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

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

#361

Post by fegu » Tue, Oct 25, 2016, 6:12 AM UTC

wavefunction wrote: post #159

cm2187 wrote: post #130

Earlier quoted context omitted.

> Namely, it is very difficult to raise a family of four in a mutual fund. It is difficult to ski without skis. But most people don't buy skis, they rent them. Renting skis do not mean that no skis will be manufactured. There is a need for house, houses will be constructed, irrespective of whether people will over-bid on them or not. > A paid off home is a social safety net against homelessness Stocks and savings are…

Most people don't go skiing every day or enough to justify the cost of purchase, but for those who do they most certainly purchase one or more pairs of skis.

Can confirm. Living in Norway. Everyone has skis.

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

#362

Post by ygra » Tue, Oct 25, 2016, 6:13 AM UTC

mahyarm wrote: post #317

weinzierl wrote: post #223

Earlier quoted context omitted.

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?

Can be hard to fight for a landlord. Since tenancy is a very asymmetric contract (since one party's livelihood depends on having a home and the other party is merely inconvenienced if there's no tenant), tenants have vastly more rights than landlords.

Terminating a contract can be done if the tenant is behind at least two monthly rents in payments, or if the landlord has personal interest in the property (Eigenbedarf), which is also rather strictly regulated, though (also won't ever happen when your landlord is a company). I'm sure they could terminate your contract if the tenant actually destroys the place. However, they first have to be aware of it (it's not typical of landlords coming to visit, and if neighbours don't complain things can go unnoticed). So usually they won't notice until they move out, although they're liable for the damages caused. The security deposit won't usually be enough to cover extensive damage, though, as it's in the order of two or three monthly rents.

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

#363

Post by pvdebbe » Tue, Oct 25, 2016, 6:15 AM UTC

criddell wrote: post #346

Grishnakh wrote: post #319

Earlier quoted context omitted.

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…

What do you do with your old oil?

Not gp, but I store the old oil in a closed can, back of the shed. While usually there's a waste management charge for oils, in Finland there are occasional events when it's free to deliver oils and whatnot. So I take the few cans then.

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

#364

Post by pvdebbe » Tue, Oct 25, 2016, 6:26 AM UTC

nommm-nommm wrote: post #194

riprowan wrote: post #126

Earlier quoted context omitted.

> 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…

>1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles. Even if all of them are unemployed, all of them have a roof over their heads. Until you can't afford to pay the taxes, utilities, insurance, and maintenance. My grandma bought her house outright with my grandpa's life insurance money. No mortgage ever. It was a terrible choice because she didn't have…

I was happily living in an owned home, paying off the mortgage (with very low interests mind you!) but I ended off selling it, and staying resident as a tenant for the buyer!

Reasons aside, while my monthly expenses have increased a bit (not terribly much) I've been much happier and care-free now. The hundreds that I would put away for inevitable fixups and maintenance, I can now put in stocks, index funds. I personally can't hold the hammer the right way in my hand so it's been costly.

It's not customary in Finland to take second mortgages against house so having money in stocks is vastly more easily liquidable as well.

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

#365

Post by paganel » Tue, Oct 25, 2016, 7:05 AM UTC

pjlegato wrote: post #324

paganel wrote: post #306

Earlier quoted context omitted.

> Until you can't afford to pay the taxes, utilities, insurance, and maintenance The utilities it's what gets to you first. My parents used to be middle-class people in the late-1990s Eastern Europe until they both lost their jobs when the one big steel-factory in my home-town got closed down. In a matter of a just a couple of years they had to sell our family car and our city apartment (where we were all living), be…

> Western country... very big societal changes... It's already happened. Contrary to popular belief, Western countries are not uniformly rich and successful places where everyone drives a Ferrari and owns three houses. This stereotype is really annoying to those of us who suffered through the industrial collapse and saw the society of whole regions destroyed (larger than most eastern European countries.) * https://en…

I know about the Rust Belt meltdown and also about what happened to Northern England and Scotland during the Thatcher years, but trust me when I'm telling you that high inflation and the whole damn country (nor merely a region) being on the brink of collapse feels at least a hundred times worse.

