Most Germans don’t buy their homes, they rent • Hacker News Board

Re: Most Germans don’t buy their homes, they rent

#311

Post by chrisper » Mon, Oct 24, 2016, 9:58 PM UTC

wott wrote: post #287

coldtea wrote: post #48

Earlier quoted context omitted.

They are used all over the world, including in France. Not sure what are you talking about... Except if you live in some rural area...

We never use them as credit card in France. It took me a loooong while to understand, when I lived abroad, why the cashier would always ask me a question when I used my card to pay. In fact I understood later that they were asking if I wanted to use debit or credit. And that felt really odd to me. And it still does. I still don't know what would have been the point to make a loan to buy a bag of potatoes, but well...…

The loan comes with a lot of benefits. (e.g. point rewards, protection, etc.). Why is it bad if you loan money if you can pay it back right away? I am sure you have asked your friends for money once when you were out and ran out of cash just to pay them back later that evening?

Re: Most Germans don’t buy their homes, they rent

#312

Post by ythl » Mon, Oct 24, 2016, 10:01 PM UTC

eloisant wrote: post #217

cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

Well rent doesn't create any wealth either, you're just paying monthly a landlord so he doesn't have to work. If you want to create value, you should make sure that housing prices (both renting and buying) stay low. This way not only wealth can go to other investments, but more people can take the risk to start a business if they don't have the risk to be unable to pay their rent or mortgage.

Being a landlord sucks, you don't know what you are talking about. Tenants are terrible for wear and tear on your house. Since they don't own the house they don't treat it with care. Lots of maintenance and tenant problems that need solving.

Re: Most Germans don’t buy their homes, they rent

#313

Post by chrisper » Mon, Oct 24, 2016, 10:01 PM UTC

androidfox wrote: post #310

I think in small cities people still buy houses. When they cannot afford the price they rent. Or is there really some strong reports that this happens in Germany only

Yes, I agree with you. Reading the comments here seems weird to me, because where I grew up owning a house is pretty much normal. I grew up in Southern Germany where there are a billion small towns. So most people are owning for sure and not renting. This may not be true in large cities, like Munich or Berlin.

Re: Most Germans don’t buy their homes, they rent

#314

Post by sigstoat » Mon, Oct 24, 2016, 10:03 PM UTC

riprowan wrote: post #126

cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

> There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds). I beg to differ. I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain. Namely, it is very difficult to raise a family of four in a mutual fund. Investing in a home may is absolutely "productive." See, there are sign…

> 3. Real estate can be borrowed against. Try that with stocks.

if you're using a taxable margin account(1), your broker will almost certainly be happy to let you borrow some fraction of your stock's value as cash, without any paperwork. depending on the value of your account and the amount being borrowed, the rates might even be decent, compared to a HELOC. (after all, their risk is a lot lower, as they can liquidate your stocks on a moment's notice. much easier than foreclosing on a house. and while you're in debt to them, they can loan your stocks out to other people, which is valuable to them.)

(1): holy crap don't sign up for a margin account without fully understanding what you're doing.

Re: Most Germans don’t buy their homes, they rent

#315

Post by paganel » Mon, Oct 24, 2016, 10:05 PM UTC

krautsourced wrote: post #247

kriro wrote: post #37

Earlier quoted context omitted.

Pretty much agreed. My rather simple (and completely argumentative) explanation is that Germans generally are less enthusiastic about taking on debt to finance things. Psychologically I'd say it's rooted in the fact that the results of hyperinflation are very much in the minds of people and there's a tendency of "don't borrow if you can save for it". Since the only realistic option for buying houses is taking on debt…

It's not about inflation, since inflation is actually good for you if you're in debt (as your debt is not adjusted to the inflation, your debt is effectively shrinking by the inflation). People are still buying and building houses here, especial in rural areas. It's mostly the cities where things simply have become unaffordable for most people.

> It's not about inflation, since inflation is actually good for you if you're in debt

Like with many things, the devil is in the details. I'd say a 1 to 5% inflation rate is preferable, a 5 to 10% inflation is livable rate, 10 to 20% is starting to get tense, more than 20% and then everything is suddenly more expensive and you risk don't having money to get you through the month. Yes, some of your nominal debt might go down, but, then again, you still probably have to buy gas every couple of days (which is most probably imported, so its price has gone up), with more expensive gas comes more expensive merchandise (things like food, clothes and the like) because carrying stuff around consumes gas, your heating and electricity bills will also probably double of triple in value in a matter of a couple of years, and so on and so forth (not to say that you can forget about more-than-basic stuff like having a vacation abroad).

Re: Most Germans don’t buy their homes, they rent

#316

Post by justincormack » Mon, Oct 24, 2016, 10:12 PM UTC

cesarbs wrote: post #303

eloisant wrote: post #217

Earlier quoted context omitted.

Well rent doesn't create any wealth either, you're just paying monthly a landlord so he doesn't have to work. If you want to create value, you should make sure that housing prices (both renting and buying) stay low. This way not only wealth can go to other investments, but more people can take the risk to start a business if they don't have the risk to be unable to pay their rent or mortgage.

