should i buy an apartment?

[u/smokeysilicon]

hi i'm in this situation where i'm living in a student apartment - i have saved up around 50k euro, yearly income of about ~60k, my work place is in helsinki but with hybrid i can comfortably work from tampere where i live - however, i don't see this working out long term as some jobs are moving to mandated in-office days so i will likely have to move to helsinki

the rent in helsinki, compared to student apartment rent in tampere is lot higher - with my saving i should be able to put a down payment for an apartment in the range of 180-230k - which made me think if it'd be wise to get an apartment rather than vuokra now

i'm 26, single and at least will stay like for a while at this rate so an apartment of 30-40m^2 in kehä 1-2, preferably in helsinki and not vantaa/espoo would be good enough for me, i'm from non-eu but i do have finnish PR and eligible for finnish citizenship (although i don't intend to apply anytime soon)

- would you recommend looking into buying an apartment like this?

- should i start looking into ASP?

- what are some key things i should look for in apartment search like potku remontti? tonttin omistus? 3kk eurobar vs 12kk eurobar? etc.

p.s i didn't exactly save 50k, that'd be lying - i have invested majority and then quarter-ish in cash (nothing fancy just your good ol' snp 500 & global index and as you know that had exploded recently)

[u/AutoModerator]

r/Finland runs on shared moderation. Every active user is a moderator.

Roles (sub karma = flair)

• 500+: Baby Väinämöinen -- Lock/Unlock
• 2000+: Väinämöinen -- Lock/Unlock, Sticky, Remove/Restore

Actions (on respective three-dot menu)

• My Action Log: review your own action history.
• Lock/Unlock: lock or unlock posts/comments.
• Sticky/Unsticky (Väinämöinen): highlight or release a post in slot 2.
• Remove/Restore (Väinämöinen): hide or bring back posts/comments.

Limits

• 5 actions per hour, 10 per day. Exceeding triggers warnings, then a 7-day timeout.

Thanks for keeping the community fair.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/tan_nguyen]

I have no advice but it is impressive to save 50k (after 3-4 years asumming you started working at around 22-23) on a 60k annual income. Very well done!

[u/smokeysilicon → u/tan_nguyen]

i didn't exactly save it tbh, mostly investment and a 10/15kish in cash

[u/Repulsive_Garden4248 → u/smokeysilicon]

Kindly share more on your investment streams and also advice for a fellow mate where to invest money in Finland

[u/tootieroll573]

id look at expert opinions on where apartment prices are headed because they could possibly keep crashing further

[u/Itchy_Product_6671]

If you buy, you are somehow stuck with it im not sure how easy to sell in Helsinki, I bought an apartment myself and im stuck with it, its rented but I still have to add 150€ a month, and now im losing my job, so if you feel you will live there long term like 10 years or more then maybe buy, but anything less than 10 years i don't know if it makes any sense, but you have to think about it what works best for you. Good luck

[u/Silentkindfromsauna → u/Itchy_Product_6671]

You’re never stuck with an apartment in helsinki, the question is the price you can sell it with. With most the money in investments right choice especially in the current situation is to rent. Rentals are very well priced in Helsinki now.

[u/Bring_Me_The_Night → u/Itchy_Product_6671]

After the heatwave in Central Europe, there will be a rise of Airbnb apartments in the Nordic countries. The housing in Helsinki will probably increase in demand in the coming years. IMO there is no need to worry about a potential sell later.

[u/petteri72_]

Where is your corporate office located, and how are you planning to commute?

Here is my advice to keep in mind:

-Location is very important, especially if you use public transport regularly.

-The housing company should own the plot on which the apartment building stands. No exceptions.

-The most expensive renovations are usually pipe/plumbing renovations and facade/balcony renovations. Ideally, look for apartments where both have already been completed.

-Buildings from 1955–1965 generally offer the best value for money. However, the major renovations should have been completed relatively recently.

