Buy a home or not ?

[ozil-madrid]

Hi,

I am thinking if I should get a home or not with following ideas in mind and please share your thoughts. I am renting at the moment. living in espoo, work in helsinki(need to go to office once a week). We are foreigners as well not speaking much finnish (to take into consideration for Kirkkonumi/vihti)

1 - Buy a 3-4 rooms home for my family with 1 child to have space to work from home (from espoo, kirkkonumi, latookaski, or Vihti) ? Vihti places are half priced from Espoo's good areas. Kirkkonumi already adds a lot of commute and Vihti a bit more like Kirkkonumi. Then you need to have a car and drive it to Iso omena for example and commute by metro to helsinki ?

2 - Continue renting but instead buy a 35-50 m2 apartment as an investment (should it be from from espoo, kirkkonumi, latookaski, or Vihti)? If one gets it from vihti for example you can pay it much faster as they're half priced. then you have stable income and safe investment done? If i ever need to leave finland, i can always come back to that place and live with family temporarily if im without a job?

3 - Buy a smaller place 3 room and move in there with family to not to have a lot of money as homes here are expensive although its a bit small and id prefer 4 houne?

4 - Continue renting only and invest in stock market lol?

I am really amused by the vastike amounts ranging from 250-400 euros every month!!!! I wonder if you buy a home and keep paying that vastike it is almost 1/3 of the mortage. I find that very strange and told that its not same in US or other countries. Those housing companies feel like theft, taking money back and forth adn when you need to sell the apartment i feel you might not get that back? Am i misunderstanding something here? someone help me out please with the Math !

Feels like those housing companies are always finding some renovations to do, which doesnt add value to the total value of house when you need to sell it?

[FinnGuyHelsinki]

Hi,

I am thinking if I should get a home or not with following ideas in mind and please share your thoughts. I am renting at the moment. living in espoo, work in helsinki(need to go to office once a week). We are foreigners as well not speaking much finnish (to take into consideration for Kirkkonumi/vihti)

1 - Buy a 3-4 rooms home for my family with 1 child to have space to work from home (from espoo, kirkkonumi, latookaski, or Vihti) ? Vihti places are half priced from Espoo's good areas. Kirkkonumi already adds a lot of commute and Vihti a bit more like Kirkkonumi. Then you need to have a car and drive it to Iso omena for example and commute by metro to helsinki ?

2 - Continue renting but instead buy a 35-50 m2 apartment as an investment (should it be from from espoo, kirkkonumi, latookaski, or Vihti)? If one gets it from vihti for example you can pay it much faster as they're half priced. then you have stable income and safe investment done? If i ever need to leave finland, i can always come back to that place and live with family temporarily if im without a job?

3 - Buy a smaller place 3 room and move in there with family to not to have a lot of money as homes here are expensive although its a bit small and id prefer 4 houne?

4 - Continue renting only and invest in stock market lol?

I am really amused by the vastike amounts ranging from 250-400 euros every month!!!! I wonder if you buy a home and keep paying that vastike it is almost 1/3 of the mortage. I find that very strange and told that its not same in US or other countries. Those housing companies feel like theft, taking money back and forth adn when you need to sell the apartment i feel you might not get that back? Am i misunderstanding something here? someone help me out please with the Math !

Feels like those housing companies are always finding some renovations to do, which doesnt add value to the total value of house when you need to sell it?

A maintenance fee (vastike) is for paying for the costs of a housing company, e.g. heating, renovations and so on, the same things you'd pay yourself if you owned a house. The purpose is not to turn in a profit, the company owners - who essentially are the company - pay the fees and decide (by selecting the board and voting in the meetings) what gets done, it's not for anyone else's benefit.

The math is simple, just add up the costs of each alternative for comparison. There are, however, other factors only you can tell how much they matter, e.g. time spent commuting, living in a certain location,... Also the investment aspect you have to figure out yourself, you should never make investment decisions based on what someone else says, we all can speculate but it's your money.

[ozil-madrid]

Thanks and understand your point. It is important to hear multiple ideas and thoughts from folks living here longer than myself to understand more before i make a decision. By the way are there foreigners living in Vihti/kirkkonumi like espoo? I think that's important to know as well since we are foreigners and dont want to feel like strangers. Happy to hear thoughts

Hi,

I am thinking if I should get a home or not with following ideas in mind and please share your thoughts. I am renting at the moment. living in espoo, work in helsinki(need to go to office once a week). We are foreigners as well not speaking much finnish (to take into consideration for Kirkkonumi/vihti)

1 - Buy a 3-4 rooms home for my family with 1 child to have space to work from home (from espoo, kirkkonumi, latookaski, or Vihti) ? Vihti places are half priced from Espoo's good areas. Kirkkonumi already adds a lot of commute and Vihti a bit more like Kirkkonumi. Then you need to have a car and drive it to Iso omena for example and commute by metro to helsinki ?

