Met gala review and real estate
Walking into your bright financial future with Kim K. sized baby steps ...
I know, I know … I am a couple of days late and the Met gala has already happened. Yet, here I am, still thinking about it, days, even weeks later. Maybe blame Covid-induced boredom or the fact that for some weird reason this strange event really has become the epitome of pop culture and all things celebrity with the memes, the breathless coverage and the attempted think pieces following suit as reliably as the knowledge that Sarah Jessica Parker will be wearing oversized headgear. I am not even pretending that I have anything new to add to the “out there” and “very out there” topical combinations that professional journalists like those at the beloved New York Times have attempted (exhibit A) - so instead, I’ll leave you with a slide show of the craziest fashion and dive right into our topic of the week, a much more (dare I say) practical look at real estate. In our ongoing series of “52 steps towards real estate investments” (and yes, they are small steps, like Kim K. tiptoeing up that staircase) this week is all about banks and mortgage calculations. Because, as we have said many times before, that you could get most (if not all) of your investment financed by a bank still is the biggest thing to know in my humble opinion. Let’s get to it - with some math and model calculation …
Let’s assume you can get a 325,000 Euro mortgage to fully finance a property. 300,000 Euros for the pure, baseline, real estate bones of a place, 25,000 Euros set aside for renovations. Fees and additional purchase costs are on you - in this (theoretical) case that amounts to 36,750 Euro which covers agent’s fees, real estate transfer tax as well as the notarized listing in the land register. Cool? Cool. For simplicity’s sake, let’s arbitrarily pick a timeline and, um …. add interest payments for the next 10 years let’s say. If you assume an interest rate of 1.5% (a word of caution: even a slight difference of a decimal point or two can make a HUGE difference in the overall costs - but we have to pick a number) that leaves you with interest payments of 43,630 Euro (again, total over 10 years).