want to buy a lot of new furniture in the near future if this is the apartment we want to live in for the next 20 or maybe even 30 years.
What is the alternative if we don't take this apartment? We would have to keep looking for an apartment that meets our requirements, which has resulted in just two viewings in the last nine months. The supply is meagre, the requirements are high, as is the number of applicants, and the dog is a factor that should not be ignored, which further restricts the supply.
So far, I have only described the situation. But what is the question now?
If you list and calculate everything so nicely and do and do and do, then in the end the income of 6062€ is offset by expenses of 5671€. The expenses include everything that keeps the family going plus fun. That leaves around €400 per month.
So, from this remainder, we now have to save for vacations, new cars that are due at some point (not in the foreseeable future) and one-off special expenses, such as a new TV, a hobby for the child or new furniture. Calculated over the year, this share would amount to (400€*12 + the annual bonus of approx. 4000€ ) 8800€.
And here I'm wondering whether that's enough or whether it would be better to have more.
Are you overstretching yourself with the apartment or is that right? What do you think? Am I worrying too much and getting lost in the figures or should I listen to my gut feeling? Is it worth cutting back in other areas for the dream apartment? How do you do it? Is or was anyone else in a similar situation?
These are the questions that are bothering me and I now need the opinions of independent financial idiots who have nothing better to do than help a tortoise choose its new shell ♥️
Now a few more tags from people whose opinions interest me immensely: @DonkeyInvestor
@DividendenWaschbaer
@KapriolenCapital
@DerMartin
@GoDividend
@InvestmentPapa
@MLana
@KevinC