ᐅ Homebuilding Forum – Would You Choose to Buy or Build a House Again?
Created on: 11 Dec 2015 11:09
X
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
Winniefred schrieb:
We bought a small older house and mostly renovated it ourselves. It was challenging but also rewarding. We have only been living in the house for a short time, but we really like it and would do it again. It only costs us 200€ (about $220) more than our previous rent. The children have enough space, we have a great garden, and we no longer depend on anyone or have to accommodate others much. We own a house in a prime location, which will likely have doubled in value in 10 years. We also have great neighbors. Still, compromises have to be made. Nothing is without drawbacks. More work, more costs, and so on.In my opinion, this is the best approach for people who couldn’t pay off their dream home in a “short” time.
Everything done right!
C
chand198618 Oct 2017 15:07Nordlys schrieb:
The church example shouldn’t say more than that.Then I must have overanalyzed it, as there was actually a lot more implied than you originally intended. Sorry.
What is smart and what isn’t depends on the objective. If secure value retention is the goal, land is definitely a much smarter choice than many other options. I just had different goals in mind and therefore consider other things to be smarter.
No hard feelings.
It’s nice to see that most people in the thread would build again. That’s a sign that they are happy with their decision. That is the most important thing overall.
If they are still happy in 30 years, they have done everything right.
B
Bieber081518 Oct 2017 19:54Nordlys schrieb:
skeptical of the financial world and our currency, so I think investing in land is not unwise. The recent price increase in agricultural land can largely be attributed to our financial system and the current lack of investment options ("interest rate crisis"). There is so much capital worldwide and so few safe, attractive investment opportunities that real estate prices understandably rise.chand1986 schrieb:
If preserving value is the goal, land is definitely a much wiser choice than many others. In my opinion, the main advantage of land is that it is not destroyed in war (it may be devastated, but not directly destroyed*) and expropriations rarely happen or occur late [In the former East Germany, there was indeed a land reform, and while this forum’s focus is on that topic, it can be noted that single-family homes and other real estate ownership were generally common and accepted]. Apart from that, other "real" assets (like company shares) also retain value. This is proven by various companies that have survived wars and other crises.However, these are, in my opinion, mainly arguments relevant over the long term and in certain catastrophic scenarios. For those expecting "normal" conditions and with limited resources, I believe a bank savings plan or ETF savings plan is still the best option—very low effort and costs, with attractive return prospects. Why invest a small amount of free capital in land when notary fees and government charges take their share upfront? In my opinion, this only makes sense with larger amounts, i.e., for the top (one?) percent of the population and serves further diversification there.
*Exceptions: Fukushima, Chernobyl.
Winniefred18 Oct 2017 20:06By the way, we don’t believe that buying or building a house is the only right choice. We rented for a long time and were happy with it. In the end, we decided to buy because rent prices had increased so much, and with the low interest rates, it simply made more sense to purchase. Another reason was our strong desire to move back to the old neighborhood, where we simply couldn’t find a suitable four-room apartment to rent. Renting has many clear advantages. Which option is better depends on personal circumstances. Although we now own a home, we still believe that renting often makes sense.
We have a footprint of about 100m2 (1,076 sq ft), plus around 40m2 (430 sq ft) of basement, a garage, and a garden shed. Previously, we had the same living space but without outbuildings and the basement, and only a small rented garden (now 650m2 (7,000 sq ft) of property). Our housing costs currently account for 36% of our total income, but that is only while I am not working. Once I return to work, this will drop to about 22–28%.
We have a footprint of about 100m2 (1,076 sq ft), plus around 40m2 (430 sq ft) of basement, a garage, and a garden shed. Previously, we had the same living space but without outbuildings and the basement, and only a small rented garden (now 650m2 (7,000 sq ft) of property). Our housing costs currently account for 36% of our total income, but that is only while I am not working. Once I return to work, this will drop to about 22–28%.
Winniefred18 Oct 2017 20:13xycrazy schrieb:
A quick update on our house construction project:
Yesterday, during the final contract meeting at the signing stage, we decided not to proceed. Why? Because our gut feeling about the whole project said no. Over the last 8 weeks, additional costs that had crept in were no longer transparently explained to us. In the end, it was about an amount of €10,000 (about $11,000) that we were speculating where exactly it came from. When our contact person then became annoyed, made a sour face, and made us feel bad for questioning certain items so close to signing the contract, we stopped the process. We had started to sign the offer and the description of the construction services but couldn’t overcome the bad feeling when it came to signing the construction contract. We felt really bad... so we took 20 minutes to discuss and decided against it. What we heard afterward just confirmed our decision. They said internally they had already bet that we wouldn’t sign, with remarks like that.
My conclusion: building with a general contractor / developer? No thanks! If we revisit the topic, we will go with the architect route. I am really done with conversations like that, haggling over every euro like at a bazaar, and the accusatory attitude. We looked at 9 different general contractors, spoke with them, negotiated, hoped, worried, got frustrated, etc. Now, after 14 months, I’ve had enough! Unfortunately, I have to say that one salesperson is just like the next. You can’t trust anyone in this industry. I say this deliberately, even though it might stir up some discussion. This is not just my experience; it was told to us by everyone in advance, and we always just laughed it off thinking… oh, we must have just dealt with the wrong people… no, no…I think you did the right thing handling it that way. We also researched new builds intensively and had a bad gut feeling with many providers straight away. Now we are very happy with our older house. We knew exactly what we were buying; everything was already there. We didn’t have to compromise on location, but there were other compromises that you probably always have to accept with an existing home unless you can spend upwards of $500,000. Good luck with your further search!
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