K
kauderwelsch27 Jul 2017 10:47Hello everyone!
After reading here for a while, I’ve now decided to actively participate (with questions! Unfortunately, my knowledge isn’t enough to provide answers).
Who we are:
A brief introduction: we are a family of six facing a move due to work. It doesn’t need to happen immediately. Currently, my husband commutes and the pressure isn’t very high. In the medium term, however, we would like to relocate closer to his job.
We’re not firmly set on building a house, but after watching the market for some time, we’ve realized that we either have to rent a rundown place, spend an enormous amount of money, or hope for a lucky find. Unfortunately, the housing market is not designed for large families. Almost all listings are poorly laid out or too small. Sometimes suitable homes do appear, but often we’re simply too slow due to distance. The same goes for buying existing houses. Somehow, the market seems pretty depleted.
As a sort of Plan B, we’re now considering building and are starting to explore that slowly. We’re (still!) complete beginners and have little clue, so I’m hoping for answers to many basic questions here.
What we are looking for:
We don’t need luxury but want to plan thoughtfully (eventually the children will leave home), aiming for reasonable energy efficiency and, if possible, a clear, simple architectural style. Specifically, a house without unnecessary frills. Ideally designed as a house with “two separate living units.” Not only to potentially benefit from double government subsidies (such as the KFW building loan program / similar grant schemes, though as a layperson I don’t fully understand or know if those loans are really top priority—probably a topic to revisit later)—but also to avoid living in a house that’s too large once the kids have moved out.
We want to build affordably but not cheaply. That means carefully considering what is truly needed, keeping things simple and pared down, and (in many but not all areas) opting for relatively basic finishes. We currently live in a (very well planned!) house of about 140 sqm (1500 sq ft). In our opinion, more space isn’t necessary with good design.
How much will it cost?
I keep running into cost-per-square-meter figures related to building. It’s often stated that you can build for around €1100 (about $1200) per sqm (simple finishes), up to €2000 (about $2200) for higher-end finishes (with no clear upper limit). But I wonder: can you really build a decent house for €1500 (about $1650) per sqm? From browsing various prefab home catalogs, that seems too low to me. But I’m happy to be proven wrong.
Cost calculation:
We don’t want to rush into building just for the sake of it. Right now, we’re mainly considering whether we can afford to build at all. Here is a rough example calculation running through my mind for you to review. Please: where is the mistake? What have I overlooked?
House, 150 sqm (1600 sq ft) - €225,000 (about $247,000)
Plot, fully serviced (picked at random—some can be cheaper, some much more expensive) - €35,000 (about $38,000)
Additional construction costs (according to this forum) - €40,000 (about $44,000)
Garden - €10,000 (about $11,000) (probably underestimated, but this is an area where we can do a lot ourselves)
Contingency for unexpected costs / overruns / whatever - €10,000 (about $11,000)
Contingency for extras (e.g., a new kitchen or carport) - €10,000 (about $11,000)
———
Total: €320,000 (about $351,000)
Architect fees are not included yet. I have no idea what they might cost.
If I enter this into a mortgage calculator, it produces an offer (loan amount minus our equity) with a 15-year term at 2% effective annual interest rate for about €900 (about $980) per month.
Besides the KFW option, there is also the possibility of a loan from the Investment and Structural Bank RLP for €125,000 (about $137,000), also with a 15-year term at 2.0% or 10 years at 1.6%. Not really cheaper, but prepayments of 10% per year are allowed. This is interesting for us because a second income will come in a few years, which we won’t fully need for living expenses (currently one income suffices).
I find this incredibly affordable and wonder: what am I missing? Where’s the catch? If this calculation is even remotely realistic, building a house would be quite manageable.
If you factor in about €400 (about $440) per month for utilities and other running costs, we’d be paying about the same as we do in rent now. In a newly built home close to the job, daycare fees would be eliminated (saving about €250 (about $275) per month) and my husband’s commuting costs would roughly halve (saving another €250 (about $275)). So we would have about €500 (about $550) extra per month to save.
Currently, we live on one income. In no more than five years, a second income will be added. By the time the loan term ends, at least two, more likely three children will be out of the house, so the “granny flat” or second unit could be rented out.
More generally, I’m wondering how to approach this sensibly. How do I find someone who would build for the prices mentioned above (if it’s financially doable)? If we build, it will be securely financed. Of course, that probably means no more three vacations a year. But the children should still be able to continue horse riding or music lessons. How can I get an overview of this complicated market? Is there a good book on the subject? Or any other tips for our first steps?
Thank you very much already,
kauderwelsch (That’s exactly how building feels to me right now)
After reading here for a while, I’ve now decided to actively participate (with questions! Unfortunately, my knowledge isn’t enough to provide answers).
