ᐅ Compromises in the Property Location and Initial Questions
Created on: 8 Dec 2016 10:24
W
Winniefred
Hello!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
Hehe: "Not bad" can mean more or less bad to some, while for others it’s an expression of something ultimate.
You get a well-cooked medium filet served on a platter, but you judge it as rare and undercooked, so inedible 😉
It seems everything that matters is there.
Your city remains your city. You have the chance to enjoy the positive aspects of the big city by visiting with a purpose and escape the negatives (noise, dirt).
You can have it all: the hustle and vibrancy of the city during and after work, and then relaxation and quiet in the middle-class suburb at the end of the day 🙂
Actually, the responsibility and care for your child should already make you think this way, but yes… it’s also understandable if you consider your own disadvantages 😉
You have the opportunity to make the suburb your home while the city remains your “love” (a bit cheesy to say 🙂 )
See it as an enrichment!
From the way it reads, you can’t even name advantages because it’s simply the feeling that causes discomfort.
Personally, I take a more pragmatic view. I also lived in an ideal place. And now I’ve built in a relatively rural area. But we really celebrate the few positives: the supermarket around the corner becomes a cozy walk on Saturday instead of frantically hunting for a parking space in the city. Every event from the market is attended with neighbors, just like Easter bonfires and flea markets. The rest of the time is sprinkled with visits, for example to the city, mostly more intentional now but sometimes just for the sake of it.
The garden and the peace give you a tremendous amount of energy—you don’t get younger after all 😉 😀
Best regards
You get a well-cooked medium filet served on a platter, but you judge it as rare and undercooked, so inedible 😉
It seems everything that matters is there.
Your city remains your city. You have the chance to enjoy the positive aspects of the big city by visiting with a purpose and escape the negatives (noise, dirt).
You can have it all: the hustle and vibrancy of the city during and after work, and then relaxation and quiet in the middle-class suburb at the end of the day 🙂
Actually, the responsibility and care for your child should already make you think this way, but yes… it’s also understandable if you consider your own disadvantages 😉
You have the opportunity to make the suburb your home while the city remains your “love” (a bit cheesy to say 🙂 )
See it as an enrichment!
From the way it reads, you can’t even name advantages because it’s simply the feeling that causes discomfort.
Personally, I take a more pragmatic view. I also lived in an ideal place. And now I’ve built in a relatively rural area. But we really celebrate the few positives: the supermarket around the corner becomes a cozy walk on Saturday instead of frantically hunting for a parking space in the city. Every event from the market is attended with neighbors, just like Easter bonfires and flea markets. The rest of the time is sprinkled with visits, for example to the city, mostly more intentional now but sometimes just for the sake of it.
The garden and the peace give you a tremendous amount of energy—you don’t get younger after all 😉 😀
Best regards
S
Steffen808 Dec 2016 19:39120 sqm (1,292 sq ft) for 210,000 all-inclusive? That’s not going to work. There are 30,000-40,000 in additional construction costs plus landscaping and so on. So how much is left for the house? About 1,250 EUR per sqm (116 USD per sq ft)? Right now, you need at least 1,600-1,700 EUR per sqm (149-157 USD per sq ft) for a standard build.
Save up your own funds. Whether it’s a village or not is a personal choice. For us, it wouldn’t work—we would have preferred a nice rental apartment. That’s also very nice, no work involved, and you can move out anytime. It’s probably cheaper in the end anyway 🙂
Regards, Steffen
Save up your own funds. Whether it’s a village or not is a personal choice. For us, it wouldn’t work—we would have preferred a nice rental apartment. That’s also very nice, no work involved, and you can move out anytime. It’s probably cheaper in the end anyway 🙂
Regards, Steffen
C
Caspar20208 Dec 2016 22:11Steffen80 schrieb:
120 sqm (1290 sq ft) for 210k all-in? That won’t work.@Steffen80: I totally agree with you. But I think the original poster was also quite unclear, considering the following two passages:
Winniefred schrieb:
€210,000 to build our dream bungalow and even complete the outdoor areas (at least the paving work and a carport; the rest of the landscaping is fine). It’s just under 700 sqm (7,535 sq ft), but well designed, fully serviced, fenced, and level. Through the plot and savings, we would have a solid equity share (over 40%).Winniefred schrieb:
Especially in our case, since the plot would already be owned and wouldn’t have to be purchased for around €130,000, as is usually the case on the city outskirts.I find a bungalow of 120 sqm (1290 sq ft) for 4 people without a basement (?) a bit small.
