ᐅ Homebuilding Forum – Would You Choose to Buy or Build a House Again?
Created on: 11 Dec 2015 11:09
X
xycrazy
Hello,
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
I am also firmly convinced that, in most cases, building a house is economically unwise, and that renting while investing elsewhere is the better option.
BUT: I have built a house anyway, and I would do it again. For us, very little went wrong, and the few minor issues that did arise were quickly resolved.
The most important thing: the feeling of living in your own home is wonderful. Before, we lived in a similarly sized rental property... but now it’s a whole new world for us. (Almost) all the work around the house suddenly becomes enjoyable because you built it exactly the way you want it. And all this without any arguments with a landlord or property management.
Flexibility: I work in a job where there is a high likelihood that my whole family will live abroad for a few years, one or two times during our lives—and we want to do this. What’s the problem? In my case, the employer even covers the costs, but even if they don’t... in our situation, the house rents within a few hours.
Building a house does not mean you have to live in it your whole life. Of course, switching houses several times costs more than renting, due to all the additional expenses that come with ownership. But I also change my car regularly, knowing full well that keeping the old one would be cheaper. Quality of life!
BUT: I have built a house anyway, and I would do it again. For us, very little went wrong, and the few minor issues that did arise were quickly resolved.
The most important thing: the feeling of living in your own home is wonderful. Before, we lived in a similarly sized rental property... but now it’s a whole new world for us. (Almost) all the work around the house suddenly becomes enjoyable because you built it exactly the way you want it. And all this without any arguments with a landlord or property management.
Flexibility: I work in a job where there is a high likelihood that my whole family will live abroad for a few years, one or two times during our lives—and we want to do this. What’s the problem? In my case, the employer even covers the costs, but even if they don’t... in our situation, the house rents within a few hours.
Building a house does not mean you have to live in it your whole life. Of course, switching houses several times costs more than renting, due to all the additional expenses that come with ownership. But I also change my car regularly, knowing full well that keeping the old one would be cheaper. Quality of life!
The question, Tego, is whether you will ever get the house back in the same condition you left it after renting it out. I would argue that this is usually not the case. That makes it worthwhile to consider selling before moving abroad. Because even when living abroad, you probably don’t want tenants constantly calling you about this or that not working. What do you think?
We would build again. We have now been living in the house for 18 months and, except for the roller shutters, have had no warranty or guarantee issues. The construction itself went smoothly without major conflicts.
Our house is our personal luxury; the car is parked right outside, and we decide when to run the heating—summer or winter. The groceries only need to be carried up two steps. No homeowners’ association to consider, no risk of a 10% rent increase every year…
The list could go on.
The monthly expenses (including reserves for the house) amount to one-third of our income, which I can live with.
Our house is our personal luxury; the car is parked right outside, and we decide when to run the heating—summer or winter. The groceries only need to be carried up two steps. No homeowners’ association to consider, no risk of a 10% rent increase every year…
The list could go on.
The monthly expenses (including reserves for the house) amount to one-third of our income, which I can live with.
C
chand198616 Oct 2017 14:45There were very nuanced responses to my thesis. I don’t want to leave a reply unanswered.
You can “force” yourself to save in other ways besides owning a single-family house. A savings plan with a standing order, set up right after your salary is paid, taking money directly from your checking account. Where the money goes is a different discussion.
That’s a matter of perspective. You consider having 90% of your salary available in your mid-50s a good situation? Okay! But the flip side is that hardly any (or few) profitable investments have been made that, after two-thirds of life have passed, would increase income beyond 100% of a salary. And that with compound interest effects you could have benefited from over 30 years. Please don’t get me wrong: this is certainly enough. But compared to even conservative wealth building over such a period, it is not “good.”
Your case, Karsten, is somewhat different. You built late, small, and inexpensively; you paid it off quickly. You are not comparable with young homebuyers who finance for 20–30 years on credit in rural areas. You will have a small, low-maintenance, and new home during retirement that surely does not yet show signs of age.
And what do those who have to work in the city say? I’m one of them. Every morning from my nice countryside estate into the traffic jam and the same again in the evening, then completely exhausted and stressed, missing the moments of enjoyment in my rural idyll — every working day. To balance that out, tying up a huge amount of capital? No way!
Imagine how glad the landlords are.
That’s due to the political clowns’ obsession with a balanced budget, zero taxes for corporations, and the general zeitgeist of considering anything state-run as left-wing or socialist instead of catering to private interests.
That is a very important point and why I emphasize flexibility so much: Do you believe that in the next 20 years (let’s say a financing lasts that long) the working world will not change significantly and that things that are taken for granted today might disappear?