Who we are:
A brief introduction: we are a family of six facing a move due to work. It doesn’t need to happen immediately. Currently, my husband commutes and the pressure isn’t very high. In the medium term, however, we would like to relocate closer to his job.
We’re not firmly set on building a house, but after watching the market for some time, we’ve realized that we either have to rent a rundown place, spend an enormous amount of money, or hope for a lucky find. Unfortunately, the housing market is not designed for large families. Almost all listings are poorly laid out or too small. Sometimes suitable homes do appear, but often we’re simply too slow due to distance. The same goes for buying existing houses. Somehow, the market seems pretty depleted.
As a sort of Plan B, we’re now considering building and are starting to explore that slowly. We’re (still!) complete beginners and have little clue, so I’m hoping for answers to many basic questions here.
What we are looking for:
We don’t need luxury but want to plan thoughtfully (eventually the children will leave home), aiming for reasonable energy efficiency and, if possible, a clear, simple architectural style. Specifically, a house without unnecessary frills. Ideally designed as a house with “two separate living units.” Not only to potentially benefit from double government subsidies (such as the KFW building loan program / similar grant schemes, though as a layperson I don’t fully understand or know if those loans are really top priority—probably a topic to revisit later)—but also to avoid living in a house that’s too large once the kids have moved out.
We want to build affordably but not cheaply. That means carefully considering what is truly needed, keeping things simple and pared down, and (in many but not all areas) opting for relatively basic finishes. We currently live in a (very well planned!) house of about 140 sqm (1500 sq ft). In our opinion, more space isn’t necessary with good design.
How much will it cost?
I keep running into cost-per-square-meter figures related to building. It’s often stated that you can build for around €1100 (about $1200) per sqm (simple finishes), up to €2000 (about $2200) for higher-end finishes (with no clear upper limit). But I wonder: can you really build a decent house for €1500 (about $1650) per sqm? From browsing various prefab home catalogs, that seems too low to me. But I’m happy to be proven wrong.
Cost calculation:
We don’t want to rush into building just for the sake of it. Right now, we’re mainly considering whether we can afford to build at all. Here is a rough example calculation running through my mind for you to review. Please: where is the mistake? What have I overlooked?
House, 150 sqm (1600 sq ft) - €225,000 (about $247,000)
Plot, fully serviced (picked at random—some can be cheaper, some much more expensive) - €35,000 (about $38,000)
Additional construction costs (according to this forum) - €40,000 (about $44,000)
Garden - €10,000 (about $11,000) (probably underestimated, but this is an area where we can do a lot ourselves)
Contingency for unexpected costs / overruns / whatever - €10,000 (about $11,000)
Contingency for extras (e.g., a new kitchen or carport) - €10,000 (about $11,000)
———
Total: €320,000 (about $351,000)
Architect fees are not included yet. I have no idea what they might cost.
If I enter this into a mortgage calculator, it produces an offer (loan amount minus our equity) with a 15-year term at 2% effective annual interest rate for about €900 (about $980) per month.
Besides the KFW option, there is also the possibility of a loan from the Investment and Structural Bank RLP for €125,000 (about $137,000), also with a 15-year term at 2.0% or 10 years at 1.6%. Not really cheaper, but prepayments of 10% per year are allowed. This is interesting for us because a second income will come in a few years, which we won’t fully need for living expenses (currently one income suffices).
I find this incredibly affordable and wonder: what am I missing? Where’s the catch? If this calculation is even remotely realistic, building a house would be quite manageable.
If you factor in about €400 (about $440) per month for utilities and other running costs, we’d be paying about the same as we do in rent now. In a newly built home close to the job, daycare fees would be eliminated (saving about €250 (about $275) per month) and my husband’s commuting costs would roughly halve (saving another €250 (about $275)). So we would have about €500 (about $550) extra per month to save.
Currently, we live on one income. In no more than five years, a second income will be added. By the time the loan term ends, at least two, more likely three children will be out of the house, so the “granny flat” or second unit could be rented out.
More generally, I’m wondering how to approach this sensibly. How do I find someone who would build for the prices mentioned above (if it’s financially doable)? If we build, it will be securely financed. Of course, that probably means no more three vacations a year. But the children should still be able to continue horse riding or music lessons. How can I get an overview of this complicated market? Is there a good book on the subject? Or any other tips for our first steps?
Thank you very much already,
kauderwelsch (That’s exactly how building feels to me right now)
Hello
The mistake in your calculation is partly due to the incorrectly targeted house price. 1100 is definitely not feasible (even if others base their calculations on low-cost construction) and rather applies to shell houses. Prefabricated homes in catalogs are usually priced only in the standard segment – the house you presented is shown with many special features. So don’t be misled.
