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?
ypg schrieb:
House only! Net price! Additional construction-related costs equal to the equity on top.
Of course, the land is on top of that, so 250,000 plus X (the land) becomes the problem. Both ways seem illogical somehow.
If the land is on top, then that’s an unknown amount. So where do the 250,000 come from?
If it’s not on top, then it gets even more confusing, because then it definitely won’t be enough.
But yes, it’s a problem either way.
Berlin85 schrieb:
Hello everyone,
Since I started looking into the topic of building a house two months ago, I have now registered in this forum.
A brief introduction about me and my wife: Both working (civil engineer and real estate assistant) with a net income of around 4xxx.
Equity: 50,000 euros (about 55,000 USD).
You would actually expect that with this equity and net income, buying a property should be straightforward. However, I don’t want to pay off a mortgage for 30-35 years, but a maximum of 25 years, and I also don’t want to stretch the limit completely. This quickly limits the monthly payment and therefore the total amount. 250,000 euros (about 275,000 USD) net plus additional construction-related costs equal to the equity would be the limit here. In Berlin and the surrounding area? Basically unthinkable.
I am a civil engineer (though specializing in concrete repair, so not an expert for single-family homes, etc.) and can therefore assess construction prices, and with my wife’s interest in real estate, we understand the reasons behind the generally high prices for land.
My initial assessment is that with 250,000 euros net plus additional construction costs, there isn’t much new construction possible nationwide.
There have already been many discussions here about construction prices, possible capital, and necessary requirements. When I see “bargain houses” on TV, I am also very skeptical. My assumption is that you won’t have much enjoyment with such a house. Heating systems, plumbing, electrical work, insulation... this is where many tend to overestimate.
Currently, I am looking into prefabricated houses where we would do our own finishing. But I do have some concerns, even though I assume that nowadays the quality usually meets a certain standard.
So what are the options?
Take on 30 years of debt and max out the mortgage?
Foreclosures?
Hope for a bargain plot of land including an affordable prefab shell house with self-finishing (a lot of work and potentially many problems)?
Since I want to start the building process within the next 24-36 months, my first impressions are quite sobering.
The construction company I work for could at least do the foundation slab and underground work like drainage at low cost. I also know structural engineers and others involved. Perhaps with these circumstances, it might still be possible to carry out the project on a “small” budget.
Has anyone here managed something like this? Hello Berlin85,
I completely understand your concerns. I could not, cannot, and will never be comfortable taking on debts of this size (200k and up) and living with the daily consequences for 20 years or more.
Sure, 1,600 euros (about 1,750 USD) per month won’t be the same amount in 20 years as it is today. But first, you actually have to be able to pay 1,600 euros net every month for 20 years! And if house prices return to a more reasonable level — which I believe they will — then those 1,600 euros net per month will not feel any easier, knowing the property is then worth 400k instead of 500k. But of course, this is pure speculation...
The problem with your question is that you’re asking in a house-building forum. Many users here have made the decision to dedicate a large part of their current salary to the house for 20 years or more. Rationalizing and sugarcoating this reality is the norm. So you can expect the answers here to reflect that mindset.
Don’t let yourself be pressured here. Don’t believe everything you read. And don’t get unsettled by comments like, “Why such a tight budget?” or “Why not max out your loan?” Sure, listen to them and consider their points — but remember where you are asking. Every coin has two sides.
You might want to try posting your question in a frugality-focused forum for comparison and see what feedback you get there.
With that said, I wish you success in making your decision and dealing with the consequences.
H
HilfeHilfe13 Jun 2019 07:11Berlin85 schrieb:
Good morning.
I didn’t expect so many replies this late at night. A detailed response will follow.It’s an exciting topic that keeps coming up. I don’t want to take away your concerns. BUT right now you’re earning a good net income, while also keeping in mind that (possibly) children may come and family income could decrease or expenses may increase.
Maybe consider a condominium or a used property after all.
Farilo schrieb:
Sugarcoating the facts and spinning the story is a daily routine here. So the tendency of responses in this forum is clear. Is that really the case? What exactly is being sugarcoated here? If you follow especially the financing subforum, you’ll know that people here often face strong criticism—particularly when it comes to budget issues.
Building a house is a luxury. Most people understand that it’s not the best investment in terms of returns.
Still, self-imposed forced savings lead to building equity. Even if property values decline, there is still an asset (setting aside that other types of investments share similar risks).
So there’s no need to pretend this is a risky or speculative bet on the future—provided the financing is sound.
There are risks, of course, and some can be mitigated.
Look at it from a different angle. Calculate how much previous generations paid in interest to the bank before paying off a property in full—in total.
That’s why a slight drop in house prices is not a disaster. It doesn’t necessarily mean the house needs to be sold.
By the way... renting also costs money.
If someone can’t handle the numbers of a mortgage, then they simply shouldn’t do it.
By now, one might think our society panics about everything.
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