ᐅ Homebuilding Forum – Would You Choose to Buy or Build a House Again?
Created on: 11 Dec 2015 11:09
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xycrazy
Hello,
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
So far, I have bought, renovated, and moved into my second house. And I would do it again.
Thanks to doing much of the work myself, it was relatively affordable. The land alone makes up at least one-third of the total price. There were already garages, and the garden was landscaped, etc.
And I would do it again. A house is almost never cheap. But with the relatively low total price, we set a very comfortable mortgage payment that would be at least as much as rent. This means we live with somewhat higher additional costs and a maintenance reserve, which every homeowner should always plan for.
And it’s simply comfortable. It’s both luxury and a hobby.
You have to like it.
Renting is relatively carefree. Except for the feeling of giving money to a stranger, you have your monthly costs, and the rest is free. No faucet needs to be replaced; the landlord takes care of everything.
But it never really belongs to you. That wasn’t for me. Having my own garden, being able to drill a hole in my own wall, and doing what I want are fundamentals for me to feel comfortable. And it’s also a good place to live as you get older. No mortgage payments, no forced renovations that drive up the rent, and so on.
Thanks to doing much of the work myself, it was relatively affordable. The land alone makes up at least one-third of the total price. There were already garages, and the garden was landscaped, etc.
And I would do it again. A house is almost never cheap. But with the relatively low total price, we set a very comfortable mortgage payment that would be at least as much as rent. This means we live with somewhat higher additional costs and a maintenance reserve, which every homeowner should always plan for.
And it’s simply comfortable. It’s both luxury and a hobby.
You have to like it.
Renting is relatively carefree. Except for the feeling of giving money to a stranger, you have your monthly costs, and the rest is free. No faucet needs to be replaced; the landlord takes care of everything.
But it never really belongs to you. That wasn’t for me. Having my own garden, being able to drill a hole in my own wall, and doing what I want are fundamentals for me to feel comfortable. And it’s also a good place to live as you get older. No mortgage payments, no forced renovations that drive up the rent, and so on.
Bieber0815 schrieb:
You don’t mention the amount of equity you contributed; therefore, this comparison can’t really be assessed. From my experience as a tenant in several apartments and a single-family home, and now as an owner of a single-family home, I have always come out cheaper renting—even when comparing monthly costs. At some point, far in the future, this may change, and if circumstances allow, I might be able to “live off” my house.Of course, we also contributed a significant amount of equity, but we now have a corresponding asset in return. The money is just not as liquid as it was before.
Because of a lot of self-performed work, I even believe we could sell the house for well above the purchase price. Similar-sized houses with land in this area sell for 50,000 euros (about 55,000 USD) more than what we paid for everything. And those houses are 20 to 30 years old.
The topic seems to be getting lost somewhere; it’s not about the pros and cons of building a house versus renting, but whether one wants to go through the dirt, stress, and overall burden again.
You could just as well argue that only the property owner profits from rents in urban areas, as they have the best investment compared to tenants and homebuilders.
You could just as well argue that only the property owner profits from rents in urban areas, as they have the best investment compared to tenants and homebuilders.
C
chand198617 Oct 2017 15:59Nordlys schrieb:
Is there a more effective way to save than by owning a home? No. Because all financial jugglers overlook one thing. Property stands on land. Land is like gold—finite and irreplaceable. And land holds value regardless of the currency.The value of land is not determined by its scarcity, but by its location. In metropolitan areas, land is scarce due to increasing demand. But overall, only about 4% of Germany is built upon. Land is not always in demand everywhere; it is sought after only in certain locations. So, land is not scarce overall.
Also, just because something holds value doesn’t necessarily make it a good investment if you can invest elsewhere with better appreciation potential. Certainly, it’s not the worst option.
Nordlys schrieb:
I would even go so far as to say that if you have free capital, it’s smarter to buy and lease out 10 hectares (25 acres) of farmland, even with a 1.8% return, than to invest in stocks.If you want to buy where land will really see significant and secure appreciation, you have to already be a millionaire. With pure farmland, you are betting on rezoning to residential land. If that doesn’t happen, you will just be holding capital earning 1.8%. Stocks yield about 8%, and real estate—leveraged with debt—can return anywhere from 20% to the lower single digits. And with real estate, you already have land that is zoned for building!
So, I don’t find that idea very clever.
If I wanted something that truly holds value, I would buy mechanical watches from reputable manufacturers. They consistently retain their value against any inflation and don’t even depend on precious metal prices. No yield, but maximum value preservation.
Nordlys schrieb:
I think people should also think beyond themselves. I always tell my kids that their mom and dad will leave them something. We’re happy to do that. Not that we give up everything, but it’s nice to leave something behind. To grow it. For your children, and so on. We’re a tribe, a clan, more than just individuals. We will continue to live on through you.I find that extremely sympathetic. Great.
chand1986 schrieb:
If you want to buy where land will really have significant and safe value increases, you need to be a millionaire beforehand. With pure farmland, you are speculating on rezoning to building land. If that doesn’t happen, you’re stuck with capital invested at 1.8%. With stocks, you make 8%, with real estate (because it is leveraged with borrowed capital) you make anywhere from 20% up to the high 80%s. And with real estate, you already have land that is zoned for building!
So I don’t find that very smart.You clearly don’t understand much about farmland.... The price per hectare has increased by about one-third over the last 10 years in areas with more than 50 soil points. Land also has value for potential development, not just existing construction. Really, it’s true. K.
S
stefanc8417 Oct 2017 19:09I don’t know much about farmland or its value development in recent years. But I think the idea that land is not scarce is, sorry, complete nonsense. Just wait a few more years, and there won’t be enough land on Earth to provide more and more people with increasing amounts of meat. Especially fertile land in Germany is extremely rare—at least rare compared to the needs of modern civilization. Then consider migration forecasts for the coming decades: people moving away from expanding deserts and into fertile areas like Germany. (Off-topic: This is going to be a huge “fun” with all the nice people here who say things like “mine mine mine, starve in your Africa!”)
You also can’t just keep converting more and more land into building land—at least, as a friend of untouched nature, I would be against doing that.
You also can’t just keep converting more and more land into building land—at least, as a friend of untouched nature, I would be against doing that.
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