I’m not very familiar with current local building costs, but where exactly in Rhineland-Palatinate is the house going to be built? And how realistic is the land price?
For six people and their living space requirements compared to an apartment, storage rooms and technical rooms must also be added.
You should realistically calculate 1800 to 2000 if you cannot do much of the construction work yourself.
In short: first carefully consider how much the entire home building process can cost you in relation to your income. Then, based on the actual land price, decide how big a house you can afford. Your other cost estimates aren’t far off; you’re just a bit confused now.
A reasonably priced plot should be buildable without extra costs, both regarding the ground conditions and the building permit/planning permission, allowing you to erect a simple house.
The mistake in your calculation is partly due to the incorrectly targeted house price. 1100 is definitely not feasible (even if others base their calculations on low-cost construction) and rather applies to shell houses. Prefabricated homes in catalogs are usually priced only in the standard segment – the house you presented is shown with many special features. So don’t be misled.
I’m not very familiar with current local building costs, but where exactly in Rhineland-Palatinate is the house going to be built? And how realistic is the land price?
For six people and their living space requirements compared to an apartment, storage rooms and technical rooms must also be added.
You should realistically calculate 1800 to 2000 if you cannot do much of the construction work yourself.
In short: first carefully consider how much the entire home building process can cost you in relation to your income. Then, based on the actual land price, decide how big a house you can afford. Your other cost estimates aren’t far off; you’re just a bit confused now.
A reasonably priced plot should be buildable without extra costs, both regarding the ground conditions and the building permit/planning permission, allowing you to erect a simple house.
markus270327 Jul 2017 11:27Hello,
a few comments:
I’m not familiar with KfW funding, but is there a bank in Rhineland-Palatinate similar to Bayernlabo? With four children in the household, that could definitely be interesting, as they offer subsidies for each child. However, if you go for that, you won’t be able to receive KfW funding.
You won’t be able to build anything for €1,100. I would consider €1,500 as an absolute minimum here in Bavaria. We built for about €1,700, and while everything is nice, there is no luxury included. No dormers, no bay windows, no large glass facades, etc. Flooring and painting are extra costs. Check out the large well-known construction company that is affordable but solid.
For six people, I would calculate a house price of at least 150 m² (1,615 sq ft) × €1,700, so approximately €255,000.
Regarding financial planning, it’s hard to say—you’ll have to work through that yourselves. You mention €10,000 for other items (kitchen). After that, there won’t be much left, if that even covers a kitchen.
Just arrange a meeting with a company of your choice. That will give you a better idea. Catalog prices alone don’t help much...
a few comments:
I’m not familiar with KfW funding, but is there a bank in Rhineland-Palatinate similar to Bayernlabo? With four children in the household, that could definitely be interesting, as they offer subsidies for each child. However, if you go for that, you won’t be able to receive KfW funding.
You won’t be able to build anything for €1,100. I would consider €1,500 as an absolute minimum here in Bavaria. We built for about €1,700, and while everything is nice, there is no luxury included. No dormers, no bay windows, no large glass facades, etc. Flooring and painting are extra costs. Check out the large well-known construction company that is affordable but solid.
For six people, I would calculate a house price of at least 150 m² (1,615 sq ft) × €1,700, so approximately €255,000.
Regarding financial planning, it’s hard to say—you’ll have to work through that yourselves. You mention €10,000 for other items (kitchen). After that, there won’t be much left, if that even covers a kitchen.
Just arrange a meeting with a company of your choice. That will give you a better idea. Catalog prices alone don’t help much...
Marvinius II27 Jul 2017 11:30I would not estimate below 1800 euros/m2 (about 167 USD/ft2), which amounts to 270,000 euros (about 298,000 USD) for a 150 m2 (1,615 ft2) house with a slab foundation. As a very rough rule of thumb, you can expect additional costs of 20-30%. With a lot of DIY work and a flat plot, it might be around 20%, otherwise closer to 30%. This brings you to around 350,000 euros (about 387,000 USD). On top of that comes the land purchase and further expenses for the kitchen, new furniture, and lighting.
K
kauderwelsch27 Jul 2017 11:32Thank you all!
Just very briefly: I calculated above with 1500€ per square meter. So that is unrealistic? What a pity!
Just very briefly: I calculated above with 1500€ per square meter. So that is unrealistic? What a pity!
K
kauderwelsch27 Jul 2017 11:35markus2703 schrieb:
I am not familiar with KfW subsidies, but is there a bank in Rhineland-Palatinate similar to BayernLabo? It would definitely be interesting for a household with four children, as they offer grants for each child. However, in that case, you would no longer be eligible for KfW funding.
That is the investment bank of Rhineland-Palatinate I mentioned above. The loan does not become significantly cheaper, but early repayments are possible, and they provide subordinated financing.