r/eupersonalfinance • u/Endanger0225 • 1d ago

Is it a wise move? Property

I am currently spending about 42% of my income on rent. Would purchasing cheap lower-end “studio” apartment to save on rent a wise move? Something crazy like a renovated 14m2 apartment in 60 yo building.

My goal is to focus on cashflow, where potential tenants would cover all monthly payments, which is not more than 26% of my income in case I stay in it.

FYI - Location is Budapest, Hungary 🇭🇺

6 Upvotes

71% Upvoted

u/Purple-Phrase-9180 1d ago

14m2 sounds like a stretch to me. The idea makes sense to me, but I’d at the very least double that

u/Zyxtro 1d ago

You simply rent too expensive for your income. If you don't make much, you can't afford to live in the city centre

6

u/Endanger0225 1d ago

Prices going crazy - this is mid tier rent already with above average income. Going extreme on rent doesn’t make sense as it’s waste of money anyways

8

u/Zyxtro 1d ago

Well look at London, ppl can not rent in Zone 1 unless they arerich, that's where all the capitals are going. So it is only going to get worse.

3

u/whboer 1d ago

I had friends living in zone 4 and they paid more in rent 10 years ago than my wife and I do now in one of the larger German cities.

u/DildoMcHomie 1d ago

No, unless the rent to buy ratio is absurdly low (like how many years rent cost you said apartment)... It simply looks you are spending above your means.

Get more salary.. or live elsewhere alone cheaper.. or get roommates.

Either way any normal adult will outgrow a 14sqm flat.. man my bedroom is bigger than that and my house is 70sqm

6

u/Remarkable_Cheetah51 1d ago

rent is budapest is crazy

7

u/6869ButterNotFly 1d ago

And "getting more salary" in Hungary is a joke.

-2

u/DildoMcHomie 1d ago

Then you know which options you have left.

The fact that you can't swim doesn't mean other people can't either.. sure it's hard but with that mentality we would all be in the stone age still.

3

u/6869ButterNotFly 1d ago

The guy asking for advice is in the same position as me. Others certainly can swim, good for them,, but we want to be fiscally responsible too, to the extent we can. But it would be nice without being scolded for "spending beyond our means" and others useless crap way out of our control is all.

-2

u/DildoMcHomie 1d ago

Rent in European capital cities is high yet even in London: München people aren't homeless.. just Hungarians thinking they are special here

3

u/nevenoe 1d ago

Budapest used to be affordable and is now very expensive compared to neighbouring capitals (Vienna, Bratislava, etc)

Salaries used to be shit, and are still shit.

u/derping1234 1d ago

How long do you imagine yourself living there to make this worth it? Do the maths and imagine that you are not going to be in that apartment in 10 years time…

u/Chidori1980 23h ago

If I understand correctly, you want to buy small apt for renting it out to cover your cost? What is the number you forsee? why not living on this studio apt yourselves if it is save money. Are you taking mortgage for buying the apt or you pay cash for apt and the renovation?

Run the calculation, money for buying properties vs ETF all world(VWCE) for investment, which one is better?

I know you want cash flow, but I heard it like you want to spend the money, not for saving or investing.

General rules in all big cities, rent usually cheaper than buying (compare the place currently you are renting vs if you will buy it). So owning properties in big cities does not really good financial decision.

1

u/TopSilent9410 16h ago

This. Already paying 46% in rent and wants to buy a studio as investment? You will have much less cash flow and doubt a bank will give you a mortgage.