A friend of mine owns an old house which requires renovation. They proposed me to pay for the renovation, and in exchange, I could live in the house and pay a smaller rent (or perhaps no rent for a few years). This would be legally enforced with a specific contract.
I am trying to calculate how beneficial it is for me to make this move. This depends on how long I will stay in the flat, the actual cost of the renovation, and how much money I save by paying a smaller rent for the next years. I would like to calculate how long it will take for me to amortize the renovation cost.
By not accepting the offer, I would pay around 400€/month for a flat with similar characteristics.
The cost of the reform is still unknown, but I am making the case with something ranging between 6000€ and 20000€.
|Cost (€)||Amortization (months)||Amortization (years)|
|12000||Base Monthly Rent (€):||400||30||2,5|
So for a renovation cost of e.g. 6000€ it will take me 15 months to amortize the renovation cost provided I pay no rent to my friend during that time.
Now I would like to calculate the same, but assuming I am paying 200€/month instead of nothing. I am not sure how to take this into account for the amortization period.
I will be grateful for any help regarding that calculation. Also let me know if the deal makes some sense in your opinion, or any other considerations I might be missing.