Hello,
We are a soon-to-be family of four (29, 27, 2, and expected in August 2015) and since a new residential development is currently planned in our village, we are wondering whether to take the step now or save for a few more years...
At the moment, we pay 550€ cold rent and save 700€ monthly in a savings account.
My husband is the sole earner as I am currently on parental leave and our second child is on the way. His salary is expected to increase well over the next few years since he has only four years of professional experience after university.
So far, we have been able to save 35,000€.
The building plot would cost around 80,000€ (including additional fees).
We plan to build about 150m2 (1,615 sq ft) with a basement and a double garage. What kind of costs should we expect?
Because of a two-year building obligation, we can’t first pay off the plot calmly; we would need to arrange the full financing now and start construction next year.
What do you think about this?
We are a soon-to-be family of four (29, 27, 2, and expected in August 2015) and since a new residential development is currently planned in our village, we are wondering whether to take the step now or save for a few more years...
At the moment, we pay 550€ cold rent and save 700€ monthly in a savings account.
My husband is the sole earner as I am currently on parental leave and our second child is on the way. His salary is expected to increase well over the next few years since he has only four years of professional experience after university.
So far, we have been able to save 35,000€.
The building plot would cost around 80,000€ (including additional fees).
We plan to build about 150m2 (1,615 sq ft) with a basement and a double garage. What kind of costs should we expect?
Because of a two-year building obligation, we can’t first pay off the plot calmly; we would need to arrange the full financing now and start construction next year.
What do you think about this?
Bauexperte schrieb:
So, what exactly would that be... besides drywall?
Exactly that, plus painting, plastering, flooring, sanitary fixtures, interior doors, and possibly tiling as well. In new construction, all of this is easier than in renovation, but of course you shouldn’t be completely unskilled.
Outside, there’s paving, rainwater drainage, and generally the garden. Here a little money, there a little money...
Bauexperte schrieb:
You’re not serious… are you?
Yes, but mainly just for the sake of completeness. These tasks exist nowadays in both new builds and renovations, not only in very cheap constructions. Few houses are built without them, so there must be some interest. However, most people greatly overestimate their own abilities...
H
Haus_Traum24 Mar 2015 07:40Yes, we definitely want to contribute as much DIY work as possible; fortunately, my husband is very skilled with handy work. We just can’t build forever since we still have to pay rent on the side...
B
Bauexperte24 Mar 2015 10:13Hello,
This dream would cost you roughly €380,000 to €400,000 all included, depending on the location in Bavaria and ground conditions. A lot of luxury—except for a KfW 70 energy-efficient house—is not yet included in this amount; however, it does come finished with labor included for flooring, painting, and external landscaping.
Others can answer financing options much better than I can; I’m not keen on offering too many alternatives. But from a gut feeling, I would say you should save some more; that is healthier for you.
Sweat equity is certainly possible, but you will absolutely not have the time to contribute larger amounts of it. And—something people often forget—you still have to buy the materials!
What you quickly forget is the whole self-build approach. Anyone taking that on needs more than just “handyman skills.” Time is the key word here: for a beginner, a self-build usually means at least one year of construction, and even that is quite fast. How do you plan to manage that with your double financial burden? Also, many marriages come out of this experience strained...
Save a bit more; owning a house is not the most important thing in the world!
Edit:
I had little time earlier for a detailed reply, so I’m adding this now.
If you forgo the basement and the double garage, you would still face costs around €320,000 to €340,000 that need to be managed. I always feel quite concerned when I see how the desire to build a house can overshadow all the common sense that Mother Nature has given us.
I believe you will find a lender willing to support you on this path—some are still quite unscrupulous; perhaps property management companies (ÖMIs) could be part of the solution. Maybe also the trust in the seller is misplaced, because after the loan is drawn down, you will still need significant funds but may have an empty wallet. On the other hand: if you are just able to manage living alongside the house financing, what happens if unexpected expenses arise? Let’s think small: the washing machine breaks down, one of the children needs money for a longer school trip (these days they no longer go to the coast or countryside; ski resorts are trendy now), etc.
Please don’t misunderstand me; I have no personal interest in whether you build or not. But I want you to understand the high risk you are taking; in the end, you might be left with a ruin. The low interest rates should never lead you to reckless decisions or open doors wide for clever bankers or sellers. If your house-building adventure falls through, you’ll be on your own and will have to figure out what to do next. In your current situation, this risk would clearly be too high for me.
