When planning the purchase of real estate, most buyers first look only at the purchase price and the loan conditions. And there's no question about it: these costs are an important aspect that can and should have a significant influence on the purchase decision. How much a freehold apartment will cost you depends, of course, on where it is located: in which state, in which city, and in which location within the city.

But your considerations should not stop at this point: Once you are the owner, you will incur not inconsiderable additional costs. In addition to the purchase price alone, there is the land transfer tax as well as notary and land registry costs. The running costs are also often significantly higher than for tenants. Unfortunately, most buyers underestimate this fact. These additional costs include the cost of electricity, heating and water, as well as other expenses such as property tax, house payments and reserves. You should pay particular attention to the house money. This additional monthly amount can put a considerable strain on your finances. You should therefore include it in your calculations before making your purchase decision.

What the house money is about

The house money is a monthly contribution that apartment owners pay to the manager of the building to which their apartment belongs. Among other things, this fee includes operating costs such as garbage, water and sewage fees, electricity and central heating, insurance for the building and the costs of janitors and winter services. In addition, there are management costs and the maintenance reserve. The money saved in the reserve is used to pay for repairs and other maintenance work on the building as soon as such work is required.

The property manager determines the exact amount of the house money in a business plan, which must be approved by the real estate owners' association. Among other things, the amount is influenced by the consumption of electricity and water, the age of the building and the equipment of the facility. Typically, the cost is 7.10 euros for buildings younger than 22 years, nine euros for buildings between 22 and 32 years old, and 11.50 euros for older buildings - in each case per year and square meter. For the reserve, you can expect a flat rate of around 250 euros per month.

How to find the right financing

If you want to buy real estate as an individual, you will most likely have to take out a mortgage loan to finance it. If you want to rent out the apartment, you can claim interest against tax. However, this is not possible if you want to move in there yourself.

On the Internet, you will find various portals that allow you to roughly estimate the optimal mortgage using a calculator, as found on the ACCENTRO International portal. Their financing calculator currently indicates that with a purchase price of 300,000 euros and equity of 60,000 euros, you can expect a monthly installment of just under 680 euros. The ancillary purchase costs - land transfer tax, broker commission and notary costs already included. However, these figures are only rough estimates and can change quickly.

The mortgage lender Interhyp constantly monitors interest rates and regularly updates its interest rate charts. The experts note that interest rates for real estate loans are currently at a record high. Specifically, the interest rates for ten-year loans were according to data from Interhyp at the beginning of October 2022 at around 3.8 percent. The historical comparison shows accordingly: The interest level approaches again the conditions before scarcely ten years. The experts recommend opting for the longest possible fixed interest rate. Such a fixed interest rate for 15 to 20 years is usually accompanied by an interest rate surcharge, but in return it gives you interest rate security in the long term.

If you want to pay off the amount you owe the bank as quickly as possible, you can make regular unscheduled repayments - of course, you should only do this if you can afford it. However, if you are able to do this, you will end up with less remaining debt. Many banks will allow you to make additional repayments of up to five percent of the original loan amount per year. This will, of course, incur additional costs for you as the owner, which you should take into account in your calculations.

Unbudgeted costs

What if a large bill suddenly lands on your desk that you hadn't expected? Unplanned additional costs can arise very quickly and at any time for apartment ownersIf, for example, a tree falls on the house during a storm and damages the roof, facade and/or windows, you will have to bear the repair costs - albeit only proportionally in the case of a freehold apartment - if common property has been damaged. The damages are covered by insurance. Also keep in mind that as the owner of an apartment in a residential building, you cannot influence some decisions on your own. For example, the homeowners' association may decide to renovate the roof. Even if you are against it: If a majority votes in favor of the renovation work, you will have to bear part of the costs.

You are not sure how to properly calculate the possible costs of your real estate or need help finding your dream apartment? Feel free to contact us if you are interested - as a reliable and experienced partner, we at ACCENTRO will be at your side throughout the entire buying process, helping you with any questions you may have and finding the property that best suits your needs.