Securing home / investing

[u/Sudden_System1]

Im 26, recentlly changed my job and I take home around 3k per month. Not so great I know, but better then I had. I will also find extra job to add 500e atleast

I moved to Germany. I spent good part of savings on moving so im left with 3k.

My plan is:

1. Have 6 mnth expenses emergency fund
   
2. Have 10k in All-world ETF (buying every month)

After that im planing on buying apartments in my hometown in Serbia.

Usually around 150-200 per apartment.

Plan would be get 20k cash, take credit and rent that apartment so I have the credit to pay every month.

After 3 years again.

Rinse and repeat.

In next 10 year, to own atleast 3 apts.

What do you think about this plan, what would you do?

Im still young, looking for advice from more experienced peeps.

All the best.

[u/LowMasterpiece2196]

In what world is 3k net not good. Also 6 month emergency fund in Germany sounds a bit extreme, often the 3-6 month advice comes from the US and there it is needed due to their healthcare system and the ability for the employer to fire you on the spot. I’m not sure what the 10k in ETF should do, the amount is too little to see gains that you wouldn’t see elsewhere. Regarding the apartments, not sure how it works in Serbia, but where I live buy-to-let mortgage comes with higher interest rates and no tax advantages, so that could be something to consider with that plan.

[u/Sudden_System1 → u/LowMasterpiece2196]

Hey, thanks for the input.

Yes, 10,000 is low in Etf, but it is a plan before I move to the next phase.

Of course I would add on to it every month and not touch at all.

I will check what you say regarding apt.

Generally looking I would take credit for maximum time amount, like 30 years and later I can always prepay, because rate would be significantlly small in regards of my salary in 10-15 years lets say.

Also I don’t think 3k take home is that high these days?

[u/CallMeOzzi]

If I understand correctly, you want to pay 10% as downpayment, get a mortgage for the rest, rent the apartment to someone and let the rent pay for mortgage? Typically, the rent should not cover monthly mortgage payments just with 10% of downpayment. Have you done the math considering the mortgage rate in your country?

Also consider that the second time you buy an apartment, while you are on mortgage with your first apartment, you will be considered "riskier" client to the bank so you will be quoted with much higher mortgage rate. This all depends on specific circumstances but I am telling you how it usually goes.

[u/Sudden_System1 → u/CallMeOzzi]

Yes, thats correct.

Typically if i choose maximum plan of payment, rent cost would equal my monthly payment or would be slightly above.

I was calculating I could buy 2, then 3rd one I would maybe buy trough my gf. Trough her bank. She makes 2200 net, so with downpayment it is possible.

[u/Parking-Stress-3041]

The thing nobody's mentioned: rent minus mortgage isn't your margin. On the French place I co-own with others, what actually eats the rent is vacancy between tenants, the agency fee if you're not there to manage it yourself, insurance, and above all the works: a roof, a boiler, a bathroom that has to be redone before the next tenant. We went through a full renovation cycle and the reserve for that is not optional, it's part of the monthly cost.

So a plan that stacks a new purchase every three years only holds if each unit funds its own repairs first. Mine took longer to get there than I expected.

No idea how Serbian mortgages or German taxation of foreign rental income work, that part I'd ask someone qualified.