ᐅ Is Building a House Within My Budget Feasible? Or Should I Give Up on My Dream?
Created on: 13 Dec 2021 22:38
M
Marc240
Hello everyone,
I really appreciate this forum, I have read a lot and the feedback comes from practical experience and is very honest. Thank you for that. That’s why I’m posting my question here, asking for advice.
I am currently facing a dilemma with my dream of building a house. First, I am a fairly cautious person who prefers to avoid financial risks and calculates everything multiple times. I have been keeping a household budget for almost a year now, to avoid overestimating myself. On average, I have about 800€ (around $860) left per month for my project after deducting rent of 1400€ (about $1500). My net monthly income is approximately 3100€-3200€ (about $3350-$3450). During this time, I have lived normally without any restrictions.
I own a plot of land in a good location, fully paid off, which I conservatively estimate to be worth at least 100,000€ (about $108,000).
My equity amounts to roughly 60,000€ (around $65,000), but at least half of that should remain as a safety buffer.
Very roughly asked, is it possible to make something happen with that?
I was actually quite optimistic about it. But the currently steeply rising prices and the responses I have received—at least from prefabricated house suppliers—give me a very different impression.
My idea was actually to build a turnkey house, except for painting and flooring, with 110m2 (about 1184 sq ft) of living space, two full floors, a simple square shape, no basement, no dormers, balconies or projections, a normal standard for today without smart home features or the like, with a concrete slab foundation for well under 300,000€ (around $325,000). That’s a price per square meter of around 2300-2500€ (roughly $250-$270). Isn’t that unfeasible nowadays?
Including additional costs like earthworks, connection fees, architect fees, paving the access road, etc., I don’t want to exceed a total budget of 350,000€ (about $380,000). Furniture, kitchen, and similar items are not included.
This amount is the limit I have set for myself and believe I can manage with my saving rate.
Unfortunately, it doesn’t seem at all possible to get something for that anymore. Do you agree with me? Or is there still some hope?
The house is planned to be built in Rhineland-Palatinate.
Currently, I rent very cheaply! Sometimes I wonder why I’m driving myself crazy day and night, thinking about selling the land and just living a nice life. But then there’s this spark that just doesn’t let go, that won’t give up the dream.
Can you give me some advice?
I really appreciate this forum, I have read a lot and the feedback comes from practical experience and is very honest. Thank you for that. That’s why I’m posting my question here, asking for advice.
I am currently facing a dilemma with my dream of building a house. First, I am a fairly cautious person who prefers to avoid financial risks and calculates everything multiple times. I have been keeping a household budget for almost a year now, to avoid overestimating myself. On average, I have about 800€ (around $860) left per month for my project after deducting rent of 1400€ (about $1500). My net monthly income is approximately 3100€-3200€ (about $3350-$3450). During this time, I have lived normally without any restrictions.
I own a plot of land in a good location, fully paid off, which I conservatively estimate to be worth at least 100,000€ (about $108,000).
My equity amounts to roughly 60,000€ (around $65,000), but at least half of that should remain as a safety buffer.
Very roughly asked, is it possible to make something happen with that?
I was actually quite optimistic about it. But the currently steeply rising prices and the responses I have received—at least from prefabricated house suppliers—give me a very different impression.
My idea was actually to build a turnkey house, except for painting and flooring, with 110m2 (about 1184 sq ft) of living space, two full floors, a simple square shape, no basement, no dormers, balconies or projections, a normal standard for today without smart home features or the like, with a concrete slab foundation for well under 300,000€ (around $325,000). That’s a price per square meter of around 2300-2500€ (roughly $250-$270). Isn’t that unfeasible nowadays?
Including additional costs like earthworks, connection fees, architect fees, paving the access road, etc., I don’t want to exceed a total budget of 350,000€ (about $380,000). Furniture, kitchen, and similar items are not included.
This amount is the limit I have set for myself and believe I can manage with my saving rate.
Unfortunately, it doesn’t seem at all possible to get something for that anymore. Do you agree with me? Or is there still some hope?
The house is planned to be built in Rhineland-Palatinate.
Currently, I rent very cheaply! Sometimes I wonder why I’m driving myself crazy day and night, thinking about selling the land and just living a nice life. But then there’s this spark that just doesn’t let go, that won’t give up the dream.
Can you give me some advice?
11ant schrieb:
"ISO container"At the moment, ISO containers are hard to find and therefore extremely expensive, due to the container shortage. So, at least for now, they are not an attractive option.Nida35a schrieb:
Are there houses in Germany similar to the low-loader suitable houses in the USA, meaning compact, modular dimensions, affordable, and only placed on a slab?For example, SET houses, but they are not exactly inexpensive.
