ᐅ Build a new house or wait for an affordable home to become available?
Created on: 4 Oct 2018 23:02
A
armmitcharme
Hello everyone,
Thank you very much for taking the time.
We are completely torn and looking for opinions on our situation.
My husband and I (both 27, plus our daughter who is 11 months old) are considering building a house, even though we never really wanted to, since we are quite adaptable but definitely not decisive.
To begin with: We are both still students. I will become a doctor next May. He will study for a long time yet, but already has completed vocational training and is an excellent homemaker.
Our current savings amount to €80,000 (about $86,000). We would definitely be able to get a loan since my (very financially stable) mother would act as guarantor for us.
We have been searching for almost a year for a suitable house in the beautiful village with a population of about 200 where my mother lives. Several months ago, we were offered a house there (a verbal agreement giving us a right of first refusal, but most people hardly sell their houses here anyway, so the seller can also consider themselves lucky), once the 90-year-old mother of the potential seller can no longer live alone. She is still relatively fit, walking around outside, etc.
We want to move there, specifically so that our little girl can walk to her grandmother’s without crossing a busy road, which applies both to the new development area (about 3 building plots) and to the reasonably priced house offered to us, as they are practically opposite each other.
Details of the old house:
5 rooms, approximately 120 sqm (about 1,290 sq ft) living space
Plot size 700 sqm (about 7,535 sq ft)
3 bathrooms, but one in the shed
Last plot at the edge of the forest (undevelopable, because the forest belongs to my mother)
Huge basement with a shed
Two garages
Built in the 1970s
Inspected by an expert (though somewhat superficial), very well maintained at first impression
Renovations needed, but no major refurbishment required. We estimate immediate necessary investments of around €20,000 (about $21,500)
Lovely garden with mature trees
Cost: €68,000 (about $73,000)
Details of the new development:
Mostly flat northern slope
€9 per sqm (no typo — it’s rural and the municipality supports young families. Nine euros per sqm)
Opposite the forest (undevelopable because it belongs to my mother)
Reasons to wait:
Very low costs, no loan needed
Manageable work (we are both not professionals)
Move in without huge upfront costs
We could gradually add more “luxury,” but start simply
Charm of the old house
The house is worth more than we would pay for it
Reasons against waiting:
We might end up waiting forever
One room is a walk-through
No matter what we do, it won’t be as environmentally friendly as a good new build
The house is not perfect
Reasons to build new:
It feels terrible to “take” the house away from the elderly woman
We could start planning immediately
I will have plenty of time for this over the next six months, but not after that
We could customize a lot according to our wishes
The plots are beautiful and practically a gift
We could build a passive house
Reasons against building new:
Costs are approximately €300,000 (about $323,000) if we are lucky — meaning debt
In this region, property usually never recovers its construction price
An overwhelming number of decisions
Neither of us are experts and could easily be taken advantage of
Any “luxury” must be financed upfront
“If you’re going to build, build properly?” — costs, costs, costs
Building doesn’t happen quickly
What we want:
At least 100 sqm (about 1,075 sq ft), maximum 135 sqm (about 1,450 sq ft)
At least 5 rooms (a second child is planned)
Preferably a low-energy house
2 bathrooms (one can be very small, just some backup option)
Not too much hassle
What I mean by luxury:
A tiled stove (very cozy, and since the forest is family-owned, we get wood extremely cheaply)
The infrastructure — daycare, primary school, proximity to future work, etc. — is ideal for us despite, or because of, the very rural location. But property prices in our very rural area are very low, so we don’t view the potential house as an investment but as a place to settle down. The chance of one of the approximately 10 other suitable houses in the village becoming available by chance seems very low to us.
What would you do?
What would you advise a friend?
We are completely uncertain!
Thank you very much for your help, and have a nice evening!
Anne
Thank you very much for taking the time.
We are completely torn and looking for opinions on our situation.
My husband and I (both 27, plus our daughter who is 11 months old) are considering building a house, even though we never really wanted to, since we are quite adaptable but definitely not decisive.
To begin with: We are both still students. I will become a doctor next May. He will study for a long time yet, but already has completed vocational training and is an excellent homemaker.
Our current savings amount to €80,000 (about $86,000). We would definitely be able to get a loan since my (very financially stable) mother would act as guarantor for us.
We have been searching for almost a year for a suitable house in the beautiful village with a population of about 200 where my mother lives. Several months ago, we were offered a house there (a verbal agreement giving us a right of first refusal, but most people hardly sell their houses here anyway, so the seller can also consider themselves lucky), once the 90-year-old mother of the potential seller can no longer live alone. She is still relatively fit, walking around outside, etc.
We want to move there, specifically so that our little girl can walk to her grandmother’s without crossing a busy road, which applies both to the new development area (about 3 building plots) and to the reasonably priced house offered to us, as they are practically opposite each other.