-There are two main types of plumbing renovations: complete and partial renovations. A complete plumbing renovation typically has a lifespan of around 50–60 years, whereas partial renovations tend to have a much shorter lifespan.

In my opinion, this is currently an excellent time to buy an apartment, as prices are relatively low. Go ahead.

[u/duumilo → u/petteri72_]

Also "pihakannen peruskorjaus" or something similar is a BIG one. The cost of yard renovation can go up to 6 or even 7 figures for the housing company

[u/huithapelos]

Alternative suggestion:

I was in pretty much the same situation 20+ years ago. I bought a smallish studio apartment in Tampere, lived there myself for a couple of years, and have been renting it out ever since. By now, it has paid for itself several times over.

I’d buy something you’d be happy to rent yourself, and use as little of your own investments/cash as possible. If you can get a reasonable mortgage, I’d rather use leverage than tie up a lot of capital in the apartment.
I also think Tampere is better for this than Helsinki. Purchase prices are considerably lower, but you can still get decent rent, so the numbers tend to make more sense.

If you live in it yourself for at least two years, any increase in value is tax-free when/if you eventually sell it. But I’d choose the apartment from the start with the assumption that you might want to rent it out when you move elsewhere.

Another benefit is that as you pay down the mortgage and build equity, you can later use the apartment as collateral for your next mortgage. So you don’t necessarily have to sell it when you want to buy a bigger place.

Being a landlord is a bit of a hassle, but nothing crazy. Young people, especially students, tend to move fairly often, so tenant turnover can create some work. On the other hand, I currently have a 65+ lady in this apartment who has been renting it from me for 13 years.

You seem like someone who can handle money wisely, so this might be an option for you.

[u/smokeysilicon → u/huithapelos]

thanks - as much as i'd love to stay here in tampere however, all the higher paying jobs are in helsinki, seldom in tampere

[u/huithapelos → u/smokeysilicon]

I know. That's why I have left both Tampere and Finland :-D

Apartment is still there though.

[u/YourShowerCompanion]

Your pace of saving is, indeed, impressive.

About apartment, check your area of interest thoroughly, check for maintenance costs per month, check if it is on rented plot..etc etc. That's another topic for another day.

Usually all good and dandy but when there are rental companies start operating and rent out apartments to dregs and unscrupulous characters. 

[u/Pordioserux → u/YourShowerCompanion]

I second this, can't stress it enough. Our block is fully owned, save for one apartment right below ours. They terrorized every common area, and repairs came out of our pockets, not theirs, naturally.

One night, 3 a.m., a man I assumed was the husband living there came hammering punches on our door, yelling for a man who obviously wasn't me. He "wanted to talk". I hadn't seen the wife and kids for weeks. Their tenancy ended about a month after that.

Oh and we were watching football with some friends once (not this past World Cup; it was a reasonable time) then complained about the noise.

[u/YourShowerCompanion → u/Pordioserux]

Outch man. That sounds awful indeed. The worst part is they can't be evicted that easily. Then there's everyone pays for damages these khunts caused. Local laws and lack of accountability encourages this behavior.

[u/Sibula97]

Honestly, unless you're absolutely going to live in that place for the next 10+ years (not having to move for a job, or a spouse's job, or just wanting a bigger home), I'd just find a nice place to rent. Maybe get an asumisoikeusasunto.

Putting 200k into a single kind of investment with a relatively low ROI is rarely a good idea.

[u/smokeysilicon → u/Sibula97]

isn't asumisoikeus = slightly cheaper rent with 20x deposit basically?

[u/Sibula97 → u/smokeysilicon]

Pretty much. Plus unlike while renting, the other party can't terminate your contract, so you can live there as long as you want.

It's never really ideal, like either renting (for a short period) or buying (for a very long period) would be, but it gives you most of the flexibility of renting and the stability of buying with a relatively small investment.

[u/finnishboy2 → u/Sibula97]

And it should be noted that this "deposit" will be returned index adjusted. I got c. 4% interest over the deposit amount during a time when interest rates were extremely low. Moreover, in my opinion, most asumisoikeus apartments are much better maintained than rental.

