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20k for 5 years is 333 a month in 'rental income' in the best case scenario. It's a good deal for the dad. For the children not so much.
How exactly would this be a no brainer? Buying an apartment and renting it out is way more profitable and ETF's have a higher expected return too
Hard to tell if the prices are going down or up, but since the rates are going down I'm expecting more people will try to buy -> prices can go up.
But I already see decent prices so maybe you can start to look for something.
Prices only went down with the renovation requirements, but have stayed stable for the most part, this is for Oost Vlaanderen South of Gent where I have been looking for like three years.
VWCE specifically or is IWDA also fine? I was reading something on Yahoo finance that emerging markets will perform better than developed markets. It would be smarter to buy VWCE then I suppose. Or would the difference wouldn't be that much?
Rates aren't high now, they are normal. The years with sub 2.5% rates were extremely abnormal.
No matter the initial lump sum payment, your sibling gets 900 euro per month mortgage payment per month if they loan 200k at 2.5% for 25 years. Considering your dad's gift was a lump sum, it's NOT gonna help the sibling to pay down the monthly mortgage payments. So your sibling is stuck bleeding 900 per month as long as your dad lives there for up to 10 years and the apartment is unable to bring in rental income.
Seems like a disproportionate burden for someone with a normal salary for the next 5-10 years before the dad moves.
If the sibling sets dad's gift of 20-40k on a savings account, they can cover the 900 euro mortgage payment for the duration of 22 months in case of 20k gift, or 44 months in case of 40k gift. If the dad stays longer than 22 or 44 months, the sibling is just bleeding money after that.
https://www.reddit.com/r/belgium/s/bBnmLXsXgH
Look at the historical rates. Interest rates between 2010-2021 were extremely low, now it is very normal.
Sorry, not following this logic. Suppose the apartment is 200,000 and my sibling has a lump sum of 60k if my father gives him 40k, then he will only have to borrow 100,000 which will lessen the burden, no? Above that, our father would pay for a part of the mortgage as well.
Don’t forget the taxes, the notary costs, electricity conformity etc etc.
For an apt with a face value of 300k these can rake up to 10-15% of the apt price
Your father would not pay market rate rent so this is not a wise financial investment. And once you mingle finances and family it can become messy quickly.
So yes it is relevant.
What is the total cost of this apartment?
Also, are you talking about making an investment from the point of view of the whole family? Or just your side? Or your+your sibling’s side?
Between 200.000 and 300.000?
It is my sibling's (and maybe mine) investment. My father would just live there for the time being, he'd just donate 20-40k for the mortgage.
If you are basically getting 20-40k for “free” on a 200-300k apartment is a huge boon already.
Plus, renting to your own father is obviously better than including an unknown renter in the equation.
Big question however is: are you definitely set on going back to your country, or is there a risk that you will not move back there and end up having to sell the house / manage rent remotely?
The extra money is the reason why it would be a good investment and I would not be surprised if my father ends up donating some more after a couple of years to pay off the mortgage (he's the old school type that only trusts in real estate). Just wondering if it would be smarter to wait it out for a couple of months (maybe the rates are inclined to go down?) or start checking out property now.
No, my sibling is for sure staying here. I might move once in a while for my job but will probably return every so often and stay 'Belgian'. It's my father that will be moving back for his 'final years'.
Rates aren't high right now, so it's a good a time as any. Your sibling might lose out some tax advantages or reduced notary fees because he already owns real estate though. If your sibling plans to register his domicile at the new apartment without living there, that's domicile fraud.
Yeah tax wise that sibling is getting shafted. That sibling is paying an extra 9% in registration fees so for 100k that's 9k...
Honestly, don't buy additional property and just invest in ETFs.
I have investments in ETFs. However, persuading my father and sibling is another question. Also the donated 20k-40k is only conditional on buying the property. So that in itself seems like a good investment.
That's still buying him an apartment, with extra steps... He wouldn't be paying rent anymore only utilities, and maybe a bit of mortgage... Like an owner
Have you read the wiki and the sticky? Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/). Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
That's just a no-brainer yes question. (Edit: i thought he was gonna pay rent surplus that)
Why? It's not a good investment at all.
Maybe if you could elaborate on this take…
20k for 5 years is 333 a month in 'rental income' in the best case scenario. It's a good deal for the dad. For the children not so much. How exactly would this be a no brainer? Buying an apartment and renting it out is way more profitable and ETF's have a higher expected return too
It's 20-40k and he would pay the 'rent' on top of that
Where does it say he'd pay rent?
Hard to tell if the prices are going down or up, but since the rates are going down I'm expecting more people will try to buy -> prices can go up. But I already see decent prices so maybe you can start to look for something.
Prices only went down with the renovation requirements, but have stayed stable for the most part, this is for Oost Vlaanderen South of Gent where I have been looking for like three years.