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

#366

Post by tdullien » Tue, Oct 25, 2016, 7:23 AM UTC

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…

In which way is paying returns on the investment to build housing unproductive, but buying Disney stock is productive?

I think you are measuring with unequal yardsticks here.

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

#367

Post by usrusr » Tue, Oct 25, 2016, 7:42 AM UTC

mioelnir wrote: post #330

pchm wrote: post #144

Earlier quoted context omitted.

Can you elaborate a little more on the "company car" thing? It sounds interesting. Does it mean that you basically get a car from your employer as part of the job benefits, but in reality you cover the cost (which is deducted from your salary)? How does it work?

If you have a company car that is free for full personal use, driving around, on holiday etc. then the car is paid for and given to you by your company. Insurance, service and often gas is paid by the company. On the flipside, 1% of the car's list price as well as 0.03% for every km distance between your residence and place of employment is taxed per month. So for 20km distance, it would be 1.6% of the car's list pri…

Thanks, much better explanation than mine.

To readers that might think otherwise: while this certainly is a powerful setup to give Tesla a hard time in the market (if you only paid personally relative to initial cost, nothing at all for consumables, would you still want to go electric?), it clearly predates them. I have personally (and legally, I was told) burnt company fuel in "daddies car" (which he did not own) back in the 90ies.

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

#368

Post by LeanderK » Tue, Oct 25, 2016, 8:41 AM UTC

pjlegato wrote: post #329

LeanderK wrote: post #29

I am a German CS-Student and currently renting in a shared flat with 4 other students. We call it WG (living-community) and its really popular not only with students, but i know a lot of young professionals and even middle aged ones that share an apartment (it gained popularity in the 60s, so i think its more of an culture thing that older do not share a flat). If you are in a partnership, you can move out and share…

This is called "having roommates" in the US, and it's quite common, especially among students and younger people.

thank you. I googled 10 minutes for a translation, but since its not a direct translation it was really hard to find.

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

#369

Post by expertentipp » Tue, Oct 25, 2016, 10:26 AM UTC

premium-concern wrote: post #139

rmc wrote: post #64

Earlier quoted context omitted.

> Serious question: Why is it not very popular in other countries? Because some countries have much, much worse tenants rights. I moved from Ireland to Germany and in Ireland: * There is basically no protection for rent increases, some people are being told their rent is increasing by 50% * Can't change your apartment. Not allowed to paint the walls, nearly all come with furniture, better make sure you don't damage a…

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…

> Many landlords are happy if you want to paint the walls etc., though.

Many landlords scam tenants into "refreshing" costs of the apartment. The cost of the lawyer to litigate is accidentally of the same order of magnitude as the cost of the "refreshing" so many tenants just give up (unless their daddy is a lawyer).

> The deposit has to be put on a special, locked bank account. The money can only been withdrawn if both sides tell the bank in writing that the rent contract is over

Not in high demand areas i.e. any major city including Berlin.

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

#370

Post by jobigoud » Tue, Oct 25, 2016, 11:06 AM UTC

Normal_gaussian wrote: post #28

The only liberty that renting provides is the protection from the whims of the housing market. Aside from that it takes liberties right left and centre. I cannot structure my house and life as I want from painting and shelving through pets and kitchen appliances. I cannot fix something without causing a hassle and days off work. I cannot register a business here. I am at the whim of my landlord. Renting in the UK is…

That's weird. In France if you rent you are allowed all non-structural changes: paint inside walls, change floor surface, drill holes (must be filled back in when leaving), have pets, choose kitchen appliances (most units come without any). You can also register a business to some extent… I would have thought the UK would be typically more flexible in these matters.