Hello 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)
This is still a jungle.
Let’s clear it up.
The decision to build must be definite. Then please first buy a suitable plot of land. Please familiarize yourself with the planning regulations. For example, if the development plan states a floor area ratio of 0.3, that means if you buy 600 sqm (about 6460 sq ft) of land, only 0.3 of that, roughly one third, can be built on. (You will need this for a 150 sqm (1615 sq ft) house. Terraces also count as built area.) Pay attention to the land quality. Is it very steep? That’s expensive! Excavation or fill. Is it well shaped? Rectangular with a garden facing southwest possible? What else does the development plan allow? Two stories? Or only one and a half?
Once that is clarified, go to the notary and buy. Having land is never a mistake. All options are still open. You can still back out. You can always sell land again without loss.
But: You don’t want to back out. You want to build on it.
Now look online at floor plans of houses that could be an option. There is a lot to see. Now you will start to get an idea of what you like, what could work, etc. Decide on a construction type. Prefabricated house or traditional brick-and-mortar. Prices are almost the same. – With these ideas, go to a builder, ideally active locally, who does not just subcontract but has many trades in-house, who has a good reputation in the area, and who gives you a fixed price for the house as a turnkey project, usually without kitchen, floor coverings, and painting work, sometimes these are also included. Both options exist.
When planning—cheap but not cheap-quality!—pay attention to some parameters: few or no floor-to-ceiling windows, white window frames. No bay windows, turrets, recesses, etc. No basement. (Better get 100 sqm (1075 sq ft) more land instead!) Roof with Harz pan tiles. No wood-burning stove. Then you might manage with about 1600 USD (or other currency) per sqm (about 150 sq ft). But as soon as you add many extras, costs will spiral out of control.
KfW loans are usually not worth it. The house becomes more expensive. You borrow more, even if the interest rate is better. The RLP loan is clearly a “take me” offer.
During the construction phase, expect small surprises. To keep them as small as possible, treat the workforce— the crew, the craftsmen on site— well. (Cake, coffee, tips, drinks.) Appeal to their pride in their workmanship if you feel they are careless. (“You wouldn’t deliver this to me, right? That’s beneath your standards!”) – Make a kind of spreadsheet (Excel or paper ledger) where you assign sums to each trade. Soloist. Otherwise small extras add up—a thousand here, a thousand there, “it’s not much,” and in the end, there’s no money left for the garden.
So in short: decision – land – plan – act – keep control. Karsten
Let’s clear it up.
The decision to build must be definite. Then please first buy a suitable plot of land. Please familiarize yourself with the planning regulations. For example, if the development plan states a floor area ratio of 0.3, that means if you buy 600 sqm (about 6460 sq ft) of land, only 0.3 of that, roughly one third, can be built on. (You will need this for a 150 sqm (1615 sq ft) house. Terraces also count as built area.) Pay attention to the land quality. Is it very steep? That’s expensive! Excavation or fill. Is it well shaped? Rectangular with a garden facing southwest possible? What else does the development plan allow? Two stories? Or only one and a half?
Once that is clarified, go to the notary and buy. Having land is never a mistake. All options are still open. You can still back out. You can always sell land again without loss.
But: You don’t want to back out. You want to build on it.
Now look online at floor plans of houses that could be an option. There is a lot to see. Now you will start to get an idea of what you like, what could work, etc. Decide on a construction type. Prefabricated house or traditional brick-and-mortar. Prices are almost the same. – With these ideas, go to a builder, ideally active locally, who does not just subcontract but has many trades in-house, who has a good reputation in the area, and who gives you a fixed price for the house as a turnkey project, usually without kitchen, floor coverings, and painting work, sometimes these are also included. Both options exist.
When planning—cheap but not cheap-quality!—pay attention to some parameters: few or no floor-to-ceiling windows, white window frames. No bay windows, turrets, recesses, etc. No basement. (Better get 100 sqm (1075 sq ft) more land instead!) Roof with Harz pan tiles. No wood-burning stove. Then you might manage with about 1600 USD (or other currency) per sqm (about 150 sq ft). But as soon as you add many extras, costs will spiral out of control.
