After all the feedback that a standard house with 120 sqm (1300 sq ft) and two floors plus land will likely not be available for less than 300,000 euros, and that I should rather focus on buying a condominium, I have looked at a few condos in the past weeks, but none of them were even remotely suitable. I am single and imagine living in about 80 to 90 sqm (860 to 970 sq ft) with three rooms. Prices in the Augsburg surrounding area:
Prices for new condos in rural areas: 3000 euros per sqm (279 sq ft)
Prices for new condos in (small) towns: 3500 to 4500 euros per sqm (325 to 418 sq ft)
Prices for older condos in rural areas: 2500 euros per sqm (232 sq ft)
Prices for older condos in (small) towns: 3000 to 3500 euros per sqm (279 to 325 sq ft)
So, in the best case, I would pay 200,000 euros plus additional purchase costs for an older condo with 80 sqm (860 sq ft), but I would likely need to budget for new flooring, possibly some windows, and potential upcoming repairs to the building’s facilities (underground parking, stairwell). This means the total cost in the best case would be around 220,000 euros for a used apartment with 80 sqm (860 sq ft) and three rooms.
Many sellers of new condos now want 270,000 euros for apartments that will only be finished at the earliest in 1.5 years.
And I keep thinking, this can’t be right??? So I reviewed my budget again and cut some expenses (streaming services, clothing subscriptions, expensive phone contract...). I can afford 1000 euros per month and I have a permanent civil service job.
New plan: a “single house”
a) Buy a plot of land with 300 to 400 sqm (3200 to 4300 sq ft) for 80,000 to 100,000 euros
b) Buy a simple prefab house without luxury, about 90 sqm (970 sq ft) without a basement, turnkey (including additional building costs, painting, and tiling) for 180,000 euros.
My questions to the community here:
1. Do you think this plan is realistic?
2. How would you proceed?
Would you meet with the well-known prefab house manufacturers?
Or local construction companies first? Or an architect?
[Feel free to send recommendations or warnings via PM]
3. Is there an aspect I seem to have completely overlooked or forgotten?
Thank you very much in advance.
Prices for new condos in rural areas: 3000 euros per sqm (279 sq ft)
Prices for new condos in (small) towns: 3500 to 4500 euros per sqm (325 to 418 sq ft)
Prices for older condos in rural areas: 2500 euros per sqm (232 sq ft)
Prices for older condos in (small) towns: 3000 to 3500 euros per sqm (279 to 325 sq ft)
So, in the best case, I would pay 200,000 euros plus additional purchase costs for an older condo with 80 sqm (860 sq ft), but I would likely need to budget for new flooring, possibly some windows, and potential upcoming repairs to the building’s facilities (underground parking, stairwell). This means the total cost in the best case would be around 220,000 euros for a used apartment with 80 sqm (860 sq ft) and three rooms.
Many sellers of new condos now want 270,000 euros for apartments that will only be finished at the earliest in 1.5 years.
And I keep thinking, this can’t be right??? So I reviewed my budget again and cut some expenses (streaming services, clothing subscriptions, expensive phone contract...). I can afford 1000 euros per month and I have a permanent civil service job.
New plan: a “single house”
a) Buy a plot of land with 300 to 400 sqm (3200 to 4300 sq ft) for 80,000 to 100,000 euros
b) Buy a simple prefab house without luxury, about 90 sqm (970 sq ft) without a basement, turnkey (including additional building costs, painting, and tiling) for 180,000 euros.
My questions to the community here:
1. Do you think this plan is realistic?
2. How would you proceed?
Would you meet with the well-known prefab house manufacturers?
Or local construction companies first? Or an architect?
[Feel free to send recommendations or warnings via PM]
3. Is there an aspect I seem to have completely overlooked or forgotten?
Thank you very much in advance.
Steffen80 schrieb:
I don’t understand. What is this factor supposed to represent? In our case, it’s 125.6 (7,800 EUR base rent)
Regards, SteffenYou have to compare the same property in terms of rent and purchase price. Or are you currently renting a house worth 1 million euros and paying 7,800 euros base rent? If so, I would stop building my own house immediately and remain a tenant forever.
The ratio of base rent to purchase price is a rule of thumb for the yield or capital return, and thus an indicator of whether it makes more sense to buy or rent a property (if possible). If it’s over 30, it’s clear that buying is not worthwhile—at least from a return perspective.
S
Steffen8014 Feb 2017 08:21Alex85 schrieb:
You need to compare the same property in terms of rent and purchase price. Or are you currently renting a house worth 1 million euros and paying 7,800 euros in cold rent? If so, I would stop building on my own immediately and stay a tenant forever.
The ratio between cold rent and purchase price is a rule of thumb for return on investment or capital recovery and thus an indicator of whether it makes more sense to buy or rent a property. If this ratio is above 30, it is clear that buying does not make sense. At least from an investment return perspective.Oh, I see.. yes, okay. Understood...