2 - Continue renting but instead buy a 35-50 m2 apartment as an investment (should it be from from espoo, kirkkonumi, latookaski, or Vihti)? If one gets it from vihti for example you can pay it much faster as they're half priced. then you have stable income and safe investment done? If i ever need to leave finland, i can always come back to that place and live with family temporarily if im without a job?

3 - Buy a smaller place 3 room and move in there with family to not to have a lot of money as homes here are expensive although its a bit small and id prefer 4 houne?

4 - Continue renting only and invest in stock market lol?

I am really amused by the vastike amounts ranging from 250-400 euros every month!!!! I wonder if you buy a home and keep paying that vastike it is almost 1/3 of the mortage. I find that very strange and told that its not same in US or other countries. Those housing companies feel like theft, taking money back and forth adn when you need to sell the apartment i feel you might not get that back? Am i misunderstanding something here? someone help me out please with the Math !

Feels like those housing companies are always finding some renovations to do, which doesnt add value to the total value of house when you need to sell it?

A maintenance fee (vastike) is for paying for the costs of a housing company, e.g. heating, renovations and so on, the same things you'd pay yourself if you owned a house. The purpose is not to turn in a profit, the company owners - who essentially are the company - pay the fees and decide (by selecting the board and voting in the meetings) what gets done, it's not for anyone else's benefit.

The math is simple, just add up the costs of each alternative for comparison. There are, however, other factors only you can tell how much they matter, e.g. time spent commuting, living in a certain location,... Also the investment aspect you have to figure out yourself, you should never make investment decisions based on what someone else says, we all can speculate but it's your money.

[riku2]

A maintenance fee (vastike) is for paying for the costs of a housing company...the same things you'd pay yourself if you owned a house.

This is not entirely true because as a homeowner you might do things yourself such as garden renovations or new benches (or probably sand and paint the old garden benches). In a housing company there will be things like electric car charging points added (everyone pays towards the work, even non-car owners let alone people with petrol/diesel cars), children's playgrounds etc. and when the work is done it's normally done by really expensive contractors - quite different to spending your own money when doing things for your own home.

[FinnGuyHelsinki]

A maintenance fee (vastike) is for paying for the costs of a housing company...the same things you'd pay yourself if you owned a house.

This is not entirely true because as a homeowner you might do things yourself such as garden renovations or new benches (or probably sand and paint the old garden benches). In a housing company there will be things like electric car charging points added (everyone pays towards the work, even non-car owners let alone people with petrol/diesel cars), children's playgrounds etc. and when the work is done it's normally done by really expensive contractors - quite different to spending your own money when doing things for your own home.

The main difference is that a housing company has a set process for deciding what gets done and how, and usually has multiple owners, which may not be tenants themselves.

Other than that, on a general level the work done on the property is very similar to a single owner house. There's a building or multiple buildings, a yard,... which require upkeep and maintenance, any updates/upgrades are a matter of deciding to do them. A housing company does what the owners agree to be done, it's not a separate entity in itself.

Housing company (owners) can do the work by themselves, if they have an agreement and the capability to do it. It's not uncommon to do yard work, painting fences etc. common tasks (not requiring specific expertise) when the owners are also tenants. In a predominantly rental building it's a different story, the owners' interest lies in managing their investment and any changes don't affect their own living conditions.

Someone having lived in a rental apartment, thus not having been part of the decision-making process, may not fully grasp that as owners, they're part of the decision-making body. If they choose not to participate, then it may seem that the housing company is deciding things on its own. Sometimes compromises need to be made to get even the absolutely necessary things done, and some decisions aren't to everyone's liking, but that too is the same whenever there are more than one owner, also in a house.

[network_engineer]

Be careful! Housing interest rates are set to rise. Banks have been giving loans on rather easy terms. Many people cannot now pay back the principal and the interest as well as the increasing living costs (e.g. electricity)

I would at least consider these and speaking *mostly about detached single homes*:

1- Avoid places with *direct* electric heating e.g. heating coils in the floor, electric wall heaters, they are expensive and hard to replace. A heat pump powered by electricity may be better.

2- Consider longer term, 5-10-15 years, including commute. We made this mistake. We received *bad* advice from a native that one should get an apartment, then a row-house, then an independent house. Big mistake! Every time, you land up paying 2-4% of the purchase price as taxes (varainsiirtovero).

3- Be very thorough and be very careful. We got duped. Be aware of deceit. And no way out. Here's what happened:

E.g. we looked at a house that seemed to have things in order. The seller was very vocal about how they just replaced the heat pump two years ago.

