Ownings Vs Renting
I keep continuing to build my database of finds just in case I do happen to open a design shop in Hannover. I'm still thinking about it. I've saved money for shop ownership. Thing is, I don't have enough money to buy a flat AND invest in a shop. So I'm thinking of either one or the other.
Things I'd stock if I did decide on opening one... Bailey Doesn't Bark and Studio Violet.
And frankly, I'm terrified to purchase a flat -- I've never owned anything expensive really outside of my current car and my husband is super practical and doesn't see such a benefit in owning a home because so many of his friends rent. In the city, at least where he is from (Hannover), it's very normal to rent apartments and homes vs. buying them. Although his family once owned several Jugenstil villas in the List, they were located right on Lister Platz and I still visit them and drop by the courtyard to see his grandmother's former shop, now vacant and overgrown with weeds. I wish these homes were still in the family today, I would no doubt occupy one of them and revitalize her shop into my own. But dreams don't always come true now, do they?
So I'm thinking... should I rent an apartment and start a small shop and invest my money in that way, or should I buy an apartment and put the shop plans on hold? Anyone in Hannover or Germany in general know much about property taxes and owning a condo there?
Advice? :)
Comments
These are not easy questions to answer. Maybe renting to start might be best, on a month by month basis to ease into these decisions.
Also - renting is a German thing. When looking at apts some landlords were like, "our last tennant was only here for 12 years, can you believe it?! Then he died." geez. Our current landlord had a hissy fit when we told him we were leaving after 2 years. cry me a river.
I would think it's a buyer's market now with the economy such as it is. BUT who knows? Could you buy/rent anything that includes a large empty room seperately accessible that could double as a shop/workshop? I see some of that in our little university town, even in some of the surrounding dorfs. I'm sure something like that must be available in a city like Hannover. (I think anything is possible in a city with property, notice? =) Maybe that's my wishful thinking since it took over a year of hunting to find even what we're moving into now, and it's not our 'forever home' by any means!)
Plus you do have a huge clientele basis .. starting with a website too would help..
Good Luck in all you choose!
Renting is indeed very common in Germany: about 50 % of Germans rent. It's because renting is relatively cheap. The highest rates of ownership are in big cities, such as Munich, Frankfurt, etc., where there might be apartment shortages and high rents.
Here is some info on buying in Germany:
Fees: around 6-7% of the buying price, which comprises the transfer tax of about 3.5% and a notary fee of 1.5%. (You have to go through a lawyer).
The Real Estate Agent's fees is up to 5-6% (split between the buyer and seller.)
Property Tax
Around 1% of the rateable value. Non-residents are subject to wealth tax on property owned in Germany of around 0.5%.
Just some basic info. I hope it helped!
In general I think it's a better investment to own a place, but in Germany, things are a bit different. Why not invest in your shop first, and if it goes well, buy a place of your own later?
Good luck with making that decision, it's a tough one!
The second good thing is that you can do whatever you like with a house that's yours. Something you can't do with a house that's not yours. There are laws these days that you can change things as they improve the property but you'll not get anything back for it and you'll benefit your landlord instead.
You can always take out a mortgage and don't really need money of your own to get one, you just need a steady income. It's scary to start with but in the end it will do you right.
I think buying or renting are quite personal choices so I can only give you my choice. Hoped it helped :o)
Also, the property tax falls on the buyer (which is different to most countries) so that's another thing to consider.
You are probably better off renting and investing your savings in a business.
From what I can tell, you would probably make a big success of it and then you could buy whatever property you like :)
greetings from munich from maki
Owning here in the U.S. lets you deduct your mortgage interest, and your property taxes, so you could be paying more in a monthly mortgage, but receive the tax deduction which can make the cost lower overall.
What does Germany do? Does Germany have something like Small Business Loans? Even if you don't need or get one, some of their information may help you.
Good luck with whatever you decide to do.
Whatever you do I know you'll do with gusto and in an amazing way. I'm SO excited for you guys!
And so impressed.
What a wonderful new chapter for your lives!
xo
alex
I only say this as an FYI to file away. This affects private rentals, but also likely commercial. Are you two part of a Mietverein (Renter's Assoc)? If you, or somebody you know is, you could get a lot of rental legal-schmegal questions answered there, which is a good head's up if you're looking for long-term rentals and what you're rights are. We're not since my brother-in-law's kinda in the business down in Munich, so we get our info all unofficial as needed =)Actually, I'd highly recommend contacting one just so you're on the same page with how different standard issues are in Germany. I wish I had some kind of member's manual or something - it IS different over here!
No matter how long you live in your German apt, you still need give only 3 months notice (as you will on your phone, your utilities, your gym...)even if you had signed a 20 year lease. that happened to a friend who rented her house in Duesseldorf and 2 months later (as she settled for 2 years in the US) the tenants gave three months notice. It's even faster if you are transferred or get pregnant and don't have enough "legal" room, but I wouldn't depend on that:).
I'll be in Hannover in July to meet up with some other expats, if you are interested, drop me a line (or if you have tax questions you don't already know- we have had to deal with a lot of it already).
From a non-experienced standpoint, I'd say rent an apartment and invest in a shop. Hopefully the shop will go well and then maybe down the road you can invest in a home that you own.
My only question regarding your shop is your hope to add to your family next year. Little ones are SO much more work than I ever imagined! Do you want to spend your time tied to a physical shop or would running everything out of your home be a better option? (I liked one of the other comments about buying a flat/business in one.)
Anyways! I am super excited to see what you guys decide. It would be so cool if you could do a mini "house hunters" and show us the flats/business spaces you are looking at!
I have been browsing your archives and I really think you should write a book. You have so many innovative ideas and I think the world has so much to learn from you!
Hugs from Morocco!
As for buying there is the benefit of having something to sell or live in when you retire and that is not a small thing. if you have invested into the future and can live from that you can easily rent high scale apartments forever but if you don't...
And when it comes to the shop: follow your heart, follow your gut feeling. I would have done it if I hadn't three children. And in the future I will somewhere here on this planet - I still have dreams...
hugs,
yvonne/moline
I´m sure there are some amazing apartments for rent in Germany, since so many rent there.
If I was to open a shop I would find the area/location first - and then let people know I was interested in taking over the shop and take it from there - I totally believe in being at the right placa at the right time, serenedipity and laws of attraction! Good luck!
Yes, but not in Germany. Bank taxes for mortage are so high that you actually pax for TWO apartments at the end.
I would buy a shop, and with money made there starting to save for an apartment - it is expensive to use bank services here.
And even if you live for 10 years in one apartment, you can always leave due to the 3 month notice, it is gesetzlich vorgeschrieben.
Good luck!
I hope you we can order (we in germany) also online from your future shop, I would love that!