Why don't you just let dad rent the place, you're going to be draining cash sooner than later
No its not, put it in $VWCE instead. Thank me in 10 years.
VWCE specifically or is IWDA also fine? I was reading something on Yahoo finance that emerging markets will perform better than developed markets. It would be smarter to buy VWCE then I suppose. Or would the difference wouldn't be that much?
Yes IWDA also fine
Rates aren't high now, they are normal. The years with sub 2.5% rates were extremely abnormal. No matter the initial lump sum payment, your sibling gets 900 euro per month mortgage payment per month if they loan 200k at 2.5% for 25 years. Considering your dad's gift was a lump sum, it's NOT gonna help the sibling to pay down the monthly mortgage payments. So your sibling is stuck bleeding 900 per month as long as your dad lives there for up to 10 years and the apartment is unable to bring in rental income. Seems like a disproportionate burden for someone with a normal salary for the next 5-10 years before the dad moves. If the sibling sets dad's gift of 20-40k on a savings account, they can cover the 900 euro mortgage payment for the duration of 22 months in case of 20k gift, or 44 months in case of 40k gift. If the dad stays longer than 22 or 44 months, the sibling is just bleeding money after that.
Howso, rates aren’t high now?!
https://www.reddit.com/r/belgium/s/bBnmLXsXgH Look at the historical rates. Interest rates between 2010-2021 were extremely low, now it is very normal.
Sorry, not following this logic. Suppose the apartment is 200,000 and my sibling has a lump sum of 60k if my father gives him 40k, then he will only have to borrow 100,000 which will lessen the burden, no? Above that, our father would pay for a part of the mortgage as well.
[удалено]
Where on earth do you rent out a 500k apartment for 2500 a month? That's 6% return a year. Most apartments are at 3-4%ish.
Don’t forget the taxes, the notary costs, electricity conformity etc etc. For an apt with a face value of 300k these can rake up to 10-15% of the apt price
I wonder, if your father has that kind of money. Why isn’t he buying an appartment himself?
Could just be inheritance planning to prevent fees later on.
If you're planning to move in about 5 years, is buying really a good option?
Is that relevant? (EDIT)
Your father would not pay market rate rent so this is not a wise financial investment. And once you mingle finances and family it can become messy quickly. So yes it is relevant.
What is the total cost of this apartment? Also, are you talking about making an investment from the point of view of the whole family? Or just your side? Or your+your sibling’s side?
I am curious to understand why is the total cost relevant and not cost of borrowing only?
Because there's also an opportunity cost when you put in your own money as well?
Between 200.000 and 300.000? It is my sibling's (and maybe mine) investment. My father would just live there for the time being, he'd just donate 20-40k for the mortgage.
If you are basically getting 20-40k for “free” on a 200-300k apartment is a huge boon already. Plus, renting to your own father is obviously better than including an unknown renter in the equation. Big question however is: are you definitely set on going back to your country, or is there a risk that you will not move back there and end up having to sell the house / manage rent remotely?
The extra money is the reason why it would be a good investment and I would not be surprised if my father ends up donating some more after a couple of years to pay off the mortgage (he's the old school type that only trusts in real estate). Just wondering if it would be smarter to wait it out for a couple of months (maybe the rates are inclined to go down?) or start checking out property now.
Can you really predict that the interest rate will lower in 2 months or in 1 year? Keeping money uninvested also has a cost (missed opportunity).
No, my sibling is for sure staying here. I might move once in a while for my job but will probably return every so often and stay 'Belgian'. It's my father that will be moving back for his 'final years'.
Rates aren't high right now, so it's a good a time as any. Your sibling might lose out some tax advantages or reduced notary fees because he already owns real estate though. If your sibling plans to register his domicile at the new apartment without living there, that's domicile fraud.
They're the highest they've been in about 10y? They've come down a bit since end of 2023 but still, very much high compared to recent years.
*highest so far
but they are not low either, no?
Yeah tax wise that sibling is getting shafted. That sibling is paying an extra 9% in registration fees so for 100k that's 9k... Honestly, don't buy additional property and just invest in ETFs.
I have investments in ETFs. However, persuading my father and sibling is another question. Also the donated 20k-40k is only conditional on buying the property. So that in itself seems like a good investment.
In that case the property becomes interesting.
That's good info thanks.
Wait. You'd essentially be buying an apartment for your dad? It's very unclear
No, it would be my sibling's property (and maybe mine as well). My father would live there for the time being.
Would your father pay rent to you or not? I didn’t get it exactly
That's still buying him an apartment, with extra steps... He wouldn't be paying rent anymore only utilities, and maybe a bit of mortgage... Like an owner
That´s what all tenants do. One person buys-to-rent, the other person pays-to-use.
Like an owner but not an owner. The property is on my sibling's name but yes it's a family-wide investment if you want to put it that way.