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Ria

Question:

Hi Christian,
Thank you in advance for your kind advice you offer on my question!

We are expats, a family of 3(2+1 child). We are residing in Brussels since 3 years and have plans of staying in Brussels for another 5 years. We are planning to buy an apartment in Brussels and sell it after 5 years that is at the time we are leaving Brussels. Now, we are lost in deciding whether buying or renting an apartment is the best option for us.

Here is some paperwork we have done. We are not sure if our calculation is right or not. Kindly request you to help us with this.

(i) Currently, we are paying a rent of 1050 euros/month (including all charges).
(ii) We have seen a property worth 270.000 and we are planning to go for 100% mortgage loan from the bank.
For this loan amount, we end up paying 1.300/month as instalment.
After 5 years, we would have paid Capital – 58.000 and Interest – 17.500.

The money we might lose in this transaction:
Registration and notary charges – 23.000
Initial home setup(as we are buying empty house) – 10.000
Common charges of apartment for 5 years – 10.000
Assuming that after 5 years, if we sell for more or less the same price and considering the seller's tax which could be 2 to 4% of the total cost + notary fee - approximately 10.000
So, the total amount lost would approximately be: 70.500 and the only thing we would have saved will be the capital amount we have paid for 5 years which is 58.000. Still, we will be in a loss of 12.500.

So, is it best to pay 1050 as rent and stay in a rented house?

Thanks
Ria

by Ria on 30 Oct 2017
Christian Hasiba

This expert is currently inactive and not able to take new questions!

Answer:

Dear Ria

5 years is usually a short time for a profitable buy.

I fear in general your conclusion is correct. I only have two remarks to your calculations: there are no notary fees when you sell and no taxes on the sale if you were registered in the property.

Christian Hasiba

by Christian Hasiba on 01 Nov 2017

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