ᐅ Build a new house or wait for an affordable home to become available?
Created on: 4 Oct 2018 23:02
A
armmitcharme
Hello everyone,
Thank you very much for taking the time.
We are completely torn and looking for opinions on our situation.
My husband and I (both 27, plus our daughter who is 11 months old) are considering building a house, even though we never really wanted to, since we are quite adaptable but definitely not decisive.
To begin with: We are both still students. I will become a doctor next May. He will study for a long time yet, but already has completed vocational training and is an excellent homemaker.
Our current savings amount to €80,000 (about $86,000). We would definitely be able to get a loan since my (very financially stable) mother would act as guarantor for us.
We have been searching for almost a year for a suitable house in the beautiful village with a population of about 200 where my mother lives. Several months ago, we were offered a house there (a verbal agreement giving us a right of first refusal, but most people hardly sell their houses here anyway, so the seller can also consider themselves lucky), once the 90-year-old mother of the potential seller can no longer live alone. She is still relatively fit, walking around outside, etc.
We want to move there, specifically so that our little girl can walk to her grandmother’s without crossing a busy road, which applies both to the new development area (about 3 building plots) and to the reasonably priced house offered to us, as they are practically opposite each other.
Details of the old house:
5 rooms, approximately 120 sqm (about 1,290 sq ft) living space
Plot size 700 sqm (about 7,535 sq ft)
3 bathrooms, but one in the shed
Last plot at the edge of the forest (undevelopable, because the forest belongs to my mother)
Huge basement with a shed
Two garages
Built in the 1970s
Inspected by an expert (though somewhat superficial), very well maintained at first impression
Renovations needed, but no major refurbishment required. We estimate immediate necessary investments of around €20,000 (about $21,500)
Lovely garden with mature trees
Cost: €68,000 (about $73,000)
Details of the new development:
Mostly flat northern slope
€9 per sqm (no typo — it’s rural and the municipality supports young families. Nine euros per sqm)
Opposite the forest (undevelopable because it belongs to my mother)
Reasons to wait:
Very low costs, no loan needed
Manageable work (we are both not professionals)
Move in without huge upfront costs
We could gradually add more “luxury,” but start simply
Charm of the old house
The house is worth more than we would pay for it
Reasons against waiting:
We might end up waiting forever
One room is a walk-through
No matter what we do, it won’t be as environmentally friendly as a good new build
The house is not perfect
Reasons to build new:
It feels terrible to “take” the house away from the elderly woman
We could start planning immediately
I will have plenty of time for this over the next six months, but not after that
We could customize a lot according to our wishes
The plots are beautiful and practically a gift
We could build a passive house
Reasons against building new:
Costs are approximately €300,000 (about $323,000) if we are lucky — meaning debt
In this region, property usually never recovers its construction price
An overwhelming number of decisions
Neither of us are experts and could easily be taken advantage of
Any “luxury” must be financed upfront
“If you’re going to build, build properly?” — costs, costs, costs
Building doesn’t happen quickly
What we want:
At least 100 sqm (about 1,075 sq ft), maximum 135 sqm (about 1,450 sq ft)
At least 5 rooms (a second child is planned)
Preferably a low-energy house
2 bathrooms (one can be very small, just some backup option)
Not too much hassle
What I mean by luxury:
A tiled stove (very cozy, and since the forest is family-owned, we get wood extremely cheaply)
The infrastructure — daycare, primary school, proximity to future work, etc. — is ideal for us despite, or because of, the very rural location. But property prices in our very rural area are very low, so we don’t view the potential house as an investment but as a place to settle down. The chance of one of the approximately 10 other suitable houses in the village becoming available by chance seems very low to us.
What would you do?
What would you advise a friend?
We are completely uncertain!
Thank you very much for your help, and have a nice evening!
Anne
Thank you very much for taking the time.
We are completely torn and looking for opinions on our situation.
My husband and I (both 27, plus our daughter who is 11 months old) are considering building a house, even though we never really wanted to, since we are quite adaptable but definitely not decisive.
