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?
saralina87 schrieb:
You don’t really need excuses, but it’s important to stay realistic.
100 square meters (1,076 square feet) is nice and all, but if a family moves in, you have to be aware that it will feel cramped.
It definitely makes sense to coordinate such a project with your partner. If it no longer fits, you can just sell it. After all, it’s a new build, and relatively affordable. You’ll likely find buyers, and then you can look for something else if all else fails.
There will certainly be a couple looking for a cozy home at a fair price.
W
WilderSueden18 Dec 2021 11:29ypg schrieb:
I would suggest scheduling a bank appointment: in my opinion, you won’t get it alone, 1% is also unlikely, but you have to create some facts first. I am financing on my own as well and didn’t have any issues. My income is a bit higher, so is the loan amount, and the bank even includes my partner and child in the calculation even though my partner also has a job (at least back from parental leave now 😉 ). Banks calculate much less conservatively than you might expect. However, you should be aware that the bank’s calculation doesn’t really account for something like your own retirement savings. And before anyone says it… no, in my opinion a house alone is not sufficient as retirement provision unless you sell it. A new build today will be 40 years old eventually and will require money for maintenance.
At the end of September, I still had offers around 0.85% fixed for 10 years on the open market, with subsidized loans a bit cheaper. Since then, things have worsened somewhat, so 1% is probably a bit optimistic at the moment. But for me, it was about establishing some sort of reference point. Twenty-eight years is quite a stretch, especially since repayment (principal amortization) doesn’t start immediately but only after the loans are fully disbursed, so in about two years. That means we’ll easily be at 62 years old when the house is fully paid off. If interest rates rise before closing, it will take longer; if early repayments work out, it will be sooner.
S
saralina8718 Dec 2021 11:29Joedreck schrieb:
If it doesn’t work out, it can simply be sold. After all, it’s a new build. And relatively affordable. You’ll find a buyer, and if worst comes to worst, you can look for something else.
There will surely be a couple out there looking for a cozy home at a fair price. Sure, that’s an option too.
You just need to be at least aware of that beforehand.