After we bought the house and moved in, we were *absolutely horrified* that the upstairs floor was heated using electric heaters.

Why did we miss that? Because the heaters looked *exactly* like water-circulation based radiators. No, one CANNOT examine every tiny detail in my opinion. I.e. in the ad they mentioned heating as "poistoilmalämpöpumppu, varaava takka, ilmalämpöpumppu", i.e. the electric heat pump (and year), the heat retaining fireplace, the additional air heat pump.

Did not mention anything about electric heating, i.e. deceit.. Visiting the house 2-3 times, the seller was insistent on showing us the ground (1st) floor, and talking about the flooring etc.

I am thinking if I should get a home or not with following ideas in mind and please share your thoughts. I am renting at the moment. living in espoo, work in helsinki(need to go to office once a week). We are foreigners as well not speaking much finnish (to take into consideration for Kirkkonumi/vihti)

1 - Buy a 3-4 rooms home for my family with 1 child to have space to work from home (from espoo, kirkkonumi, latookaski, or Vihti) ? Vihti places are half priced from Espoo's good areas. Kirkkonumi already adds a lot of commute and Vihti a bit more like Kirkkonumi. Then you need to have a car and drive it to Iso omena for example and commute by metro to helsinki ?

4- 5-10-15 years perspective, availability of local services, shops, schooling etc. should be key in your decision.

5 - Continue renting but instead buy a 35-50 m2 apartment as an investment (should it be from from espoo, kirkkonumi, latookaski, or Vihti)? If one gets it from vihti for example you can pay it much faster as they're half priced. then you have stable income and safe investment done? If i ever need to leave finland, i can always come back to that place and live with family temporarily if im without a job?

5- Do take the capital gains into account for rent. IIRC, they were taxed at capital rates.

I am really amused by the vastike amounts ranging from 250-400 euros every month!!!!

6- Anything other than independent house, you would land up paying rather dearly for maintenance (weak and pathetic). I am not into slavery but also don't believe in paying exorbitant amounts for basic cleaning services. Nope! And there is not enough transparency.

I wonder if you buy a home and keep paying that vastike it is almost 1/3 of the mortage. I find that very strange and told that its not same in US or other countries. Those housing companies feel like theft, taking money back and forth adn when you need to sell the apartment i feel you might not get that back? Am i misunderstanding something here? someone help me out please with the Math !

Feels like those housing companies are always finding some renovations to do, which doesnt add value to the total value of house when you need to sell it?

7- If you are buying a kerrostalo, you as a foreigner will NOT have a say (legally you have a "vote", but what do you as a foreigner know?. A pipe renovation that costs 7000e in Germany would set you back by about 70k. There was an article about this IIRC in IS.

About this: A friend bought an apartment in Karakallio for 220.000. The pipe and electric renovation cost about 74.000e. So, simplest calculation would say, the adjusted value as 220.000+74.000 = 294.000. The price still hovers around 230.000, not to mention they have to pay the rahoitusvastike (financing)!!!

Finally, personally I would NOT buy anything where my views are ignored. So, for me, apartments (kerrostalos), rivitalos (row-houses), anything with a "vastike", I am out!

[riku2]

Anything other than detached house, you would land up paying rather dearly for maintenance (weak and pathetic). I am not into slavery but also don't believe in paying exorbitant amounts for basic cleaning services

This is also my experience with anything ordered by a housing company. Once the customer is a corporate entity (this includes housing companies) then construction companies, cleaners and maintenance companies price their services at a completely different level to what might be offered to private home owners. The same applies in many walks of life - anything related to company cars is massively more expensive than things aimed at private car owners.
When you own a flat in a block like this you are a hostage to these kind of prices. And the quality of the service and support is different also. The person who receives the service (and might complain) is not the person paying (the invoice is sent to the housing company directly). So there is no motivation to take care of the customers or provide a good service.

[Mamusha]

It’s hard to advise anything because you know your situation best. I can just share my own experience. We have been renting an apartment for almost 4 years and rent was almost 900 euros per month. Three bedroom apartment in city centre. I live in Northern Savonia. We took a loan and bought our own two bedroom apartment because we have long term plans to stay in Finland. Our current apartment is located in city centre too. It takes a few minutes to walk to work, gym, daughter’s daycare and etc. All supermarkets are also nearby. Kalavesi lake is just next to us. Our pipe renovation comes in 20 years, so for now we don’t think of it much. Maintenance fee is 375 euros per month and we also pay almost 800 euros to bank every month. I don’t know if it was a wise decision to buy an apartment but it feels good to have something of your own.

[agroot]

East of Helsinki such as Vuosaari is inexpensive and there are lots of foreigners.