To begin with: We are both still students. I will become a doctor next May. He will study for a long time yet, but already has completed vocational training and is an excellent homemaker.
Our current savings amount to €80,000 (about $86,000). We would definitely be able to get a loan since my (very financially stable) mother would act as guarantor for us.
We have been searching for almost a year for a suitable house in the beautiful village with a population of about 200 where my mother lives. Several months ago, we were offered a house there (a verbal agreement giving us a right of first refusal, but most people hardly sell their houses here anyway, so the seller can also consider themselves lucky), once the 90-year-old mother of the potential seller can no longer live alone. She is still relatively fit, walking around outside, etc.
We want to move there, specifically so that our little girl can walk to her grandmother’s without crossing a busy road, which applies both to the new development area (about 3 building plots) and to the reasonably priced house offered to us, as they are practically opposite each other.
Details of the old house:
5 rooms, approximately 120 sqm (about 1,290 sq ft) living space
Plot size 700 sqm (about 7,535 sq ft)
3 bathrooms, but one in the shed
Last plot at the edge of the forest (undevelopable, because the forest belongs to my mother)
Huge basement with a shed
Two garages
Built in the 1970s
Inspected by an expert (though somewhat superficial), very well maintained at first impression
Renovations needed, but no major refurbishment required. We estimate immediate necessary investments of around €20,000 (about $21,500)
Lovely garden with mature trees
Cost: €68,000 (about $73,000)
Details of the new development:
Mostly flat northern slope
€9 per sqm (no typo — it’s rural and the municipality supports young families. Nine euros per sqm)
Opposite the forest (undevelopable because it belongs to my mother)
Reasons to wait:
Very low costs, no loan needed
Manageable work (we are both not professionals)
Move in without huge upfront costs
We could gradually add more “luxury,” but start simply
Charm of the old house
The house is worth more than we would pay for it
Reasons against waiting:
We might end up waiting forever
One room is a walk-through
No matter what we do, it won’t be as environmentally friendly as a good new build
The house is not perfect
Reasons to build new:
It feels terrible to “take” the house away from the elderly woman
We could start planning immediately
I will have plenty of time for this over the next six months, but not after that
We could customize a lot according to our wishes
The plots are beautiful and practically a gift
We could build a passive house
Reasons against building new:
Costs are approximately €300,000 (about $323,000) if we are lucky — meaning debt
In this region, property usually never recovers its construction price
An overwhelming number of decisions
Neither of us are experts and could easily be taken advantage of
Any “luxury” must be financed upfront
“If you’re going to build, build properly?” — costs, costs, costs
Building doesn’t happen quickly
What we want:
At least 100 sqm (about 1,075 sq ft), maximum 135 sqm (about 1,450 sq ft)
At least 5 rooms (a second child is planned)
Preferably a low-energy house
2 bathrooms (one can be very small, just some backup option)
Not too much hassle
What I mean by luxury:
A tiled stove (very cozy, and since the forest is family-owned, we get wood extremely cheaply)
The infrastructure — daycare, primary school, proximity to future work, etc. — is ideal for us despite, or because of, the very rural location. But property prices in our very rural area are very low, so we don’t view the potential house as an investment but as a place to settle down. The chance of one of the approximately 10 other suitable houses in the village becoming available by chance seems very low to us.
What would you do?
What would you advise a friend?
We are completely uncertain!
Thank you very much for your help, and have a nice evening!
Anne
Also consider how the situation will be for you when your mother is no longer there (which, of course, nobody likes to think about, but unfortunately that is the natural course of life...). I always find it difficult to base a place to live on other people. Life circumstances can change faster than you would like.
Otherwise, you are probably already noticing: ask five people, get twelve different opinions.
Personally, I’m a self-proclaimed country person. However, my love for rural life ends where I would be throwing money away. In the long term, I believe rural areas will become more popular again, and more people will leave the city—especially because of children. But if I already knew now that I would be losing money with a new build because it is very rural? That all needs to be carefully considered, as a house is too expensive for that!
