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
hampshire14 Jun 2019 07:06The consideration of maintaining independence is completely legitimate and important in making this decision. Living one’s life is what truly matters—not money. Being tied to the bank is not a form of enslavement. No one is forced to keep their house. If I want to move abroad, I can simply sell the property, the bank receives its money, and a new chapter begins.
Bardamu schrieb:
In a rental apartment, you also pay monthly, but you have a three-month notice period and can then look for something cheaper (or nothing at all and just emigrate ). Try telling that to a bank that still wants 300,000 from you.
This has nothing to do with "messing up," it’s just common sense telling you that being forced to pay 1800 euros per month for the next 30 years is not great for living an independent life.
This is, of course, not directed against home builders or homeowners, but generally at full financers who need to calculate a hundred times whether it can really work.
We also earn about 5000 euros per month and still don’t want to borrow money from the bank for a house. I’d rather pay 1000 euros rent and enjoy a nice life.I don’t want to open a rent vs. buy discussion here. And honestly, I wouldn’t want to still be paying off my mortgage when I retire. A prerequisite for our house build was sound financing, which is possible despite the high amount, thanks to equity. In my opinion, due to cheap borrowing costs, some prospective new-build buyers are taking risks that would have been unthinkable in the past.But renting is not a cure-all either. In a way, my mortgage payment is fixed for the next 20 years, or it will even decrease after 10 and 15 years as the loans are paid down. With rent, it’s different: the landlord can increase it as they please (within limits). Even moving to a similar place usually means a rent increase.
Also, saving and buying at an older age only helps to a limited extent, because how much will 100,000 euros of cash/equity be worth in 20 years?
EDIT: @TE what kind of answer are you expecting from your confusing initial post? You haven’t mentioned the size of the house or the desired standard. We basically know nothing about your building project! You know the typical figures often mentioned here in the forum regarding new builds. Subtract your personal contribution from the frequently cited 2000 euros per square meter (2000 euros per square meter) of living space plus ancillary construction costs and all, and you’ll get an approximate sum.
Bardamu schrieb:
Am I ready to rent from the bank for decades (for most people 25 to 35 years) and therefore give up freedom, vacations,...Except for freedom (which everyone defines differently)...
Bardamu schrieb:
when you feel the urge to live and travel, try new things, pursue your hobbies...it’s simply a question of priorities. I prefer to see my children playing in my garden, living and enjoying 351 days a year better than many renters, and still going on vacation for the other 14 days... maybe not every year to the Bahamas or on a touristic research ship to see penguins. But again, everyone sets their priorities differently. That’s completely legitimate. But that person then also doesn’t want to buy a house.
Bardamu schrieb:
renting from the bankBardamu schrieb:
being tied to someone who wants between 1200 and 1800 euros every month. And always. Every month until retirement.Bardamu schrieb:
and giving up the good feeling of owing nothing to anyone?That is German Angst, in my opinion.
face26 schrieb:
That is German Angst, in my opinion. So, according to you, everyone who only spends the money they have actually earned is “afraid” and “chicken”? Then, by your logic, it must be very brave and heroic to go into debt with others for something you really can’t afford.
As I said, owning a house is very nice and generally improves one’s quality of life, but nowadays many people really think they can get “cheap” money from the bank and finance 100 percent of the purchase. However, what is saved on low interest rates is balanced out—and probably exceeded—by higher prices for building materials and labor.
And no one can convince me that taking out a large loan actually leads to a profit because of low interest rates and inflation.
A small gain within a large loss does not equal profit.
hampshire schrieb:
Considering independence is completely valid and important when making a decision. Living your life is what matters, not money. Being tied to the bank is not slavery. No one is forced to keep their house. If I want to emigrate, I simply sell the property, pay back the bank, and start a new chapter. Unfortunately, in reality, you can’t just sell your house so easily. It’s like with a new car: once it’s been driven a kilometer, it’s worth only half as much because it’s used. A bit of an exaggeration, but a house is similar. The transaction costs are definitely lost. And the bank usually wants a prepayment penalty, too.
My consideration with an (overpriced) house was how many years I would have to pay off the mortgage before I could sell without being left with any remaining debt. It turned out to be more than 10 years... Thinking about that gave me stomach aches, regardless of the monthly payment. As luck would have it, I now bought a house below market value. It was still expensive relative to my financial situation, and the mortgage payment is high, but I sleep peacefully.
Petyr Baelish on national debt, Game of Thrones"]
They're only numbers—numbers on paper. Once you understand them, it's easy to make them behave.
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[QUOTE="Bardamu schrieb:
Am I willing to pay rent to the bank for decades (for most people 25 to 35 years) and therefore give up freedom, holidays, and the good feeling of not owing anything to anyone? I see. What is a typical path here? Living with parents until 18, then renting until finishing university, and continuing to rent until 35 while saving equity. In total, 35 years well lived in dependence and renting, but “renting from the bank” until retirement is unacceptable? Strange...
Finally, a provocative statement: The greatest restrictions on freedom are, unfortunately, one’s own children.
N
nordanney14 Jun 2019 09:07Tassimat schrieb:
Finally, a provocative statement: The biggest limitations on freedom are, unfortunately, your own children. That's true (at least for about 10 years), but at the same time, they are also the source of greatest joy!!!