@TE: Of course, you can set limits for yourself, but I really don’t understand the 15-year term. Especially since you’re both under 30. A proper bank or lender will offer you a mortgage over 30–35 years. And over time, the fixed monthly payments become less of a burden. (You don’t get this effect with rent.)
Winniefred10 Dec 2016 08:19So, now I’ll try to address everything.
120m2 (1,292 sq ft) for 4 people: Yes, we find that completely sufficient. We currently have 102m2 (1,098 sq ft) and that is more than enough, even though the layout isn’t ideal. We don’t need much space and don’t want a large house. Managing the household for 102m2 (1,098 sq ft) is already enough for me ^^
Big city: We know our neighbors, we live in a fairly green area (looking out onto a park at the back = unobstructed green views) and it is relatively quiet because we’re on the city outskirts. There’s a warm community feeling in our house, nothing hectic or anonymous at all, and parking spaces are (almost) always available ^^. Just across the street at the front is a larger park where we walk the dog. And if we really want forest, we drive 6km (3.7 miles) beyond the highway and we’re in it. Still, we have a tram connection more frequent than every 10 minutes plus bus connections, and everything for shopping is within walking distance. My husband’s workplace is only 3km (1.9 miles) down the road. Our children attend a daycare with only 30 kids in total (!), located 3km (1.9 miles) away by the city forest. There are many families living here and many great, well-used playgrounds. My parents and brother live just around the corner. The city center is only a 15-minute train ride away, where I also work. In the small town, the other grandparents would live across the street on the property, but the other grandparents would be almost 30km (19 miles) away again.
In the small town, the tram runs only every 20 minutes and the suburban train only every 30 minutes, which is quite an adjustment. On Saturdays, everything closes by 4 p.m. at the latest. Sunday bakeries? None. Meeting other children at the playground? Very rare. Switching daycare to a larger one in the small town would be necessary. Specialized secondary schools are only in the city. Our friends are spread out anyway, so that wouldn’t make much difference, especially since my best friend is moving to the countryside and won’t live in the city anymore. Because we live on the ground floor and have the only apartment there, we now have the whole courtyard to ourselves (about 200m2 (2,153 sq ft)), so we can set up paddling pools, grill there, etc. So our children don’t play in a concrete environment and I would almost say they have no disadvantages here. We don’t live in central Berlin ^^. Our city is very green and we live quite far out. The city ends 4km (2.5 miles) away.
Costs: No, €210,000 only for a fairly small and simple bungalow without a basement. Additional costs not included, but we do have equity (which by the way we do have; I don’t know where you get the idea we have no equity and that we would start building immediately; we still have time to save another about €20,000). Green spaces, fences, driveway, paved garden paths, old trees: all already there. The plot is fully serviced as well. Certainly, something would need to be done directly at the house, like creating a terrace. But the foundation has been laid. At least the real estate agent’s commission would be eliminated. I think you can get there with €210,000, and if a few square meters of lawn are missing in the front garden, you can always add that bit by bit later.
Last night I went out for dinner with a friend. Afterwards, we wandered around the Christmas market and then caught trams without waiting that took us home within 10 and 15 minutes. Wonderful! Children’s gymnastics, daycare, playgrounds, everything just outside the door. The older child has a more than 18m2 (194 sq ft) kids’ room. So yes, I love my edge-of-town location because for me it is the perfect combination of peace and city life. The small daycare is definitely a huge, huge plus.
But we simply can’t imagine renting forever, and it’s just too expensive in the city. Paying off a house for 30 years would be a nightmare for me. Rents keep rising here. We always wanted a house. With our current rent, after 30 years we’d have paid €260,000 in rent without utilities. But the rent won’t stay that low.
My friend told me last night we should definitely go for it because it’s just too expensive here, and objectively the houses aren’t worth the money. We recently viewed one in a perfect location on the edge of town, similar to now. Semi-detached house, 500m2 (5,382 sq ft) plot, 130m2 (1,399 sq ft) living space. It was asking €338,000, but we would have had to put in another about €50,000 (DIY time we don’t have: bathrooms, doors, ceilings, walls, partly electrical work, floors, removing one wall…) plus additional costs... we would have ended up over €400,000. And that’s simply too much for us, no matter the location. That’s even more than our city house is worth to us.
