Sunday, February 19, 2023, 10:21 p.m
1181 readings
Image of the interior of a new home PHOTO capture YouTube
Prices of construction materials and housing have increased recently, as have bank rates.
Many Romanians postponed PLANS to build a house or buy a home, for fear that they will not be able to pay for it.
It is the topic of discussion launched by a young woman online. It also published some formulas that might help to find out PRICE which everyone can afford, depending on their income.
“How do you calculate the right price for a house? How much house can you afford? What should you pay attention to when you borrow?”, are the questions asked by her on the group Life and money.
“Calculations are a benchmark for not over-indebting yourself and not giving more money than it’s worth. Of course, everyone decides for themselves and family him depending on what is more important for everyone,” the author of the post stated.
“The market reality tells us otherwise”
In the comments, several answered the questions asked.
“These calculations represent like this, an ideal, hypothetical world. If everyone in your area is guided by other calculations (they are willing to allocate much more money from revenue monthly for the house/ rent) you can forget the calculus. You’ll be standing in the street waiting for that 48k apartment. It all depends on the behavior of those around you.”
“Unfortunately, the market reality tells us otherwise! This formula is no longer relevant. At current prices, over 30 years, you can calculate the recovery of the investment what do you want to do right now That’s because rents haven’t kept up with market growth immobility.
At the moment it is more profitable to stay in rent than investing in real estate.
I don’t think that the price of real estate will decrease (according to the presented formula), I think that the price of rents will increase in the future.
At the moment I’m looking to make an investment in real estate and I can’t find suitable real estate for a return higher than 4% annually.”
“I bought what I could afford (beat the formula), but the value of the market is a little far from the formula. Market price vs. the value of a possible rent are not correlated according to that formula. I think the period should be increased to 20 years.”
“The house you can afford is the one you pay for in a few years”
“The house you can afford is the one you pay for in a few years (4,5,6) and which, after that, you support from passive income. Otherwise, it’s just an illusion that you can afford it.”
“I don’t know who manages to build a house with 48,000 euros LAND with all. Some strange calculations. What “eminence” brought them out?”
“There are very few now in Romania which have this formula. Very low rents compared to the price usually, so many are overvalued according to this formula.”
“It looks good on paper, but the market says otherwise.”
“There is nothing like this on the market, immobile purchased today for €48,000 to generate rent of €330. That formula no longer corresponds to the market reality.”
“It exists, in hotel mode.”
“In the Cluj with 48,000 you can find real estate for hotel accommodation for puppies”.