> paying monthly a landlord so he doesn't have to work. Try telling that to a landlord. Being one is a job in itself - or you have to pay someone else a good chunk of money to do the work for you.

That's because it is an amateur business with people doing it in a way that does not scale. Large scale renting is vastly more efficient.

Re: Most Germans don’t buy their homes, they rent

#317

Post by mahyarm » Mon, Oct 24, 2016, 10:12 PM UTC

weinzierl wrote: post #223

premium-concern wrote: post #139

Earlier quoted context omitted.

In Germany: - Rent increase limits - Larger changes need landlord's approval (changing walls and stuff). A lot of smaller stuff can be done on your own and doesn't require asking the landlords. (Many landlords are happy if you want to paint the walls etc., though.) - Only smaller apartments (often intended for students) come usually with furniture - The deposit has to be put on a special, locked bank account. The mon…

Two more: - Temporary leases for residential properties are only allowed in very special circumstances - For the landlord termination is almost impossible Tenancy law is very one-sided in Germany which leads to a high vacancy rate for residential properties (around 5% [1]). That doesn't mean that there is no housing shortage at the same time. [1] https://de.statista.com/statistik/daten/studie/258767/umfrag...

How does germany deal with the crazy tenant that destroys the place but still pays their rent? Is it an expensive and long drawn out process involving eviction court or is the security deposit very substantial?

Re: Most Germans don’t buy their homes, they rent

#318

Post by Grishnakh » Mon, Oct 24, 2016, 10:16 PM UTC

ythl wrote: post #312

eloisant wrote: post #217

Earlier quoted context omitted.

Well rent doesn't create any wealth either, you're just paying monthly a landlord so he doesn't have to work. If you want to create value, you should make sure that housing prices (both renting and buying) stay low. This way not only wealth can go to other investments, but more people can take the risk to start a business if they don't have the risk to be unable to pay their rent or mortgage.

Being a landlord sucks, you don't know what you are talking about. Tenants are terrible for wear and tear on your house. Since they don't own the house they don't treat it with care. Lots of maintenance and tenant problems that need solving.

That's one good thing about large-scale home-ownership: people tend to take better care of things they own, so overall costs to society for housing may be lower that way. It also makes people more invested in their communities, in theory.

I was a landlord for a while during the realty boom. It really did suck. However, it varied wildly by tenant: some tenants took good care of the place, others didn't. So when a tenant left and I had to get a house ready to re-rent, some were a relative cakewalk, while others required a ton of work (like one idiot who drilled a bunch of giant holes in the walls for cables for their A/V equipment).

The worst part about it was being on the hook for major repairs, and having them happen at unpredictable times.

Re: Most Germans don’t buy their homes, they rent

#319

Post by Grishnakh » Mon, Oct 24, 2016, 10:21 PM UTC

aianus wrote: post #191

Jtsummers wrote: post #169

Earlier quoted context omitted.

If you strictly want to maximize your money , you're probably making the best choice for yourself. For many of us, time with family, friends, hobbies, is a relaxing and physically/mentally/emotionally healthy thing to engage in, rather than trying to exploit every waking hour for income.

So instead of spending time with the family, friends, and hobbies you'd rather slave away in front of a stove to save $600/mo?

So you'd rather spend all your time in the evenings transiting to a restaurant, waiting around for a table, waiting around for your order to arrive, getting hurried by the server so they can get a new customer in, then transiting back home?

Eating out at a nice sit-down restaurant takes a huge amount of time. I can cook myself a meal at home and eat it in much less time than going out.

The only way it's faster to eat out is if you get fast food takeout, which is absolutely shut nutritionally and will put you into an early grave.

You sound like all the dummies who think I'm wasting time by changing the oil in my car myself. It takes me less time than making an appointment, driving all the way to the dealership, then sitting there and waiting for them to do the work (which probably takes longer than me because they have a bunch of cars to work on and their scheduling isn't perfect, just like a doctor's office), then driving back home. I can do it myself in my garage in 15 minutes. I can't even drive to my nearest dealership in that time. On top of all that, you have to figure how much work time I'm missing in the process, since auto shops aren't open weekends or evenings usually (and especially not dealerships).

Re: Most Germans don’t buy their homes, they rent

#320

Post by gsnedders » Mon, Oct 24, 2016, 10:22 PM UTC

hx87 wrote: post #252

thatfrenchguy wrote: post #136

Earlier quoted context omitted.

I meant people use debit card instead. Sure, I can use my us credit card in France after te weird you-need-a-signature-? look, but no-one has credit cards there :-)

> Sure, I can use my us credit card in France after te weird you-need-a-signature-? look I thought chip-and-PIN was the standard over there?

Cards without a chip require a signature; cards with a chip have their own preference as to whether they prefer chip-and-signature or chip-and-PIN (i.e., it's a preference of the card, not the terminal).