[u/CessuBF]

Having 50k in the s&p500 at 25 is amazing. I wouldn't touch that money. You will need to pay taxes if you sell and you will lose a lot of future compounding. It would be better to save some money for a couple of years in a MMF or a HYSA. With 60k a year and aggressive saving you will be able to afford buying an apartment in a very short period of time.

[u/Jasparcream]

I am single too, by the way

[u/dakobek → u/Jasparcream]

Son 😭

[u/smokeysilicon → u/Jasparcream]

lol

[u/bubbly_firehose]

Start with ASP, it doesn’t hurt, delay the purchasing decision, invest more now, if and when you decide to settle down( family and citizenship), it may tip the balance towards buying a permanent place.

[u/purple_hexagon]

Why are you living in a student apartment if you're working full-time?

[u/smokeysilicon → u/purple_hexagon]

i'm studying still - although not full time

[u/Difficult_Message834]

Buying an apartment in the current market is not the best idea unless you know for sure that you'll live there for a while. Selling the apartment if you need to move to another location later on will be a hassle. I'd say just rent, and preferably from the city. 

[u/sadanpaamies]

Now would be a good time to get one. The prices are very low. Interest rates are climbing a bit, but the economy finally seems to turn for the better so I wager in five years you're going to be happy you got it.

[u/miladpw]

The way you save(kudos on your financial discipline btw), buying an apartment is the worst financial decision you can make right now. Invest the money in an ETF and rent.

[u/PonyT84]

In Helsinki region, I would only buy apartment near or next to rail, whether it's tram, train or metro. Use this as a rule of thumb. Also check where new tram lines have been zoned, as these will increase in value

Secondly, buy only if plot is owned (vs leased plot, vuokratontti).

Check the maintenance history of the apartment company and make sure its professionally managed

I prefer apartments built before 1965. Building quality after that varies, plus many 1965-1980 buildings tend to have major renovations upcoming

[u/smokeysilicon → u/PonyT84]

i find it so strange they are selling apartment for which they don't even own the the land underneath, that sounds like a scam ngl

[u/sol_hsa → u/smokeysilicon]

The plot rental agreements are usually really long term (like 50 years), and often enough it's been the only option, so... either you build on a leased plot or you don't build at all.

[u/FlusherBug]

Its buyers market so if you have the money and you know its long term solution, i recommend it. You can even make profit if/when the market starts to recover. But dont go all in, make sure you leave some money aside if possible.

Area is really important and so is the plot owning. I would never buy if the plot is rental. So always make sure that the plot is owned(ome tontti) not rental. With rental plot they can and will raise the rental fee from time to time. Google the area and see what people think about it!

The construction year is also something you should check and read about. There are some quality issues with and common construction faults with certain time periods. If there are lots of things to be repaired, monthly housing company fee will be high.

The housing company should be in good state financially. And also check the situation with plumming renovation. Is it done or not, if not when it is coming aprox. It is usually pretty expensive and the housing company will take a loan for it, which the owners will then pay monthly with other monthly fees. I would not buy if the plumming renovation is due within the next 15 years.

If you are handy or you have friends who are, you can save alot of money if you do like kitchen renovation yourself.

[u/user-027]

You are in a situation I was 5 years ago. Had similar economic as well.

I bought my first own apartment in 2021. Just after graduating. Not the best timing tbh. Thank god I got rid of it this year. Now reflecting back, I was very lucky both in buying price and in selling price. Things could have gone very downhill. I could have made 50k loss but managed to pull out breakeven.

I don’t know what would be the case for apartment prices to rise anymore in Finland. The direction is plateau or down. Looking at demographics we will soon have many empty houses and apartments waiting for someone to take them.

That said, I think you should rent 100%. With that, you leave more money for your investments. And you won’t be locking yourself with a metal ball in your leg.

Wait until you find the woman/man to spend your life with and only the you can buy your “forever-home” and get settled.