Otherwise, you are probably already noticing: ask five people, get twelve different opinions.
Personally, I’m a self-proclaimed country person. However, my love for rural life ends where I would be throwing money away. In the long term, I believe rural areas will become more popular again, and more people will leave the city—especially because of children. But if I already knew now that I would be losing money with a new build because it is very rural? That all needs to be carefully considered, as a house is too expensive for that!
Zaba12 schrieb:
I don’t quite understand why building new is being recommended here. Well, life isn’t always just about money.
I got the impression that there is an opportunity here for a happy coexistence with your mom in the neighborhood. That kind of time together can’t be measured in money. Of course, you have to be certain that you really want to live there. Otherwise, the money spent on the house will be wasted, since the chances of finding a buyer in a remote village like Hinterpupsdorf are probably close to zero.
Waiting for the passing or frailty of a third party in order to buy an old, somewhat suboptimal property seems to me to be a waste of time.
Zaba12 schrieb:
I don’t understand why building new is recommended here. If the original poster already mentions that there is a guaranteed loss in value due to weak resale prospects, how can anyone recommend building new??? It’s not just about the construction costs, for example 300,000€ (about 330,000 USD), but the total costs including interest payments. If those end up being around 400,000€ (about 440,000 USD) and the house has to be sold as a retirement home in 30 years for 200,000€ (about 220,000 USD), then you’ve simply lost 200,000€ (about 220,000 USD). And that 200,000€ (about 220,000 USD) is putting it mildly. I watched a documentary a few weeks ago that dealt exactly with this problem. Houses weren’t even selling for 60,000€ (about 66,000 USD). These weren’t rundown properties or anything like that. They were simply located in areas without a major city within a radius of 30 to 50 kilometers (about 20 to 30 miles). I can gladly send you the YouTube link. After that, you probably won’t want to build new anymore.
You mentioned that while you are not very decisive, you are very adaptable.
Does the elderly lady know that you are interested in her house?
If yes, then maybe a shared living arrangement in the house could be possible. You could buy it, add a small extension, and she would have the right to live in a legally designated area as long as she is able to manage on her own.
Of course, it would be clear that it is your house.
I can imagine she might even be happy to have an aspiring doctor and a young family nearby, and that the house would continue to be occupied.
However, if the elderly lady is unaware of (or unwilling to know about) these plans, then forget it and buy one of the plots and have a prefabricated house built on it.
Does the elderly lady know that you are interested in her house?
If yes, then maybe a shared living arrangement in the house could be possible. You could buy it, add a small extension, and she would have the right to live in a legally designated area as long as she is able to manage on her own.
Of course, it would be clear that it is your house.
I can imagine she might even be happy to have an aspiring doctor and a young family nearby, and that the house would continue to be occupied.
However, if the elderly lady is unaware of (or unwilling to know about) these plans, then forget it and buy one of the plots and have a prefabricated house built on it.
Zaba12 schrieb:
And the 200,000 euros are an understatement. A few weeks ago, I watched a documentary that covered exactly this issue. Houses weren’t even selling for 60,000 euros. These weren’t ruins or anything like that. They were simply areas without a major city within a radius of 30 to 50 meters (20 to 30 miles). I can send you the YouTube link if you like. Then you probably won’t want to build new anymore.Zaba12 quotes Zaba12... but the link is meant for the thread starter?
And in our area, many things are always spoken about negatively... deep east... population decline... and so on.
But even here, you still have to pay between 200,000 and 250,000 euros for a used house. At my parents’ village, prices are still over 100,000 euros... and those are really old houses. With surface-mounted sockets, wood stoves, and single-glazed wooden windows...
I would normally advise the original poster to consider buying a used house, but there simply aren’t any available. Sure, you could wait for the grandmother’s house to become available, but she is 90 years old, apparently in fairly good health, and the first child is already born. If things go badly, the child might finish high school before the house becomes free. Relying on the death of individuals is not something one should do; that’s what insurance companies do, using statistical effects. And if you want to live in that location, you need to have a house.