P
Peanuts7414 Feb 2017 08:26Grym schrieb:
As a civil servant, you can be transferred by your employer at any time, and based on the general criteria (not married, no children), you will likely be among the first to be relocated.
Then you end up with a completely unsellable property (90 square meters (970 square feet) single-family house – about as marketable nowadays as Nokia phones) and a large loan.
You pay 7,200 EUR rent per year (excluding utilities)? And you want to buy/build for 270,000 EUR?
That results in an insane factor of 37.5.
A factor between 15 and 20 is economically justifiable; anything higher tends to be a break-even game but still acceptable.First, it would need to be clarified whether we are talking about a federal or state civil servant, considering that Bavaria alone is quite large. And the claim that a 90m² (970 sq ft) house is unsellable is complete nonsense. On the contrary, many of the large houses over 200m² (2,150 sq ft) that people buy when they are young are sold later in life because one or two people no longer need or want that much space to maintain. Many older couples then look for smaller homes where everything is on one level.
I think there are several more factors to consider:
How old is the original poster? Will they really remain single without children? How long can they finance the property? At 30, there are still about 30 years until retirement, but at 50, the timeline has to be shorter...
As already mentioned here: what is the risk of a job transfer?
What are my personal expectations regarding homeownership? A house or an apartment differ not only financially, but I also need to know whether the “side effects” of a house will be a benefit or a burden for me: a garden is nice, I can grow my own vegetables, grill outside on the terrace in summer, set up a paddling pool if I want to, enjoy a vacation at home in my own garden, etc. Or: the garden requires extra work, in case of snow I MUST clear the sidewalk in front of the house within a reasonable time, maintenance is entirely my responsibility, and so on.
So the question is: do I want to live with good care from a property manager and only have to look after my condominium, or am I willing to take on the much greater maintenance effort of owning a house with a garden?
Does it annoy me to have to actively participate in homeowners’ association meetings to protect my property, or do I prefer to bear responsibility alone (then a house)? Or am I willing to coordinate regularly within a community of owners?
This is a matter of personality. Those who like to be completely independent and are ready to invest a considerable part of their free time in maintaining a house and garden will enjoy homeownership, even alone. For those who see it as an additional obligation, I would generally recommend a nice condominium, even if finances are good.
And of course, it would be interesting to hear what the conversation with the financial advisor revealed.
How old is the original poster? Will they really remain single without children? How long can they finance the property? At 30, there are still about 30 years until retirement, but at 50, the timeline has to be shorter...
As already mentioned here: what is the risk of a job transfer?
What are my personal expectations regarding homeownership? A house or an apartment differ not only financially, but I also need to know whether the “side effects” of a house will be a benefit or a burden for me: a garden is nice, I can grow my own vegetables, grill outside on the terrace in summer, set up a paddling pool if I want to, enjoy a vacation at home in my own garden, etc. Or: the garden requires extra work, in case of snow I MUST clear the sidewalk in front of the house within a reasonable time, maintenance is entirely my responsibility, and so on.
So the question is: do I want to live with good care from a property manager and only have to look after my condominium, or am I willing to take on the much greater maintenance effort of owning a house with a garden?
Does it annoy me to have to actively participate in homeowners’ association meetings to protect my property, or do I prefer to bear responsibility alone (then a house)? Or am I willing to coordinate regularly within a community of owners?
This is a matter of personality. Those who like to be completely independent and are ready to invest a considerable part of their free time in maintaining a house and garden will enjoy homeownership, even alone. For those who see it as an additional obligation, I would generally recommend a nice condominium, even if finances are good.
And of course, it would be interesting to hear what the conversation with the financial advisor revealed.
Peanuts74 schrieb:
The idea that a 90m² (970 sq ft) house is unsellable is complete nonsense. On the contrary, many of the large 200+ m² (2,150+ sq ft) homes that people build when they are young are sold later in life because couples or individuals no longer need or want to maintain so much space. Many older couples then look for smaller homes where everything is on one level. I agree with that. In some residential areas here, almost a third of the houses are 90–100m² (970–1,075 sq ft) bungalows occupied by older residents. If you build like that, I wouldn’t be too worried about not being able to sell it.
Alright, here the trend is completely different. Families with children are moving further out to larger houses, and when the children have left home, many move back to the city or city center for access to public transport, local amenities, cultural offerings, the “urban lifestyle,” restaurants within walking distance, doctors within walking distance, and so on.
If the trend in Augsburg is different and likely to remain so, please disregard. However, you do read in publications like Spiegel, Focus, etc., almost weekly about the rapidly increasing urbanization and rural depopulation. This trend is primarily driven by singles and couples, while families continue to follow a trend toward suburbanization.
If the trend in Augsburg is different and likely to remain so, please disregard. However, you do read in publications like Spiegel, Focus, etc., almost weekly about the rapidly increasing urbanization and rural depopulation. This trend is primarily driven by singles and couples, while families continue to follow a trend toward suburbanization.
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