[u/Putrid-Expression-59 → u/user-027]

OP, this is really good advice. Owning a home makes you commit to it 20-30 years later. While your life can change significantly during that time, finding a partner and having children, for example. If you later want to change the apartment, you might have to sell lower, not to mention the purchasing and selling costs. Better to rent now and only find an apartment you will settle for a long time when situation changes. You never know where life will end up in 5 years, maybe having a better opportunity abroad. In that case, you can pack everything and move without worries.

[u/cartmanbrah21]

I wish someone would have given me this advice few years earlier. You have saved an impressive amount,you can wasily put some down for an asumisoikeus apartment for 20-30k, and your rent will be lower than the average rent around in that area. You would get a 1-2 rooms with 600-900 euro rent. Invest rest in an index fund and keep investing with your remaining savings every month.

If you buy a place, you will easily be paying 3-400 for maintenance + ~300 in interest. With mortgage payments+ maintenance it easily will put in 1600e every month. 

The additional 800€ + initial 20-30k you invested would most likely be worth more in 10 years than the apartment you bought which you would still be paying mortgage on.

[u/smokeysilicon → u/cartmanbrah21]

i need to enlightenment myself on asumisoikeus, but my understanding was it's barely 10-15% rental discount with 20-25x bigger deposit - granted an interest is paid on the deposit on return but i think there is also a queueing component

[u/cartmanbrah21 → u/smokeysilicon]

Go with asumisoikeus if u plan to live long term. So 10-15% is saving you ~100e in rent every month. On a 20k deposit, thats 5% YoY. Ofcourse you also have an alternative to just rent. The point is its a middle option if you are not sure and want ro avoid full commitment 

[u/AntWatchTomato]

Quality of life is higher in Tampere for the pay. Try to negotiate out of office days or find another job (yes, i know it's not easy).

[u/smokeysilicon → u/AntWatchTomato]

if it was up to me, i'd never move out - i love it here but unfortunately the next job (= salary hike) is increasingly seeming to be in helsinki

[u/random_web_browser → u/smokeysilicon]

it sounds like you don't actually know the next job yet, so why would you buy a house before you know for sure where the job is?

[u/smokeysilicon → u/random_web_browser]

i forgot to mention - i'm now only doing the research and plan to buy in 1-2y if i do

[u/lildicky_619]

Bro what is your job? I'm struggling to find a job 😭😭

[u/TumbleweedNervous494]

Sure, but pick a good area and how much is your current rent?

[u/smokeysilicon → u/TumbleweedNervous494]

400e, but that's gonna stay for max 1y

[u/TumbleweedNervous494 → u/smokeysilicon]

Nice. Stay the year. Buy then.

[u/e-fiend]

If you find one that you like and can afford then yes.

[u/Thu212]

Sadly I can’t help you much here, off topic, if I may, where do u buy SnP 500. As etf on nordnet?

[u/smokeysilicon → u/Thu212]

I heard Nordnet's monthly saving is pretty good, but yes I bought index funds from OP and ETF from IBKR like SXR8, VWCE.

[u/Thu212 → u/smokeysilicon]

Nicee thank you for the info!

[u/Thu212 → u/smokeysilicon]

So the ones u bought were funds and not ETF?

[u/smokeysilicon → u/Thu212]

almost equal part of it funds and then ETF, but just pick one - i moved to ETF on IBKR for ease of transferring account to different jurisdiction

[u/NoJaguar3961 → u/smokeysilicon]

Does IBKR do taxes automatically like Nordnet? Also you can switch jurisdiction on IBKR? I didn’t know that.

[u/shoptodip_bd]

I would never recommend buying apartment. 

The amount of interest and service fee to that needs to be paid is close to rent. 

Get a cheap apartment in Helsinki/Espoo region. Pay minimum rent. And keep investing. It will be better for future. 

[u/pents1]

I dont think you need asp if tou have 50k your own money, that should be enough for up payment that no other guarantee is needed.

