10Mes¡

Sale to raise equity capital


As we are about to start the house project, I have held another sale to generate equity.


Since my handyman skills are about the same as those in the GIF, personal contribution / muscle mortgage will help us very little. Therefore, the deposit has to be attacked on a smaller scale.


However, the emphasis is really on "on a smaller scale" - all in all, I'm trying to keep the equity as low as possible and take out more credit and encumber the deposit as little as possible.


There are certainly enough opinions on this and the argument that the interest expense saved represents a tax-free, risk-free return is entirely justified.


For me, it is a "yield bet". The market yield is around 10% p.a. nominal, i.e. excluding the effects of inflation. With an interest rate of just over 3% for building loans, it would be a bad deal for me to liquidate my deposit for this.

If something changes after the fixed interest rate and the interest rate on the loan is 8%, for example, you can always switch in the future.


As we all know, the accounts are settled at the end.


#etfs
#immobilien

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immagine del profilo
10Mes
In principle, I would agree with these considerations.

But since when has the market yield been 10%pa? More like half.
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immagine del profilo
Everything done right. If you want to live in your own home, it makes the most financial sense to invest as little equity as possible and to aim for the lowest possible monthly payment, even if it takes 45 years to pay off (any money saved must of course go into the deposit). Here are a few more coins for the donkey stable in the garden
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immagine del profilo
Good luck 🍀
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immagine del profilo
@christian Thank you! :)
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immagine del profilo
The decision can also turn out like the GIF 😏
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immagine del profilo
@Pezi absolutely! That's why the accounts are settled at the end.

However, the interest rate is fixed for the time being, so something can only go wrong if the nominal return on the markets is below 3%. Then it would be better to save the interest costs.

If the interest rate is, for example, 10% after the fixed interest rate, you can still throw everything out of the deposit and reduce the remaining debt.

I therefore see the main risk as being that the market yield will be significantly lower in the next few years. It can happen, without question. But I remain optimistic here :)
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immagine del profilo
@Mister_ultra is like many decisions in life.... you only know whether it was good or bad later...
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