2020 is upon us! As I did last year, I will try to aim for certain milestones on both a personal and financial level. I already went over my 2019 milestones, which let us be honest, was so-so. But if I can learn from this and do a better estimation this year then it was worth it to make them.
Post Series: Road to home ownership
- 1.Starting my journey towards my own home
- 2.Should I buy or rent my first home?
- 3.Hotel room investments aren’t all-inclusive
- 4.Apartment here, apartment there
- 5.The big move and moving around
- 6.My mortgage: an interesting experience
- 7.Apartment progress: 5%
- 8.How one tax deduction reduced my apartment cost by 17K
It’s been a tumultuous two weeks. As you know I’ve been searching for my first home. I started that search 4 months ago and the original plan was to move in once I found the perfect fit. While I originally intended to take more time, I recently made two major decisions that turned my slow approach into a rapid one.
From the title, you might guess. Yep, I found an apartment and even signed an agreement. Not only am I the owner of a new apartment that will be constructed in the coming year and a half, but me and my girlfriend will also move in together in a rental apartment this September.
No matter how you look at it these two decisions have a major impact on not only my situation but also on my finances.
The biggest financial impact is due to the purchase of my apartment. I bought one “on plan” as it is called (see inset for explanation), in the center of Brussels.
As it’s a large financial commitment, I’ll have to take a mortgage on it. I’m lucky to have two financial benefits:
- Support from home: so I don’t have to take out a large loan relative to the total cost of the apartment.
- Low long-term interest rates: It’s extremely low and given the worry for another recession, it’s not unlikely that they will remain low for the foreseeable future.
This makes the now the perfect time for a long-term mortgage. My goal is borrowing 250,000 EUR to 260,000 EUR over 30 years. This covers 64.55% of the total cost. With the support of my parents and my savings that I already have and will make over the next year, I can cover everything. At the current rates, a monthly payment of ~1000 EUR/month is realistic.
While it is a big decision, it’s one that gives me something to look forward to.
Bridging the gap
A bright future is ahead of me with the apartment in Brussels, but there is one slight problem; what to do between now and then? THe original intent was to stay at home but due to the temporary (student) nature of my girlfriend, we took the leap and seaerched for our own place to bridge the 1.5 year gap.
As you can imagine, for someone still living with his parents at age 29, this is something that will have a huge impact on my personal life. The biggest is living with my girlfriend which is an amazing feeling and is something I’m truly looking forward to. But at least for a couple of weeks, I will have to get used to the change in lifestyle.
All of my friends and family live near my parents and the location of my martial arts’ dojo is relatively close. As a result, once I move to a strange city I will have to get used to the distance and/or find a dojo in the area.
With this change comes a lot of new and exciting opportunities. The big one will be the freedom of having my place. Another nice benefit is that everything is close, including the cinema which I love to visit. Other pleasant changes are living in walking distance of the train station, a fitness around the corner and a big park.
Our first home: rented
This new milestone in my life starts on the 9th of September. This is when I and my girlfriend will receive the keys to our first rented apartment. While technically I call it an apartment, it’s more a glorified studio since the total surface area is only 40 m² (yes, you read that right). With a small apartment also comes little rent and expenses. A small overview (excl. groceries):
|Water; Electricity; Gas||70||90|
The amounts you find in the above table are based on information from local suppliers and operators. The Water, Electricity and Gas expense is based on a 50 EUR provision that the landlord asks and a guestimate based on the previous renter’s usage. This last one will vary since we are with two and previous one was alone but I believe I have taken a large enough margin to be save.
I use the two totals as a bracket. The average estimated monthly expenses per person should be 363.04 EUR.
1 year later: our own(ed) place
Once the apartment on plan is constructed, which we foresee to happen April/May 2021, me and my girlfriend will move in shortly after. This will allow us to have a place of our own and not paying rent to a landlord. While I had preferred to only move on together once this residence was constructed practical complications prevented us from doing so.
The apartment is a passive building that is located near the major European institutions and is thus perfect as rental property for eurocrats. On top of that, there are various benefits inside the residence such a intercom, badge system, automated delivery system for packages, etc. Besides the apartment I will have a personal underground parking space. This of course all comes at hefty price tag.
For the premium location and idem fit and finish I will pay a total of:
This includes the parking space and a fully furnished apartment with build in household appliences. It also contains the tax break you get in Brussels for your first and only home.
Full of emotions
The 2 decisions I took in such a short time have a profound impact on my life. It definitly makes me feel a lot of different things.
But I wouldn’t want to trade this turn of events in for anything. My fight towards financial independence will take longer or the challenges are going to be tougher. Looking at the bright side, I will have enough to write about the coming months and years.
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