KfW loans are usually not worth it. The house becomes more expensive. You borrow more, even if the interest rate is better. The RLP loan is clearly a “take me” offer.
During the construction phase, expect small surprises. To keep them as small as possible, treat the workforce— the crew, the craftsmen on site— well. (Cake, coffee, tips, drinks.) Appeal to their pride in their workmanship if you feel they are careless. (“You wouldn’t deliver this to me, right? That’s beneath your standards!”) – Make a kind of spreadsheet (Excel or paper ledger) where you assign sums to each trade. Soloist. Otherwise small extras add up—a thousand here, a thousand there, “it’s not much,” and in the end, there’s no money left for the garden.
So in short: decision – land – plan – act – keep control. Karsten
Hello,
somehow I have the feeling that every item is nicely calculated.
@House price: Could be about right if everything is off-the-shelf. However, not with KfW 55 standard and also not with two residential units (just my gut feeling).
@Land price: Maybe in a structurally weak area. Usually, it is rather two, three, or even four times more or higher.
@Additional construction costs: Could be accurate.
@Garden: If you don’t plan to finish the garden within the next 2-3 years, then that works.
@Reserves: The amount is okay for a start.
@Extra costs: If you don’t like what the prefabricated house provider lists off-the-shelf, that amount disappears immediately. So, you won’t have a kitchen or a carport.
We are building early next year a solid 132m² (1,421 sq ft) house with a basement, KfW 55 standard, without much luxury, on a plot costing 92,000€ (about 92k euros). For additional construction costs, outdoor landscaping, and a carport, we budgeted 78,000€ (about 78k euros). The kitchen and moving costs are not included in that.
An architect will cost you around 45,000€ (about 45k euros) according to HOAI, if you want a custom design, for service phases 1-8 (non-negotiable).
Before I got involved with building and when it became concrete for us, I also thought I could manage with 400,000€ (about 400k euros) all-inclusive... that was a misjudgment.
somehow I have the feeling that every item is nicely calculated.
@House price: Could be about right if everything is off-the-shelf. However, not with KfW 55 standard and also not with two residential units (just my gut feeling).
@Land price: Maybe in a structurally weak area. Usually, it is rather two, three, or even four times more or higher.
@Additional construction costs: Could be accurate.
@Garden: If you don’t plan to finish the garden within the next 2-3 years, then that works.
@Reserves: The amount is okay for a start.
@Extra costs: If you don’t like what the prefabricated house provider lists off-the-shelf, that amount disappears immediately. So, you won’t have a kitchen or a carport.
We are building early next year a solid 132m² (1,421 sq ft) house with a basement, KfW 55 standard, without much luxury, on a plot costing 92,000€ (about 92k euros). For additional construction costs, outdoor landscaping, and a carport, we budgeted 78,000€ (about 78k euros). The kitchen and moving costs are not included in that.
An architect will cost you around 45,000€ (about 45k euros) according to HOAI, if you want a custom design, for service phases 1-8 (non-negotiable).
Before I got involved with building and when it became concrete for us, I also thought I could manage with 400,000€ (about 400k euros) all-inclusive... that was a misjudgment.
K
kauderwelsch27 Jul 2017 11:53Thank you for this detailed response @Nordlys
That's exactly where the problem lies. I can only buy land once I know whether I can afford the house bar.
The example plot mentioned is about 760 square meters (8,180 square feet), with a site coverage ratio of 0.4 and a floor area ratio of 0.8. It faces south but has a slight slope.
This is just an example. When making a real decision to build, one would search more thoroughly.
At the moment, I have a feeling that financially, this whole thing might blow up in our faces. :/
That's exactly where the problem lies. I can only buy land once I know whether I can afford the house bar.
The example plot mentioned is about 760 square meters (8,180 square feet), with a site coverage ratio of 0.4 and a floor area ratio of 0.8. It faces south but has a slight slope.
This is just an example. When making a real decision to build, one would search more thoroughly.
At the moment, I have a feeling that financially, this whole thing might blow up in our faces. :/
K
kauderwelsch27 Jul 2017 11:56@Zaba12 thank you for listing your costs. This helps me see things more clearly. Especially the architect fees shed some light on the matter.
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