To buy or not to buy (realestate)

[Perfect10]

I've got a situation about real estate investment and if someone is willing to help I would be very grateful.

So I live with my parents as they're never home so it doesn't bother me nor them.
I own an apartment that is estimated to be worth 200.000€ that I rent out and I've got 50,000€ morgage left. I pay to the bank about 6000€/y.

My situation is that I've been thinking about selling it and buying smaller apartments to rent out (which in here where I live you get a lot more rent against price out off).
If I sell the apartment I own I'll get 150,000€ cash as we do not need to pay taxes for profits from apartments. I don't know how it works in the States but I just want to point that out.

I went to the bank and they offered me a loan for a new apartment with a 15% downpayment (fixrate 25y) and that I would also need to put a part of my old apartment as securities. That's not good for me since I would like to just pay 15% and not use my old apartment as securities.

So I though that if I sell my old apartment and make 150,000€ then with that I'd go to the bank and ask for 5 separate loan for 100,000€ each and pay 30% of each loan as downpayment (30,000x5=150,000) and if that would be enough to secure the loan.

Then I would rent out 4 or the apartments (one of them I'd move to) so that I the rent would pay for all the expenses (loan, housepayment, taxes) and I would not need to pay anything out of my own pocket.

I know for a fact that in my country if you rent out a studio apartment then it's possible to ask enough rent to pay all expenses. Specially if 30% of the loan is already payed for.

After a few years when the rents would go up I would even earn a few bucks per month, but that's not even important since it would be so little.

So what do you guys think? Does this sound reasonable? Would this be smart?
If you didn't understand what I mean I can try writing it more clear. English isn't my first language.

 

[OzyBoy]

I think now is not a good time to buy. I may be in a different country but things are not that different. You would probably end up losing lots of money for a while. I am not even considering buying a place of my own for at least a couple of years. :wave:

 

[Bible_Belt]

in my country if you rent out a studio apartment then it's possible to ask enough rent to pay all expenses.

Just fwiw, a long time ago when I worked with mortgages, we would take 25% off of your annual gross rental income to compensate for vacancies and maintenance, before we were allowed to count rental income in the loan qualification.

 

[Vice]

Don't sell; keep it and borrow against it to get a down payment on another income producing piece of property. Make sure the numbers work and that you have cash reserves to account for at least 25% vacancy per year.

Read a few real estate investing books and seek out a local real estate investment group near you.

 

[Perfect10]

in my country if you rent out a studio apartment then it's possible to ask enough rent to pay all expenses.

Just fwiw, a long time ago when I worked with mortgages, we would take 25% off of your annual gross rental income to compensate for vacancies and maintenance, before we were allowed to count rental income in the loan qualification.

So I'm guessing they then wouldn't give me the loan. Getting loans in my country isn't the easiest I've heard thats why I was so surprised that they agreed lending me 100k with a 15% down payment. Ive heard they usually tend to ask +25%. My salary after taxes is 1000e which is like nothing (median salary is about 3500e) but Ive got a company thats doing sufficiently well so I don't know.
Anyways I'll then do just buy another flat and rent it out.

 

[Alle_Gory]

Read a few real estate investing books and seek out a local real estate investment group near you.

What Vice said. If you don't know what you're doing, educate yourself first. Losing money is easy.

 

[twixt]

The only real money that I see in RE for a while is a big, old house, cheap, with lots of large rooms that can be split into 2 smaller rooms, renting out all to the homeless. bought right, for back taxes, in the right part of the right town, with lots of homeless people, this can be a real money maker, if you get the work done cheaply. If you don't want to live there, get a retired couple to live their rent free, pay them a little bit to manage it for you. I'm talking about less than 100k in it, 20+ rooms, rented out at $80 a week or more, depending upon the area. Tremendous return on your investment.

 

[henrikbeech]

While the decision to rent or buy will depend on your personal circumstances, when you're considering the question some facts are universal. Among them: What impact might your credit have on your decision to buy or rent.