Hello,
Actually, we have been looking for an existing property since last summer. According to our mortgage broker, we have a budget of around 300,000 (all-in), which a bank is likely to approve.
The market here in Schleswig-Holstein has also become very tight, and the houses on offer are often in need of renovation, so you easily exceed the budget (especially since many city dwellers laugh at our house prices and like to secure a holiday home here).
Now the question is whether it would be possible to build a house within our budget (assuming we can get a building plot). Our requirements are not very high; it doesn’t need to be a huge house. 120 square meters (1300 square feet) would be completely sufficient.
In a neighboring village, plots are currently being developed. The price isn’t fixed yet but is expected to be below 100 euros per square meter. The plots are about 700 square meters (7500 square feet) in size. Unfortunately, we have no experience with this topic at all, and I definitely don’t want to miscalculate.
We can only contribute limited personal labor. We are not unskilled, but both fully employed with a child, dog, and horse. What are your thoughts?
Actually, we have been looking for an existing property since last summer. According to our mortgage broker, we have a budget of around 300,000 (all-in), which a bank is likely to approve.
The market here in Schleswig-Holstein has also become very tight, and the houses on offer are often in need of renovation, so you easily exceed the budget (especially since many city dwellers laugh at our house prices and like to secure a holiday home here).
Now the question is whether it would be possible to build a house within our budget (assuming we can get a building plot). Our requirements are not very high; it doesn’t need to be a huge house. 120 square meters (1300 square feet) would be completely sufficient.
In a neighboring village, plots are currently being developed. The price isn’t fixed yet but is expected to be below 100 euros per square meter. The plots are about 700 square meters (7500 square feet) in size. Unfortunately, we have no experience with this topic at all, and I definitely don’t want to miscalculate.
We can only contribute limited personal labor. We are not unskilled, but both fully employed with a child, dog, and horse. What are your thoughts?
N
nordanney1 Jan 2021 21:06The additional costs are fundamentally different in nature. There are exceptions in individual cases—take drainage, for example. The fact that you don’t pay for street cleaning is probably because the road has no sidewalk. This is not the norm, but rather a rural exception.
M
motorradsilke1 Jan 2021 21:10nordanney schrieb:
The additional costs basically come down to the fundamental difference. In individual cases, it can be different – for example, drainage. And the fact that you don’t pay for street cleaning is probably because the street has no sidewalk. This is not the rule but rather a rural exception.You just can’t generalize this, that’s what I wanted to point out. It can be more expensive or cheaper. You always have to look at where which fees are charged.
In rural areas, this is not an exception for single-family homes.
I only moved in recently, so I can still make some good comparisons:
- Property tax (same neighborhood) is €100 per year cheaper for the 500m² (5380 sq ft) house compared to the rental apartment. The apartment had courtyards and green areas.
- Precipitation fee is slightly higher: +€20/year. I expected the difference compared to the rental apartment with 18 units on 6 floors to be higher.
- Waste disposal costs have increased slightly. Since we still generate diapers, we have the bin emptied every two weeks.
- Street cleaning has become cheaper. It’s no longer a through street.
Of course, there is no longer a caretaker,heating maintenance, elevator maintenance correction, external lighting, etc.
In summary:
95m² (1023 sq ft) apartment: €2700 per year
150m² (1615 sq ft) house: €1300 per year
I can’t say anything about heating costs yet, but now hot water comes from gas instead of electricity. And I enjoy long showers 🙂
With savings for a new heating system, etc., I still consider the house to be more expensive.
- Property tax (same neighborhood) is €100 per year cheaper for the 500m² (5380 sq ft) house compared to the rental apartment. The apartment had courtyards and green areas.
- Precipitation fee is slightly higher: +€20/year. I expected the difference compared to the rental apartment with 18 units on 6 floors to be higher.
- Waste disposal costs have increased slightly. Since we still generate diapers, we have the bin emptied every two weeks.
- Street cleaning has become cheaper. It’s no longer a through street.
Of course, there is no longer a caretaker,
In summary:
95m² (1023 sq ft) apartment: €2700 per year
150m² (1615 sq ft) house: €1300 per year
I can’t say anything about heating costs yet, but now hot water comes from gas instead of electricity. And I enjoy long showers 🙂
With savings for a new heating system, etc., I still consider the house to be more expensive.
hausnrplus251 Jan 2021 21:47motorradsilke schrieb:
Property taxes, insurance, and chimney sweeping fees are also paid by tenants, just indirectly. Repairs partially as well.
On the other hand, you can save quite a bit on utility costs with a home, such as lower waste collection fees, no garden maintenance, no stairwell cleaning, and so on.
Of course, it’s important to build up reserves for the house, but in my experience, the utility costs are lower. Still, the comparison between principal repayment and rent is misleading. The correct comparison is principal repayment plus utilities plus reserves versus rent when personally assessing whether the monthly cost is advantageous or still manageable.
M
motorradsilke1 Jan 2021 21:56hausnrplus25 schrieb:
Still, the comparison of PRINCIPAL REPAYMENT vs. rent is incorrect. Instead, the correct calculation for personal assessment of whether the monthly expense is advantageous or still manageable is principal repayment + additional costs + reserves vs. rent. Of course, no one has denied that. But when considering rent, you also have to include the all-in rent.
motorradsilke schrieb:
So you are basically building wealth for your children/grandchildren as well. SumsumBiene schrieb:
The price increase is really remarkable. Ten years ago, houses in the new development area were available for 100,000 €. Some people I know have monthly costs under 500 € for 150 m² (1,615 sq ft).... Well... somehow we are about ten years too late with everything 😕 SumsumBiene schrieb:
If you keep the monthly payments reasonable with the understanding or option to sell the house upon retirement and downsize, or pass it on to the children, or something similar... I think you might be making a mistake in your thinking: if you buy or build cheaply and finance it with the lowest repayment rate, you hardly gain or save anything. Property transfer tax and early repayment fees hurt. You usually don’t recover these when you sell. Also, additional building costs like utility connections aren’t visible during a viewing at sale. Altogether, these are by far more than just 10,000 € (about $11,000). If you then sell a house into which nothing has been invested for 20 years, you won’t get much in return either. Only a prime location and a structurally high-quality building will positively affect the resale value.
If houses were available for 150 m² (1,615 sq ft) at 100,000 € ten years ago “in your area,” then it probably wasn’t a “prime” location that would increase the property’s value enough to make it worthwhile.
If after financing, for example, you have only repaid 50,000 € of a 300,000 € loan (sorry, the numbers are not exact, just a rough guess), then you are making a losing deal. You will not be passing on a fully paid-off house, nor will you net a profit from selling it. The best you can hope for is to break even.
At the end of the day, whether for a buyer or an heir, it will only be a simple house in need of renovation, too small or impractical for others, with outdated layouts that don’t really fit modern needs.