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My partner and I have rented a home in a small village and would like to stay there for many decades to come. However, I feel uncomfortable being a tenant. So, we have saved enough money to buy a house.

Unfortunately, no house has been for sale in this area for at least six years. What should I do with the money while we wait for a buying opportunity? I want to minimize the volatility risk of the real estate market and avoid bleeding money to the landlord.

My idea was to "indirectly" buy a house through investing in real estate companies. The dividends would pay our current rent and the value of the shares would roughly match the price changes on the local real estate market.

However, compared to (directly) owning a home we would have to pay 25% tax on the dividend income.

Is there a way to save the money without additional losses compared to buying a home now?

(I was thinking about founding a "home cooperative" with my partner, which holds the shares and becomes the tenant for the current home. The rent reduces the profit of the cooperative to near-zero.)

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    "No house in six years" - that is slow. My Gemeinde (in BW) has a population of about 2700 and there have been lots of activity in the last six years. This is not an answer to the question you asked (hence a comment), but have you let it be known in the community that you are looking for a house? Have you considered asking the Gemeinderat if there is any possibility of releasing some land as building plots?
    – Martin Bonner supports Monica
    Nov 5, 2019 at 11:08
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    The village has about 160 inhabitants. Practically everybody knows that I am looking for a buy opportunity.
    – ManuelAtWork
    Nov 5, 2019 at 11:57
  • Perhaps extend your search area to other nearby villages?
    – Martin Bonner supports Monica
    Nov 5, 2019 at 12:54
  • Have you considered aggressively offering a high price to someone? You then at least save that "future rent" :/
    – Fattie
    Oct 30, 2020 at 14:37
  • I do not understand the final sentence in braces. To do that would mean buying the home you are renting?? If you buy that home, the issue is resolved?
    – Fattie
    Oct 30, 2020 at 14:41

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I realize this is a very late answer compared to when the question was asked, but surprised nobody suggested the OP go to their current landlord and work out a negotiation to buy that rental property out from them.

If OP's landlord's long term plan was to move back themselves (e.g. the house was a relative's house that we inherited and while they aren't in a position to move back now, they want to 10 years from now), then I can see them being reluctant, but if the landlord is simply using it to make income, then buying them out with enough money for the landlord to purchase another house elsewhere and rent that out should work. Now... it may take what OP thinks is 'too much money' to execute this plan. But it seems like it is worth asking if it hadn't been already.

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Investments in real estate companies along with paying taxes on the income is probably as good a plan as anything. However, if the investments build up unrealized capital-gains then the future house might be financed instead of cash-bought so as to avoid capital-gain taxes on the investments.

Or put the funds into growth investments and then there is no income tax.

Then plan on financing the house but hedge future interest rates with sell-side government-bond futures.

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Conceivably you could buy a house in another nearby (large) town, and rent it out.

Then the "rents offset", as it were.

(With luck, the capital appreciation on the "House In Large Town" would indeed be greater over the years than a local house.)

Eventually you could buy Local House, and, then, take your time to sell House In Large Town.

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