Hi everybody,
I recently stambled upo MMM and I'm deep diving into the Blog.
I am a 40yo expat women living alone in one of the most expensive cities worldwide, Amsterdam.
I come from a poor country, so despite I've always lived a frugal life, my saving apacity was close to 0 till I moved.
Current situation and data:
I bought a 3 bed house for 400k 1 year ago.
4.1% average interest rate for 30 years (half fixed at 3.53% and half variable at 4.69%).
Monthly installment 1878 euro/month (insane, before the Ukrain war till March 22 the interest rate was 1% and my friends who had partner's or family help have now a 400k house with a 900 euro monhtly instalment)
I rent 2 rooms for 1873 euro including bills
Monthly installment + bills is 2395 euro, so I still pay my share of bills and house (604 euro).
My living costs are 1134 euro per month on a salary of 3475 euro per month (no subscriptions except Spotify, just food and health insurance and my share of house costs).
604 euro out of 1134 euro are house share and bills - this is a great achievement since here a room cost 1200 incuding bills and a studio is 1700 including bills.
I save about 2141 euro per month but I use one full month saving/year for reparations and replacement due to tenants damages
The real estate law in Amsterdam obliges you to sell your house in case you leave the country: the only European country with this silly law. A great hack would be to live in another country and rent my house out at 3k but I cannot.
Getting a mortgage is overly difficult with my current temporary contract especially and it's also difficult live with other 2 people but I hold on for good.
Since I bought this house, I save around 20K per year.
I have now 47K and by end of the year I should hit 70/80K depends on bonuses. I put 20Kout of 47K in a saving account at 3% bruto per year.
The Netherlands financial situation has facing a huge crisis and I always want to have 10K cash (for selling costs as notary and real estate agent) in case I have to sell due to layoff or something else.
I do 200 euro per month extra payment because half of my mortgage is variable (4.69%) and I fixed the rate at 4.69% till November 2026 since now the interest rates are above 5%, crazy.
Dilemma:
Houses price increase +10/12% each year, a 1 bedroom apartment or studio is about 350K now and there are also a lot of overbidding.
My main goal would be to buy a second house, a studio/1 bedroom for myself (tenants are a huge job) which means having 30% cash (20% downpayment + notary and all expenses) and renting out my current house for 3k per month.
Job insecurity (after my 2023 layoff I have a temp 6 month contract as a manager) and the fact that my house will increase the value but also the studio value make it complicated.
I feel I am missing something and I would like to have your fresh point of view.
I can see these scenarions based on the data below:
1) Waiting for 2027, sell my house and buying a studio with capital gain plus savings. I would live mortgage free but I would not earn since no spare rooms
2) Waiting more years, to have a mortgage free house and 150k to start a 2nd mortgage without an insane monthly installment as now.
I don't know :)
Thanks a lot for reading me!
Savings Capital Gain+ Sav
2024 67.792 181.134
2025 95.650 269.202
2026 116.193 341.335
2027 136.736 417.736
2028 157.279 496.279
2029 177.822 572.222
2030 198.365 651.165
2031 218.908 729.908
2032 239.451 809.451
2033 259.994 889.994
2034 280.537 970.537