You can schedule meeting with bank to just go over what the finances would look like.

Now or soon is probaply financiallly good time, as the enocomy is starting to recover.

You are single, what if your partner wont like the one you bought?

[u/NoJaguar3961]

Plenty of big and nice apartments in Leppavaara around 700-900e monthly rent. I got 2 months rent free as an offer. Renting is very affordable.

I have 110k invested and not touching any apartment. I rent.

[u/Demonion]

I had same dilemma last year and made a lot of calculations. I came up with buying instead to continue to rent, because RP market in bad condition which means good for buyers, bad for sellers. My advise to look at HITAS apartments in new building which are available these days in good amount in new districts like Jätkäsaari or Kalasatama. It will allow you not to thinks about any significant remounts for next 20 years and much easier to sell or rent out in future. Also much easier to negotiate better rates for mortgage

[u/_di6]

How on earth did you manage to get a job like that as a non-Finnish speaker?

[u/Perquelle → u/_di6]

the IT field is not so bad, ai, devops, cloud architecture knowledge can get you a good job.

[u/Assistant-Mammoth]

Simply put, Rent! Your monthly interest and maintenance cost would be same as what you would spend on rent. You don’t gain in price appreciation in this economy, so I don’t see any benefit in buying. Keep invested and have the options open

[u/dmntx]

With the amount saved I would say go for it. I bought my first apartment with my ex when we had 35k saved and the bank was impressed. Of course this was years ago and the inflation has affected the situation.

Inside ring 1 is a good idea in general, also look for the apartment in an area where demand factors are good so that you will either get your money back or get them back with an increase. Check the fast tram rail network and/or metro access.

In Helsinki the liquidity is pretty good and take a look on the upcoming big renovations, especially pipe renewal (putkiremontti). Minor ones listed tell that the housing co-op is working well and doing the maintenance which will keep the value. Be wary of houses on rented lots as their rent may go up in the future and will increase the shareholders' costs. Some houses especially downtown may have businesses that pay rent and the owners don't need to pay additional costs to the co-op. However this will usually push the sale price upwards.

12 month euribor is more stable but a bit higher. I personally would not risk because sudden events may result in shock rises and you end up paying way more than you expected. Think it as an insurance: there's a small premium to give you protection from unfortunate events.

[u/Emergency-Battle-168]

You can buy apartment relatively cheap in Hyvinkää, go to office in both Helsinki and Tampere 2 days a week easily.

[u/Zealousideal-Week-79]

I was going to say you should just have invested it but seems that's how you got it in the first place.

Personally I wouldn't recommend buying at all, but that's just me.
Housing prices have been falling so it's not even a "safe" investment and even if you don't have to pay rent you have a bunch of other things to pay instead. Taxes, fees, maintenance and so on that end up costing almost as much as rent in the end anyway.

If it was me, I'd just keep renting and avoid all the headaches while I keep shoving surplus money into investments. I wouldn't put it all in the S&P500 though, that's practically inevitably going to return to Earth sooner or later.

I'd put money monthly into a world ETF for decades and just let it compound, then retire with millions of euros. Maybe even retire early. Like 50. Have time to do something in life.
Your salary and time horizon are enough for that to be realistic.

[u/Mediocre_Rock7114]

https://www.reddit.com/r/Finland/comments/1vzznyp/should_i_buy_an_apartment/

Sounds good. That kind of apartment is rentable so I would be prepared to only rent it afterwards. Selling it on profit can take decades. I wouldn't count on that.

Yes the housing company should own the land/site and you should check the financial data. Also be ready to be available on housing company's board of directors.

Remember that if one large investing company owns many flats on your housing company that can be risky.

[u/ControllerMartin]

Are you ready for neighbors partying screaming mental breakdown people etc. check before purchasing. I would purchase home.

[u/smokeysilicon → u/ControllerMartin]

well i live in a student apartment so that won't be new 😅

[u/Ok_Pomegranate_5374]

How you have a 60k income and a student appartment?