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
M
Matthew035 Oct 2018 11:00With these land prices: build!
With this modest size (100-130 sqm (1076-1400 sq ft)): build!
With this sense of luxury (tiled stove): build!
With this equity and expected income as a doctor: build!
You can design the house, buy the adjacent plot for the view at the same time, have no guilty conscience about waiting for an inheritance, and much more...
I agree with Katja: why is it considered throwing money away if in 30 years you get a resale value of 200k instead of 400k? Why is that the main focus?
Counterargument: the daughter will take over the place in 30 years. So what?
The grandmother next door is worth her weight in gold, besides, the original poster will earn the hypothetical 200k loss in just two years. And you can read between the lines how she raves about the corner—that’s quality of life, being happy...
I don’t see the “fear” of getting ripped off; many are amateurs. Building in the countryside also means you know the builder, who certainly won’t want to ruin things with his future doctor client or her family... if that’s not enough: hire a construction supervisor, problem solved.
With this modest size (100-130 sqm (1076-1400 sq ft)): build!
With this sense of luxury (tiled stove): build!
With this equity and expected income as a doctor: build!
You can design the house, buy the adjacent plot for the view at the same time, have no guilty conscience about waiting for an inheritance, and much more...
I agree with Katja: why is it considered throwing money away if in 30 years you get a resale value of 200k instead of 400k? Why is that the main focus?
Counterargument: the daughter will take over the place in 30 years. So what?
The grandmother next door is worth her weight in gold, besides, the original poster will earn the hypothetical 200k loss in just two years. And you can read between the lines how she raves about the corner—that’s quality of life, being happy...
I don’t see the “fear” of getting ripped off; many are amateurs. Building in the countryside also means you know the builder, who certainly won’t want to ruin things with his future doctor client or her family... if that’s not enough: hire a construction supervisor, problem solved.
Matthew03 schrieb:
With these land prices: build!
With this modest size (100-130 m² (1076-1400 sq ft)): build!
With this feeling of luxury (tiled stove): build!
With this equity + expected salary as a doctor: build!
You can design the house, buy the adjacent plot for the view at the same time, without feeling guilty about having to wait for a death, and much more...
I also agree with Katja: why is it considered throwing money away if in 30 years you get a resale value of 200k instead of 400k? Why is this the main focus?
Counterpoint: the daughter takes over the place in 30 years. So what?
Having grandma next door is worth gold, plus the original poster earns the hypothetical 200k loss in two years. And you can hear between the lines how much she raves about the corner, that's quality of life, being happy...
I don’t see the “fear” of being ripped off, many are amateurs. Building in the countryside also means you know the contractor, who certainly doesn’t want to ruin things with his future doctor client or their family... if that’s not enough: hire a building supervisor, done. Because in 30 years it won’t be 200k€ but 60k€. How much does the old lady’s property cost again? Best evidence for the hypothesis, right? It may be okay for feeling comfortable now. But one must be aware that this is not an investment but burning money. There won’t even be enough left for the children to cover both parents if they need to move into a nursing home with care.
From my point of view, it’s just ego talk. But who knows, maybe the region will develop so that at least 150k€ becomes realistic *irony off*.
As I said, I can send anyone the YouTube link to the documentary if interested.
M
Matthew035 Oct 2018 11:18That does not change anything for me or the perspective I have presented. Even if it were 0 euros.
A doctor should be able to build wealth that is significantly above average... if then 1000 euros per month (about 1100 USD) for care are missing, other things are out of order.
A doctor should be able to build wealth that is significantly above average... if then 1000 euros per month (about 1100 USD) for care are missing, other things are out of order.
Zaba12 schrieb:
Because in 30 years it's not 200,000 euros but 60,000 euros. ...Or even less. So what? You live happily and contentedly there for 50 years after all. I would agree with you immediately if she were a hairdresser (no offense intended).Given the conditions, I would go ahead and build. Even if the house might be worth less at some point in the future, you are buying quality of life and you can afford it. And if the old lady isn’t very active in 20 years, you can still buy the little house for your child. And who can say how things will develop… it’s also possible that in 20 years city life will be unbearable and many people will want to move to the countryside.
Another thing: Do you already have a practice that you can take over or work in? Or would it make sense to try to integrate the premises?
Another thing: Do you already have a practice that you can take over or work in? Or would it make sense to try to integrate the premises?
If there is no obligation to build, I would consider buying the neighboring property as well (maybe a child would want to build there later), or you could have a nice, large garden. It’s difficult to advise on an old house without ever having seen it; for example, what does the floor plan look like? A new build might also be relatively affordable—there are often reports about reasonably priced providers (e.g., Town & Country). It might be better than an old house where nothing fits and which might require expensive renovations. I also think the bathrooms will need to be redone anyway.
Best regards,
Sabine
Best regards,
Sabine