Details of the old house:
5 rooms, approximately 120 sqm (about 1,290 sq ft) living space
Plot size 700 sqm (about 7,535 sq ft)
3 bathrooms, but one in the shed
Last plot at the edge of the forest (undevelopable, because the forest belongs to my mother)
Huge basement with a shed
Two garages
Built in the 1970s
Inspected by an expert (though somewhat superficial), very well maintained at first impression
Renovations needed, but no major refurbishment required. We estimate immediate necessary investments of around €20,000 (about $21,500)
Lovely garden with mature trees
Cost: €68,000 (about $73,000)
Details of the new development:
Mostly flat northern slope
€9 per sqm (no typo — it’s rural and the municipality supports young families. Nine euros per sqm)
Opposite the forest (undevelopable because it belongs to my mother)
Reasons to wait:
Very low costs, no loan needed
Manageable work (we are both not professionals)
Move in without huge upfront costs
We could gradually add more “luxury,” but start simply
Charm of the old house
The house is worth more than we would pay for it
Reasons against waiting:
We might end up waiting forever
One room is a walk-through
No matter what we do, it won’t be as environmentally friendly as a good new build
The house is not perfect
Reasons to build new:
It feels terrible to “take” the house away from the elderly woman
We could start planning immediately
I will have plenty of time for this over the next six months, but not after that
We could customize a lot according to our wishes
The plots are beautiful and practically a gift
We could build a passive house
Reasons against building new:
Costs are approximately €300,000 (about $323,000) if we are lucky — meaning debt
In this region, property usually never recovers its construction price
An overwhelming number of decisions
Neither of us are experts and could easily be taken advantage of
Any “luxury” must be financed upfront
“If you’re going to build, build properly?” — costs, costs, costs
Building doesn’t happen quickly
What we want:
At least 100 sqm (about 1,075 sq ft), maximum 135 sqm (about 1,450 sq ft)
At least 5 rooms (a second child is planned)
Preferably a low-energy house
2 bathrooms (one can be very small, just some backup option)
Not too much hassle
What I mean by luxury:
A tiled stove (very cozy, and since the forest is family-owned, we get wood extremely cheaply)
The infrastructure — daycare, primary school, proximity to future work, etc. — is ideal for us despite, or because of, the very rural location. But property prices in our very rural area are very low, so we don’t view the potential house as an investment but as a place to settle down. The chance of one of the approximately 10 other suitable houses in the village becoming available by chance seems very low to us.
What would you do?
What would you advise a friend?
We are completely uncertain!
Thank you very much for your help, and have a nice evening!
Anne
Sturkopf865 Oct 2018 00:08Hello Anne, we are building mainly because of the surroundings in our area! We don’t want to move away either. Here, plots cost between 190-300 €/sqm (about $200-$320 per sq ft), but since we can reach everyone within 10 minutes and love our environment with forests and such, we will build soon. If I were you, I would buy immediately for 9 euros (about $10); that’s like hitting the jackpot, very cheap and exactly where you want to stay!
For us, it’s the opposite—we have to pay a lot just to be allowed to stay...
Go for it. If possible, I would buy the plot next door as well!
Simply wonderful, almost like a fairy tale!!!!
Good luck with your decision.....
For us, it’s the opposite—we have to pay a lot just to be allowed to stay...
Go for it. If possible, I would buy the plot next door as well!
Simply wonderful, almost like a fairy tale!!!!
Good luck with your decision.....
No, you’re already correct there. Construction costs do vary regionally, but not so much locally. However, $300k is quite high for the house size. People often estimate around $2,000 per square meter (approximately $185 per square foot), but that doesn’t include landscaping or other external work. Also, the cost per square meter tends to be higher for smaller houses compared to larger ones, so the estimate makes sense, especially as an initial assessment.
Building!
My grandmother is 97 and still moves around her house quite well. Who knows how much longer the other grandmother will continue living in her home? Since there is already a child, I think it would be wrong to wait forever for your luck to change.
Considering the income prospects, support from mom, and land prices that are almost a giveaway, it hardly gets better than this. In my opinion, the advantages of a new build outweigh the rest.
My grandmother is 97 and still moves around her house quite well. Who knows how much longer the other grandmother will continue living in her home? Since there is already a child, I think it would be wrong to wait forever for your luck to change.
Considering the income prospects, support from mom, and land prices that are almost a giveaway, it hardly gets better than this. In my opinion, the advantages of a new build outweigh the rest.
N
nordanney5 Oct 2018 08:41Definitely buy. I don’t want to spend €300,000 and once the house is built, it’s only worth €150,000. I’d rather invest a smaller amount in a used house and spend the savings on a better quality of life.
If, for any reason, a move becomes necessary, selling won’t be painful either.
If, for any reason, a move becomes necessary, selling won’t be painful either.
New construction... I would also consider buying the surrounding plots of land...
Since grandma lives nearby, you always have a reliable point of contact on site. Especially in rural areas, local authorities try hard to keep general practitioners in the region... The main thing is that they settle here. If you ever really have to move, you can always rent out the house.
Especially in an area with these land prices, you probably won’t pay 300,000 euros for the new build...
Since grandma lives nearby, you always have a reliable point of contact on site. Especially in rural areas, local authorities try hard to keep general practitioners in the region... The main thing is that they settle here. If you ever really have to move, you can always rent out the house.
Especially in an area with these land prices, you probably won’t pay 300,000 euros for the new build...
I don’t understand why building new is being recommended here. If the original poster already says that a loss in value is inevitable due to poor resale potential, how can building new still be suggested? It’s not just about the construction costs, for example 300,000 euros, but the total costs including interest payments. If those total 400,000 euros and the house has to be sold for 200,000 euros in 30 years as a retirement home, then that simply means a loss of 200,000 euros.