Also if you buy, the size no longer matters much like rent. The larger the apartment the cheaper per sqm it is. You'll find 3h is priced only a little more than 2h, and 4h is almost like 3h in the same building, and then 5h, 6h, .. The real cost will be maintenance fee and future renovation cost, both calculated by the numbers of shares / sqm, rather the amount of work needed (makes no sense I know, but lower sale price is good).

[network_engineer]

BTW, you really want to check the electricity distribution prices of the area as well.

Some people have hellish experiences. I would avoid any area that has certain providers (they have been named in the past).

And I would not buy any house that has district heating.

A friend of mine was given the offer of about 150e for his omakotitalo. Prices have been raised almost 30-50%, in his case almost 75%. And you have no control over the prices, and the exit from the contract is painful IF at all even possible.

Best option would be a house with geo-thermal or heat pump based heating.

[SecretCode]

And I would not buy any house that has district heating.

Why not?

[network_engineer]

And I would not buy any house that has district heating.

Why not?

I wrote the reason above. Quite a few friends have some nasty experiences, common being raised prices, unable to switch easily away as well.

One of my friends, north Vantaa, had the district heating priced at 150e/kk, Now, his bill was about ~370e!!! Small 3 room OKT.

Our elderly friends living in Helsinki/ Paloheinä pay 300e/ month just heating costs AND the housing company switches off the heating during the summer (in the radiators). This is a small, very small rivitalo.

My personal view: A well-insulated with heatpump or geothermal and even better if you have BOTH radiators AND floor based heating.

[Upphew]

even better if you have BOTH radiators AND floor based heating.

Just like with pants, even better with belt and suspenders.

[network_engineer]

even better if you have BOTH radiators AND floor based heating.

Just like with pants, even better with belt and suspenders.

Oh yes. Do wear pants, and then the trousers with belts and suspenders.

Just another thing: Independent houses, remember it is going to be HARD (at least for me) to get any sort of workers to get things done for the current moment.

On my side: Partly my fault. I cannot seem to understand *why* prices have jumped from 58e - 65e for an hour to ~85e/ hr. So, I have some electric work that needs to be done, I don't have the certificate (I have the knowledge). So, I've put it off.

Even unskilled labour (don't know if this is a term known well enough, e.g.not a skilled carpenter, but a handyman, one that can just hammer the nail and create a structure) costs about ~58e per hour.

I've had some problems with both time and my back, just paid about 6Ke to repair the garage wall, put up a shed and the cover for the wastebin!

I think if normal economics is at play, we should see a recession coming soon, and then people will pick any job they get. The downside? With more people unable to raise flush funds from handyman roles, they will turn to KELA which will cause a rise in taxes!

[hellofelicia]

Only you know your situation. It is anyone's guess what will happen with the economy, employment, house prices etc etc anytime soon. Low interest rates have been pushing the prices upwards for a while. Now, many people have overleveraged themselves with low Euribor and now are suffering dearly and might be forced to sell. On the other hand, the era of low interest rates might be over for good and it will be harder to buy in a much more expensive market and less incentive to sell.

My only advice is to run the numbers, and do it for real and not just to further your confirmation bias. Consider how long you would keep this apartment. Assess your employment situation, what you would do if you lost your job, same for your spouse/partner. How much will you pay if Euribor rises or if you go for a fixed payment. Make sure you're factoring in all costs like closing costs, utilities, renovations and repairs (things WILL break in your home and putkiremontti can cost 1/4-1/3 of your apartment value), furniture, taxes if you would ever sell... Then there are non-monetary costs like travel time, how easy would it be to move if you would get a different job, opportunity cost and such. If you want to be a landlord, you can only charge what the market will bear which might not be enough to cover all these, plus you have to deal with tenants' issues.

Personally for me, each time I have done that calculation for my situation and desires (single, tech worker, looking for an apartment in Helsinki within Keha I), I have found that renting makes more financial sense for me and gives me better quality of life than buying. Rent is the MAX I will pay in a month (+ electricity and water), if my fridge breaks or renovations are needed in the building it costs me 0€. The mortgage is the MIN you'll pay. You can buy a house for non-financial reason as well, but that's a different conversation.

If i ever need to leave finland, i can always come back to that place and live with family temporarily if im without a job?

Are you aware that if you wanna terminate the contract, the notice period will be 6 months? How are you gonna deal with tenants' requests (for which you're legally liable) while you're away? Who's gonna handle things if your tenant decides to move out - inspect the apartment, look for new tenants, fix the place if the previous tenant decides to trash it? If you plan to buy an apartment via ASP account, are you aware that you only are allowed to rent it out for 2 years and only if you move abroad for work/study until your mortgage is paid?