All Forum Posts by: Jay Jay

Hi,

Background: I live in Northern Europe and I bought my first flat six years ago and have paid half of the 145k eur debt. I've rented the flat and managed to obtain a nice 300 eur monthly income after expenses including taxes. All this while the property price has gone up at least 20%. Therefore I went to a bank and got a new loan offer to buy a second apartment for renting it out.

Situation: I got a loan offer for 100k eur, but I have had hard time finding apartments that barely bring any net income after expenses. I've red here that people won't buy if the house makes less than let's say 250usd/month. To me it seems like that would apply to a case when you use more cash (ie. less mortgage expenses). In my case, having to pay off the relatively high debt makes the deals seem very bad. For example a rented flat that would leave me zero cash annually, would still pay off my debt by 4000eur. I do understand I need some net income to cover unforeseen expenses and repairs.

My questions are: A) is there any benefits/downsides buying with 100% debt?
B) what metrics should I use? I feel a lot of the metrics used in US don't apply here in Europe and especially when buying with 100% debt. Also, for example the 1% rule would never apply here as it would be impossible to generate 1000 eur/month with a 100 000k eur investment. Am I missing something here? 

Thank you for your time!