These are THE reasons to go ahead with it beyond economic considerations.
Evolith schrieb:
But where am I more consistent in “saving”? When paying off the house or by saving a freely chosen amount into my account during the rental period?
You can “force” yourself to save in other ways besides owning a single-family house. A savings plan with a standing order, set up right after your salary is paid, taking money directly from your checking account. Where the money goes is a different discussion.
Evolith schrieb:
My parents are now in their mid-50s and have paid off their house. Now they have 90% of their salary available to save and really enjoy life.
That’s a matter of perspective. You consider having 90% of your salary available in your mid-50s a good situation? Okay! But the flip side is that hardly any (or few) profitable investments have been made that, after two-thirds of life have passed, would increase income beyond 100% of a salary. And that with compound interest effects you could have benefited from over 30 years. Please don’t get me wrong: this is certainly enough. But compared to even conservative wealth building over such a period, it is not “good.”
Nordlys schrieb:
Paragraph one—that’s me. If I am debt-free in five years and retire, I will have about 4,000 gross and a paid-off house. My wife is younger; she still earns 1,000 more with her part-time job. I don’t understand why that shouldn’t count as retirement provision.
Your case, Karsten, is somewhat different. You built late, small, and inexpensively; you paid it off quickly. You are not comparable with young homebuyers who finance for 20–30 years on credit in rural areas. You will have a small, low-maintenance, and new home during retirement that surely does not yet show signs of age.
Nordlys schrieb:
Rural or urban... well, who wants to live in the city with all the stress, dirt, buses and trains full of pizza leftovers, fast food ketchup, and beer cans [...]
And what do those who have to work in the city say? I’m one of them. Every morning from my nice countryside estate into the traffic jam and the same again in the evening, then completely exhausted and stressed, missing the moments of enjoyment in my rural idyll — every working day. To balance that out, tying up a huge amount of capital? No way!
tomtom79 schrieb:
Basically, you’re right, but when I see the current state of rents and the competition among tenants, I am glad to be a property owner.
Imagine how glad the landlords are.
tomtom79 schrieb:
And nothing is happening in social housing, absolutely nothing. Only exclusive new constructions are being built.
That’s due to the political clowns’ obsession with a balanced budget, zero taxes for corporations, and the general zeitgeist of considering anything state-run as left-wing or socialist instead of catering to private interests.
tomtom79 schrieb:
And always the argument about moving making you freer—well, I come from the metal industry, and within 50km (30 miles) here, everything you need is available, so there’s definitely no need to relocate.
That is a very important point and why I emphasize flexibility so much: Do you believe that in the next 20 years (let’s say a financing lasts that long) the working world will not change significantly and that things that are taken for granted today might disappear?
Evolith schrieb:
I love our house. Because of that, so many things have become easier. Kid has too much energy? Off to the garden. I feel like I’m putting on weight? Out to the garden. My husband is lounging on the couch... out to the garden.
We now have everything on one level and also more space. The house suits 95% of our needs. A friend recently said you can tell how proud we are of our house and how happy we are.
Egon12 schrieb:
Our house is our very own luxury,
These are THE reasons to go ahead with it beyond economic considerations.
B
Bieber081516 Oct 2017 14:52Basti2709 schrieb:
our installment, which is clearly below the rentYou don’t mention the equity you have invested; therefore, this comparison can’t be properly assessed. Based on my experience as a tenant of several apartments and a single-family house, and now as the owner of a single-family house, I have always found renting to be cheaper, even in terms of monthly expenses. Maybe someday, in the distant future, this will change and I will be able to "live off" my house, if circumstances allow.chand1986 schrieb:
This also means, conversely, that few (if any) profitable investments were made that would have increased one’s income beyond 100% of the employee salary after about two-thirds of life. And that despite compound interest effects that could have been leveraged over 30 years.
Please don’t misunderstand: It’s certainly enough. But compared to even conservative wealth building over such a period, it’s not "good."It’s always a question of where one’s priorities lie in life: If you want to leave a large inheritance (which will most likely be squandered by the next 2-3 generations at a rate of 95%), then investing wisely is certainly advisable (a single-family house probably wouldn’t fall into that category). If you’re saving for a big goal (maybe a huge yacht for retirement and prioritize that above all else), then you can do that too.
But many people aim to maximize quality of life throughout their lifetime. For many, owning property is a crucial step toward that, since it provides a level of living comfort that is otherwise hard to achieve (with the exception of flexibility).
I don’t want a cheap car, nor a 37-inch TV, and I do like to travel farther away sometimes. Likewise, when it comes to housing, I want to realize what I truly enjoy.
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