Best regards,
Bauexperte
Haus_Traum schrieb:
My husband is the sole earner since I am currently on parental leave and our second child is on the way soon. His salary is expected to increase well over the next few years as he only has 4 years of work experience after university.
So far, we have managed to save only €35,000.
The plot of land would cost about €80,000 (including additional fees).
We plan to build around 150m² (1,615 sq ft) with a basement and a double garage. What costs should we roughly expect?
This dream would cost you roughly €380,000 to €400,000 all included, depending on the location in Bavaria and ground conditions. A lot of luxury—except for a KfW 70 energy-efficient house—is not yet included in this amount; however, it does come finished with labor included for flooring, painting, and external landscaping.
Others can answer financing options much better than I can; I’m not keen on offering too many alternatives. But from a gut feeling, I would say you should save some more; that is healthier for you.
Haus_Traum schrieb:
Yes, we do want to contribute as much sweat equity as possible, luckily my husband is very skilled with craftsmanship. We just can’t build forever since we still have to pay rent on the side...
Sweat equity is certainly possible, but you will absolutely not have the time to contribute larger amounts of it. And—something people often forget—you still have to buy the materials!
What you quickly forget is the whole self-build approach. Anyone taking that on needs more than just “handyman skills.” Time is the key word here: for a beginner, a self-build usually means at least one year of construction, and even that is quite fast. How do you plan to manage that with your double financial burden? Also, many marriages come out of this experience strained...
Save a bit more; owning a house is not the most important thing in the world!
Edit:
I had little time earlier for a detailed reply, so I’m adding this now.
If you forgo the basement and the double garage, you would still face costs around €320,000 to €340,000 that need to be managed. I always feel quite concerned when I see how the desire to build a house can overshadow all the common sense that Mother Nature has given us.
I believe you will find a lender willing to support you on this path—some are still quite unscrupulous; perhaps property management companies (ÖMIs) could be part of the solution. Maybe also the trust in the seller is misplaced, because after the loan is drawn down, you will still need significant funds but may have an empty wallet. On the other hand: if you are just able to manage living alongside the house financing, what happens if unexpected expenses arise? Let’s think small: the washing machine breaks down, one of the children needs money for a longer school trip (these days they no longer go to the coast or countryside; ski resorts are trendy now), etc.
Please don’t misunderstand me; I have no personal interest in whether you build or not. But I want you to understand the high risk you are taking; in the end, you might be left with a ruin. The low interest rates should never lead you to reckless decisions or open doors wide for clever bankers or sellers. If your house-building adventure falls through, you’ll be on your own and will have to figure out what to do next. In your current situation, this risk would clearly be too high for me.
Best regards,
Bauexperte
You/You all already have a pretty good understanding of the financial responsibility involved.
I'll pick up on a few points you mentioned that haven’t been addressed yet:
Additional costs increase due to new insurance policies – let’s say about 400 € per month (plus waste disposal and property tax), on top of the loan and the savings (this was recently discussed, also in a “I want a house” thread).
Of course, the loan can usually be adjusted over the years if your income changes, but you have to bear in mind: more financial buffer is used before and during construction than expected (usually the buffer is gone even before getting into the details that the buffer is supposed to cover).
Also, most banks don’t finance furniture, so neither kitchen nor cabinets; commitment fees and double expenses come into play, often at a time when no one wants to calculate anymore because it’s too overwhelming.
Then there are expenses for the lawnmower, new lamps for exterior walls, mailbox, privacy screens, etc.—usually paid from ongoing income or reserved equity, and these can easily add up to several thousands.
If the income doesn’t stretch far enough, the house doesn’t remain the dream you imagined. Maybe parents will help out, but those are extras you shouldn’t count on at this point.
Now about your wishes:
Hehe, basement, double garage, and the house’s living space...
I’ve noticed there is a north-south divide in Germany regarding attitudes toward basements. Strangely, where construction costs are comparatively low, builders are more willing to forgo the basement and instead focus on building bright spaces.
Your wishes are already not small and don’t align with your budget!
In addition to the house calculation come the small “you build only once” extras, then garden, driveway, and additional building-related costs.
With three children, you definitely need living space.
If you want so much, you shouldn’t limit yourself to a small local area or draw strict boundaries.
I am not familiar with the idea of restricting yourself mentally to one village (whether for work or housing). Even if the infrastructure is good, a nearby town with similar amenities may be considerably cheaper. You should also look about 20 km (12 miles) further out.
