Hello everyone,
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
H
hemali200312 Jun 2019 23:08It also took me a long time to come to terms with financing over 32 years. However, we opted for a full repayment mortgage with a fixed interest rate and a very manageable monthly payment. Renting a house nowadays costs about the same, and in 20 to 25 years our payment will seem like a bargain compared to rent by then.
A fixed interest period of less than 25 years was not an option for us personally, as we value financial security too much.
How old are you?
We also only started in our mid to late 30s.
A fixed interest period of less than 25 years was not an option for us personally, as we value financial security too much.
How old are you?
We also only started in our mid to late 30s.
It is simply the wrong mindset to see a loan as bondage and to want to get rid of it quickly. At times of 8% interest, that was a different approach, but at 1-2%... That is less than inflation, so you could say, as long as you have a loan, you are actually making a profit—exaggeratedly put. Currently, there is nothing better than taking on debt. And with a 2% repayment rate, 4,000 euros net around Berlin is enough.
Lumpi_LE schrieb:
At times when 8% was acceptable, things were differentOften not uncommon for 40 years...H
hampshire12 Jun 2019 23:17I understand that a long commitment and the large amounts of money can be intimidating. Just write down the opportunity costs for yourself. That will make the decision easier.
Construction costs are so high because many people are building at the moment and skilled craftsmen are becoming scarce. From my point of view, this is an indirect consequence of the low interest rate.
Construction costs are so high because many people are building at the moment and skilled craftsmen are becoming scarce. From my point of view, this is an indirect consequence of the low interest rate.
ypg schrieb:
Not uncommon to be 40 years...Really? My parents paid off their mortgage in 15 years and had originally aimed for a maximum of 20 years. Still, the total interest they paid was almost as much as the loan itself.