120m2 (1,292 sq ft) for 4 people: Yes, we find that completely sufficient. We currently have 102m2 (1,098 sq ft) and that is more than enough, even though the layout isn’t ideal. We don’t need much space and don’t want a large house. Managing the household for 102m2 (1,098 sq ft) is already enough for me ^^
Big city: We know our neighbors, we live in a fairly green area (looking out onto a park at the back = unobstructed green views) and it is relatively quiet because we’re on the city outskirts. There’s a warm community feeling in our house, nothing hectic or anonymous at all, and parking spaces are (almost) always available ^^. Just across the street at the front is a larger park where we walk the dog. And if we really want forest, we drive 6km (3.7 miles) beyond the highway and we’re in it. Still, we have a tram connection more frequent than every 10 minutes plus bus connections, and everything for shopping is within walking distance. My husband’s workplace is only 3km (1.9 miles) down the road. Our children attend a daycare with only 30 kids in total (!), located 3km (1.9 miles) away by the city forest. There are many families living here and many great, well-used playgrounds. My parents and brother live just around the corner. The city center is only a 15-minute train ride away, where I also work. In the small town, the other grandparents would live across the street on the property, but the other grandparents would be almost 30km (19 miles) away again.
In the small town, the tram runs only every 20 minutes and the suburban train only every 30 minutes, which is quite an adjustment. On Saturdays, everything closes by 4 p.m. at the latest. Sunday bakeries? None. Meeting other children at the playground? Very rare. Switching daycare to a larger one in the small town would be necessary. Specialized secondary schools are only in the city. Our friends are spread out anyway, so that wouldn’t make much difference, especially since my best friend is moving to the countryside and won’t live in the city anymore. Because we live on the ground floor and have the only apartment there, we now have the whole courtyard to ourselves (about 200m2 (2,153 sq ft)), so we can set up paddling pools, grill there, etc. So our children don’t play in a concrete environment and I would almost say they have no disadvantages here. We don’t live in central Berlin ^^. Our city is very green and we live quite far out. The city ends 4km (2.5 miles) away.
Costs: No, €210,000 only for a fairly small and simple bungalow without a basement. Additional costs not included, but we do have equity (which by the way we do have; I don’t know where you get the idea we have no equity and that we would start building immediately; we still have time to save another about €20,000). Green spaces, fences, driveway, paved garden paths, old trees: all already there. The plot is fully serviced as well. Certainly, something would need to be done directly at the house, like creating a terrace. But the foundation has been laid. At least the real estate agent’s commission would be eliminated. I think you can get there with €210,000, and if a few square meters of lawn are missing in the front garden, you can always add that bit by bit later.
Last night I went out for dinner with a friend. Afterwards, we wandered around the Christmas market and then caught trams without waiting that took us home within 10 and 15 minutes. Wonderful! Children’s gymnastics, daycare, playgrounds, everything just outside the door. The older child has a more than 18m2 (194 sq ft) kids’ room. So yes, I love my edge-of-town location because for me it is the perfect combination of peace and city life. The small daycare is definitely a huge, huge plus.
But we simply can’t imagine renting forever, and it’s just too expensive in the city. Paying off a house for 30 years would be a nightmare for me. Rents keep rising here. We always wanted a house. With our current rent, after 30 years we’d have paid €260,000 in rent without utilities. But the rent won’t stay that low.
My friend told me last night we should definitely go for it because it’s just too expensive here, and objectively the houses aren’t worth the money. We recently viewed one in a perfect location on the edge of town, similar to now. Semi-detached house, 500m2 (5,382 sq ft) plot, 130m2 (1,399 sq ft) living space. It was asking €338,000, but we would have had to put in another about €50,000 (DIY time we don’t have: bathrooms, doors, ceilings, walls, partly electrical work, floors, removing one wall…) plus additional costs... we would have ended up over €400,000. And that’s simply too much for us, no matter the location. That’s even more than our city house is worth to us.
I have a slightly different opinion compared to the trend in this thread: we chose location first and made some compromises with the house. Not on the key points like a detached building, but it could have been a bit larger.
However, we are happy to do without that because the location is simply much, much, much more important to us. Extremely fast connections while being surrounded by nature—priceless for us. Unfortunately, it’s an expensive combination for the plot. So, compromises on the house itself were necessary.
Regarding the financing: nowadays, very few people can pay off a house within 15 years in popular locations (okay, except for Steffen, who can easily pay that from his personal funds). There’s nothing wrong with that, as you get long-term security with fixed interest rates.
However, we are happy to do without that because the location is simply much, much, much more important to us. Extremely fast connections while being surrounded by nature—priceless for us. Unfortunately, it’s an expensive combination for the plot. So, compromises on the house itself were necessary.
Regarding the financing: nowadays, very few people can pay off a house within 15 years in popular locations (okay, except for Steffen, who can easily pay that from his personal funds). There’s nothing wrong with that, as you get long-term security with fixed interest rates.
Winniefred10 Dec 2016 15:06Tego: And if I may ask, how much more did this decision end up costing you compared to a house located further outside?