MayrCh schrieb:
At the moment, ISO containers are hard to find and therefore extremely expensive due to the container shortage. So, for now, they are not a viable option. I wasn’t referring to purchasing one of these containers, but rather using them as a conceptual basis. Just taking a closer look at their dimensions, the positions of their handling fittings, and similar details would be a giant leap forward for the not only logistical portability of tiny houses.
hampshire schrieb:
That’s no problem, you can find corresponding concepts in the Netherlands. Oh, are the Dutch already ahead in catching on?
hampshire schrieb:
Crazy idea:
Is it possible to create a pond, place the house on a pontoon, and thereby bypass building regulations by living on a boat? You wouldn’t want to deal with environmental protection and water management authorities any more than with building departments ;-)
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Nida35a schrieb:
Are there actually houses in Germany suitable for low loaders like in the USA, i.e. compact, modular dimensions, affordable, and only placed on a slab?There are very nice mobile homes that can be transported on low loaders and securely anchored with utility connections. However, I don't think these would be financed through a mortgage but rather through a consumer loan. Personally, I find living in a mobile home a good alternative to an apartment in a block if you want to be close to nature.The real question is: Why do you want to build a house?
If I were single, I would never even consider committing to something like that.
The crucial point in financing is your age. If you still have enough working years ahead of you, it can work out. Collateral is sufficiently provided by the plot of land.
If I were single, I would never even consider committing to something like that.
The crucial point in financing is your age. If you still have enough working years ahead of you, it can work out. Collateral is sufficiently provided by the plot of land.
Thank you for the many responses and the stimulating discussion.
I am 32 years old, not single, tax class 1. My/our financial situation is expected to improve; a salary increase of 500€ gross (about $550) is guaranteed and documented for me within 3 years, with tariff increases of 2-3% every 24 months at the latest (usually earlier) due to a strong union, etc. However, I prefer to calculate very conservatively, only with what I have today. Bonus payments and Christmas bonuses were not mentioned in my original post.
I am aware that the beginning will not be easy and I can manage a year without vacation (these are luxury problems for me). I grew up with little money and can handle that well even in crisis times. I also do not want to put my entire savings rate of 1,400€ (about $1,550) into the loan. I would rather make additional repayments at the end of the year. My girlfriend supports me in this, and she will stick with me even if a month gets tight. She also earns income. My question is mainly whether I can manage something for around 350k€ (about $390,000) (details again at the end of the post).
I have now added my age. Does my plot of land count as security for the bank? With a total volume of 450,000€ (about $500,000), I would already have an equity ratio of over 20% from the plot alone, plus equity in cash (30k€ / about $33,000). Is it not possible with my conditions to finance 320k€ (about $355,000) over 20-30 years?
For me, the dream is more than just numbers, so it fits better here. I believe I could manage the project if I can get something for 350k€ (the plot is already owned, as mentioned). My question is more whether I can get something for 350k€?
The plot is not easy to build on; the optimal ratio between what I am allowed to build and what makes sense (lifestyle habits, parking, etc.) was clarified with a preliminary building inquiry. Exterior dimensions of the house at 7x12 m (23x39 feet) will probably be approved; I think this allows for good planning. It is not a square floor plan, but a rectangle. It was late yesterday and I mixed this up. Sorry.
The plot was purchased (at a much lower price than market value – family situation) and fully paid off.
I am not alone, and family planning is on the horizon but not in the near future. My partner also earns income. However, the financing will be solely in my name.
Exactly, the 1,400€ consists of 800€ savings plus 600€ rent. So the maximum affordable is 1,400€.
That means I wouldn’t be at zero at the end of the year; Christmas money, bonuses, etc., are not included. Also, I don’t want to put the entire 1,400€ into financing.
I also see myself at a maximum of 1,200€ (about $1,330) per month, plus the possibility of additional repayments at the end of the year.
It may sound silly, but it’s my wish. Others want to travel, become Instagram influencers, or do other things. I want to own a house in my life (a pre-owned property is not an option; prices in the area are overheated due to few offers). My partner fully supports this. But the financing shall be solely under my name.
I still have 35 working years ahead.
My question is whether I can manage something for about 350k€ with the few, down-to-earth wishes mentioned in my original post. I am starting to doubt that, hence my post. I would appreciate your opinions. Is there hope to get something? No tiny house, no container, but a house built today to modern standards without extraordinary extras and not from Poland.
I have noted the tip about using regional, owner-operated companies—thank you very much!
Reducing to one-and-a-half stories instead of two is a tip I will take to save money—thank you again.
I am 32 years old, not single, tax class 1. My/our financial situation is expected to improve; a salary increase of 500€ gross (about $550) is guaranteed and documented for me within 3 years, with tariff increases of 2-3% every 24 months at the latest (usually earlier) due to a strong union, etc. However, I prefer to calculate very conservatively, only with what I have today. Bonus payments and Christmas bonuses were not mentioned in my original post.
