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?
Farilo schrieb:
Here are several examples of situations where people urgently need money:
(please no debates about why or how, these are just examples)
- Daughter wants to go on a student exchange to the USA
- Someone wants to buy a MacBook Pro
- Someone wants to have a fireplace installed
- Someone wants to buy a trailer to take garden waste, etc., to the recycling center
- Tax back payment
- Washing machine and dryer both break down at the same time
- On vacation, someone wants to spontaneously get a diving certificate with the family I can accept the tax back payment, but everything else falls more into the category of “I need everything immediately.” If I can’t afford something right now, I simply save for it. If there’s not enough money for the USA exchange, I have to tell my daughter that it’s not affordable financially, and she learns that not everything is always possible. As a child, I often heard that this or that was too expensive (also because of my parents’ mortgage). That led me to be patient and in many things more modest than others, looking for practical solutions instead of focusing on not having the perfect solution.
I don’t see this as a disadvantage.
Yes, a new washing machine is understandable, but you can get one for well under 1000 euros, and a dryer is a luxury. It’s actually not necessary.
I share the view of the previous commenters: there are things you must have, and there are things you would like to have. A diving license, student exchange programs, and a fireplace clearly fall into the latter category. In contrast, a major car repair, a broken heating system, or a burst water pipe must be paid for.
An appliance costing less than 1000€ (about 1100 USD) should not really be the breaking point.
You can take a vacation on the Baltic Sea or the Bahamas. Of course, if someone plans to only stay at home for years, they have probably overstretched themselves.
A silly example, but I have a horse. It has two saddles (for different disciplines), and one no longer fits. At the moment, there is no new one and that’s final. It’s not possible. So, I will use the other saddle and that’s that. If the animal gets sick, which can obviously become quite expensive, then that would fall under the “must” category – after all, it is a living being.
An appliance costing less than 1000€ (about 1100 USD) should not really be the breaking point.
You can take a vacation on the Baltic Sea or the Bahamas. Of course, if someone plans to only stay at home for years, they have probably overstretched themselves.
A silly example, but I have a horse. It has two saddles (for different disciplines), and one no longer fits. At the moment, there is no new one and that’s final. It’s not possible. So, I will use the other saddle and that’s that. If the animal gets sick, which can obviously become quite expensive, then that would fall under the “must” category – after all, it is a living being.
Tassimat schrieb:
No worries, you can be as blunt as you want.
I’ll keep my reply short due to lack of time and only respond to half of it.
The point was that you have to compare two equivalent housing options. You could also rent a house and then compare that to buying a house of the same size. What you cannot do is compare a two-room apartment to a house. Such a comparison is nonsense to the power of ten.
Regarding the example expenses you mentioned: yes, they are all expensive, but except for repairs, you’re naming costly impulse purchases (trading vouchers) and luxury expenses (Apple hardware) that don’t require saving up reserves. I know people who have a dedicated tech budget for things like that. My point was about what is actually urgently necessary and requires high reserves, like broken household appliances or especially, at some point, the heating system. Great!
I understand what you mean. But I wasn’t focusing so much on comparing the different forms to each other. It was more of a spontaneous thought. I could put it differently:
If money is available, who would prefer to rent a house instead of owning the exact same house?
Of course, if you’re a multimillionaire, that question isn’t so easy to answer.
But usually, forum users here favor ownership. That’s what I wanted to point out.
And about impulse purchases and so on:
For me personally, that’s part of life. The ability to sometimes make impulse buys or decisions without having to live on just rice and beans for eight months.
But again, everyone does it as they need or like.
Niloa schrieb:
@Farilo your examples are a bit far-fetched. If there isn’t enough money, then you simply don’t buy a MacBook Pro but a more affordable PC, or you don’t get a diving certification, and so on. These are really luxury issues, and I don’t think they depend on whether you rent or own, but rather on whether you earn well or not.Hi Niloa,Well, that’s exactly what I mean… If you’re willing or able to give up all luxury in life, then yes, you can buy a house with a very tight budget (1 EUR per month over but everything paid).
That wouldn’t be my lifestyle. And I’m definitely past the wild years. I don’t need to travel abroad three times a year, have fancy cars, expensive clothes, etc. I had those, it was nice and fun, but I don’t need that anymore.
However, I wouldn’t want to give up the option to spontaneously get a MacBook, a diving certification, or whatever else.
Of course, you need to earn well! But “well” is always relative to, in our case, the repayment rate for the house.
If you buy cheaper/smaller/more modestly or save longer until you have a sufficient down payment, then the monthly installment goes down. And then with 4,500 EUR you can also pay an 800 EUR monthly payment and still live your “luxury.”
What I ultimately want to say is that you shouldn’t stop “living” just to own a house.
I recommend a house to everyone! I wish everyone could have one!
But if it’s not possible, it’s not possible!
Trying to justify 500,000 EUR and a monthly payment of 1,650 EUR ++ to make it happen is often not the right approach in the long run.
Farilo schrieb:
And regarding impulse purchases, etc.
Well, for me personally, that’s part of life. The ability to make such impulse purchases/decisions now and then without having to live on rice and beans for eight months afterward.
But again... everyone according to their own needs and preferences. But what rational and sensible person plans their financing so tightly that every cent has to be turned over? Banks don’t even allow that.
It’s like renting an apartment that’s too expensive and only eating toast with salami and ketchup there.
When you decide to build or buy a house, you are deciding against renting. You can pay too much in rent or have a financing installment that’s too high. It’s always individual perspectives that don’t even allow a fair comparison of whether renting or owning is better.
If you approach everything responsibly, as you should, then with either option you can save enough to live reasonably well and still allow for spontaneous expenses like that.
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