In the end, what counts for you is what’s available—and that you cannot change.
But you can change your way of thinking.
Go to the bank and get a non-binding offer for how much money you can borrow.
And then take into account again what I wrote above and all the advice from those who posted before me.
Best regards,
Yvonne
I'll pick up on a few points you mentioned that haven’t been addressed yet:
Additional costs increase due to new insurance policies – let’s say about 400 € per month (plus waste disposal and property tax), on top of the loan and the savings (this was recently discussed, also in a “I want a house” thread).
Of course, the loan can usually be adjusted over the years if your income changes, but you have to bear in mind: more financial buffer is used before and during construction than expected (usually the buffer is gone even before getting into the details that the buffer is supposed to cover).
Also, most banks don’t finance furniture, so neither kitchen nor cabinets; commitment fees and double expenses come into play, often at a time when no one wants to calculate anymore because it’s too overwhelming.
Then there are expenses for the lawnmower, new lamps for exterior walls, mailbox, privacy screens, etc.—usually paid from ongoing income or reserved equity, and these can easily add up to several thousands.
If the income doesn’t stretch far enough, the house doesn’t remain the dream you imagined. Maybe parents will help out, but those are extras you shouldn’t count on at this point.
Now about your wishes:
Haus_Traum schrieb:
As I said, we don’t need any big extras during the build
Haus_Traum schrieb:
I also don’t think we can manage 350,000 €; the house will have to be cheaper, but where to save?
Hehe, basement, double garage, and the house’s living space...
I’ve noticed there is a north-south divide in Germany regarding attitudes toward basements. Strangely, where construction costs are comparatively low, builders are more willing to forgo the basement and instead focus on building bright spaces.
Your wishes are already not small and don’t align with your budget!
In addition to the house calculation come the small “you build only once” extras, then garden, driveway, and additional building-related costs.
Haus_Traum schrieb:
And I will work again or take a part-time job once the children are in kindergarten, but a third child is likely planned (that’s also why 150 m2 (1,615 sq ft)) and that could still take some time.
With three children, you definitely need living space.
Haus_Traum schrieb:
However, there is almost nothing for sale in the village/area where we want to stay
If you want so much, you shouldn’t limit yourself to a small local area or draw strict boundaries.
I am not familiar with the idea of restricting yourself mentally to one village (whether for work or housing). Even if the infrastructure is good, a nearby town with similar amenities may be considerably cheaper. You should also look about 20 km (12 miles) further out.
In the end, what counts for you is what’s available—and that you cannot change.
But you can change your way of thinking.
Go to the bank and get a non-binding offer for how much money you can borrow.
And then take into account again what I wrote above and all the advice from those who posted before me.
Best regards,
Yvonne
D
Doc.Schnaggls24 Mar 2015 11:30Yvonne has expressed it very well.
Right before or shortly after moving in, unexpected costs often arise.
We have now been living in the house for four weeks, and without discipline, it’s easy to spend money faster than it comes in.
It’s those “extras” like outdoor lights, a mailbox, a pump for the rainwater tank, garden hose and sprinklers for the new lawn, a cabinet here and there — all of which can quickly put a dent in your budget, and suddenly there’s still a lot of month left at the end of the money...
I therefore recommend having a non-binding discussion with your bank — after that, you can see much more clearly what is feasible and what is not.
One small tip, when things get serious: also ask the major life insurance companies about financing — they have recently been offering quite good deals and long fixed interest rates (over 20 years).
Best regards,
Dirk
Right before or shortly after moving in, unexpected costs often arise.
We have now been living in the house for four weeks, and without discipline, it’s easy to spend money faster than it comes in.
It’s those “extras” like outdoor lights, a mailbox, a pump for the rainwater tank, garden hose and sprinklers for the new lawn, a cabinet here and there — all of which can quickly put a dent in your budget, and suddenly there’s still a lot of month left at the end of the money...
I therefore recommend having a non-binding discussion with your bank — after that, you can see much more clearly what is feasible and what is not.
One small tip, when things get serious: also ask the major life insurance companies about financing — they have recently been offering quite good deals and long fixed interest rates (over 20 years).
Best regards,
Dirk
H
Haus_Traum24 Mar 2015 12:56Thank you for your responses!
I’m curious to see what we will decide... and what the bank says.
I’m curious to see what we will decide... and what the bank says.
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