I am aware that the beginning will not be easy and I can manage a year without vacation (these are luxury problems for me). I grew up with little money and can handle that well even in crisis times. I also do not want to put my entire savings rate of 1,400€ (about $1,550) into the loan. I would rather make additional repayments at the end of the year. My girlfriend supports me in this, and she will stick with me even if a month gets tight. She also earns income. My question is mainly whether I can manage something for around 350k€ (about $390,000) (details again at the end of the post).
ypg schrieb:
With a lot of personal work, it might be possible. But the bank alone will not give you the money. They want security that you alone may not be able to provide. In my opinion.
You didn’t mention your age…
I have now added my age. Does my plot of land count as security for the bank? With a total volume of 450,000€ (about $500,000), I would already have an equity ratio of over 20% from the plot alone, plus equity in cash (30k€ / about $33,000). Is it not possible with my conditions to finance 320k€ (about $355,000) over 20-30 years?
11ant schrieb:
First of all: shouldn’t your thread actually be in the financing section (although I might not have seen you there, but that doesn’t have to be a bad thing)?
You already own a plot of land – did you inherit it or buy and fully pay it off yourself (which would be a plus for your creditworthiness)? And: what is allowed to be built on it?
Your requirements sound generally reasonable and down-to-earth. Rectangular shape without fuss is good, but square is rather unfavorable, and two full floors are not worthwhile. At this size, you are on the borderline between a bungalow and a one-and-a-half-story. What does the plot say about this (total area, plot ratio/floor area ratio)?
If the plot allows, maybe build a bungalow; otherwise, a one-and-a-half-story. If you choose a “town villa” with a square floor plan and add a straight single-flight staircase, you end up with 140 sqm (about 1507 sqft) to have as much space as on 110 sqm (about 1184 sqft) without these three space drivers.
For me, the dream is more than just numbers, so it fits better here. I believe I could manage the project if I can get something for 350k€ (the plot is already owned, as mentioned). My question is more whether I can get something for 350k€?
The plot is not easy to build on; the optimal ratio between what I am allowed to build and what makes sense (lifestyle habits, parking, etc.) was clarified with a preliminary building inquiry. Exterior dimensions of the house at 7x12 m (23x39 feet) will probably be approved; I think this allows for good planning. It is not a square floor plan, but a rectangle. It was late yesterday and I mixed this up. Sorry.
The plot was purchased (at a much lower price than market value – family situation) and fully paid off.
hampshire schrieb:
If I were alone, I would consider the tiny house approach. If I were planning to live in it with two people, I would look into holiday home floor plans. If family planning is an option, I would reconsider my expenses and hold back without an earning partner.
I am not alone, and family planning is on the horizon but not in the near future. My partner also earns income. However, the financing will be solely in my name.
Tom1978 schrieb:
I understood it slightly differently:
1,400€ consists of 800€ savings rate + 600€ rent. So 1,500€ loan costs would definitely be too much. Or does the OP really pay 1,400€ rent alone??
Exactly, the 1,400€ consists of 800€ savings plus 600€ rent. So the maximum affordable is 1,400€.
That means I wouldn’t be at zero at the end of the year; Christmas money, bonuses, etc., are not included. Also, I don’t want to put the entire 1,400€ into financing.
WilderSueden schrieb:
Yes, that would be too tight. In that case, I would aim for a maximum of 1,100-1,200€ monthly payments, and then the financing amount would decrease accordingly.
I also see myself at a maximum of 1,200€ (about $1,330) per month, plus the possibility of additional repayments at the end of the year.
apokolok schrieb:
The real question is: why do you want to build a house?
If I were single, I would never think of committing to something.
The key point in financing is your age. If you still have enough working years ahead, it will probably work out. There is enough security with the plot.
It may sound silly, but it’s my wish. Others want to travel, become Instagram influencers, or do other things. I want to own a house in my life (a pre-owned property is not an option; prices in the area are overheated due to few offers). My partner fully supports this. But the financing shall be solely under my name.
I still have 35 working years ahead.
My question is whether I can manage something for about 350k€ with the few, down-to-earth wishes mentioned in my original post. I am starting to doubt that, hence my post. I would appreciate your opinions. Is there hope to get something? No tiny house, no container, but a house built today to modern standards without extraordinary extras and not from Poland.
I have noted the tip about using regional, owner-operated companies—thank you very much!
Reducing to one-and-a-half stories instead of two is a tip I will take to save money—thank you again.
110 sqm (1,186 sq ft) for roughly 300,000 € (about 300K €) is probably still possible today if you skip extras and contribute your own labor.
However, I find your financing a bit tight and would also suggest checking whether such a house really matches your dream. Additionally, consider if such a relatively small property would be easy to sell in a worst-case scenario.
However, I find your financing a bit tight and would also suggest checking whether such a house really matches your dream. Additionally, consider if such a relatively small property would be easy to sell in a worst-case scenario.