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
Malli schrieb:
And whenever I have taken a risk after careful consideration, it has helped me move forward in life. YES! Exactly. As I wrote: You have to grit your teeth. That is what gets you ahead.
Great contribution from you. Excellent.
Steffen80 schrieb:
Well... you can’t really generalize with a flat 30%. Our plan is to allocate about 50% of our net income within the first 5 years, which is quite high. From year 6 onward, it drops to 20%. Loan amount is 500,000. Fixed at the bank (1.5% principal repayment), we only need to cover about 13% just in case.
Regards, SteffenThe plan sounds reasonable overall.
The "magic 30%" is just thrown around casually...
On average, though, you are pretty close... haha.
27% of net income and 20% equity
Certainly a slightly higher load compared to renting a single-family home. However, as previous contributors have already mentioned, the contractual partner is a savings bank rather than a landlord who can claim personal use at short notice.
For us, the ground floor is already in place.
Certainly a slightly higher load compared to renting a single-family home. However, as previous contributors have already mentioned, the contractual partner is a savings bank rather than a landlord who can claim personal use at short notice.
For us, the ground floor is already in place.
I need to write something about this again.
The magical 30... yes, that number has been thrown around.
But I am firmly convinced that EVERY family with 30% of their own equity can manage a construction project. One will just be smaller, another bigger.
“Dogs, do you want to live forever?” An old Abbach film... with a lot of impact. Provocative.
I say: Do you want to rent forever?
About 70% of Germans: LIVE IN RENTED HOUSING. Leading in Europe. A nation of renters. Politically intended? No idea. But it’s a fact.
And landlords are... I won’t say more here. Otherwise, I’d be offending someone.
Well.
Crazy.
Either you enrich the landlord.
My ex – among other things with my money – bought a 450 HP 8-cylinder car, which I, fool that I was, even explained how to operate, because I know a thing or two, even how to configure an AMG. The car for his wife was smaller, only 250 HP (my wife and I don’t have that combined; we’re normal and drive normally).
Others live brilliantly and very well on this kind of rent, and even when arbitrariness comes into play, you’re still stuck deep down. In the end, the money is gone and flows to a bank.
Or you enrich a housing company or cooperative.
Those are genuinely interested in the wellbeing of tenants, at least to some extent. Just look at recent market takeovers (Manager-Magazin, Wi/Wo, etc.).
Those are only interested in shareholder value. Exclusively. They are squeezers.
Of course, the rent still ends up somewhere at a bank... and with greedy shareholders and pensioners in the USA/UK, who have only capital-based pension models. They demand the squeeze...
Anyone who falls within the magical 30% number and who doesn’t build today—of course with reasonable fixed interest rates and secured incomes (life: life-threatening, secured as best as one can foresee)—must have completely different reasons.
Build. Within what is possible, but build.
Pay the institution. Not profiteers or enrichment institutions. Neither does anything for you except constantly fleece you.
Sure: banks also take advantage of people... but when building, you at least have one less “middleman.” You go straight where rent money somehow ends up anyway.
That was emotional. I’m waiting for your - points and the slap from the mods... but I just had to get this off my chest.
I, this dumb old fool, had to turn 50 to realize this. How stupid I must have been in the past... I’d rather not know.
Thorsten
The magical 30... yes, that number has been thrown around.
But I am firmly convinced that EVERY family with 30% of their own equity can manage a construction project. One will just be smaller, another bigger.
“Dogs, do you want to live forever?” An old Abbach film... with a lot of impact. Provocative.
I say: Do you want to rent forever?
About 70% of Germans: LIVE IN RENTED HOUSING. Leading in Europe. A nation of renters. Politically intended? No idea. But it’s a fact.
And landlords are... I won’t say more here. Otherwise, I’d be offending someone.
Well.
Crazy.
Either you enrich the landlord.
My ex – among other things with my money – bought a 450 HP 8-cylinder car, which I, fool that I was, even explained how to operate, because I know a thing or two, even how to configure an AMG. The car for his wife was smaller, only 250 HP (my wife and I don’t have that combined; we’re normal and drive normally).
Others live brilliantly and very well on this kind of rent, and even when arbitrariness comes into play, you’re still stuck deep down. In the end, the money is gone and flows to a bank.
Or you enrich a housing company or cooperative.
Those are genuinely interested in the wellbeing of tenants, at least to some extent. Just look at recent market takeovers (Manager-Magazin, Wi/Wo, etc.).
Those are only interested in shareholder value. Exclusively. They are squeezers.
Of course, the rent still ends up somewhere at a bank... and with greedy shareholders and pensioners in the USA/UK, who have only capital-based pension models. They demand the squeeze...
Anyone who falls within the magical 30% number and who doesn’t build today—of course with reasonable fixed interest rates and secured incomes (life: life-threatening, secured as best as one can foresee)—must have completely different reasons.
Build. Within what is possible, but build.
Pay the institution. Not profiteers or enrichment institutions. Neither does anything for you except constantly fleece you.
Sure: banks also take advantage of people... but when building, you at least have one less “middleman.” You go straight where rent money somehow ends up anyway.
That was emotional. I’m waiting for your - points and the slap from the mods... but I just had to get this off my chest.
I, this dumb old fool, had to turn 50 to realize this. How stupid I must have been in the past... I’d rather not know.
Thorsten
H
Hansdampft11 Dec 2015 19:16T21150 schrieb:
I need to write something about this again.
The magical 30… yes, that number is just thrown around.
But I am firmly convinced that ANY family can manage a construction project with 30% of their income depending on their equity. One project may just be smaller, another bigger.
“Dogs, do you want to live forever?” An old Abbach film… with lots of explosive content. Provocative.
I say: Do you want to rent forever?
Almost 70% of Germans rent their homes. Leading in Europe. A nation of tenants. Politically intended? No idea. But it’s a fact.
And the landlords are:… I won’t say anything more here. Otherwise, I’d be offending myself.
Well.
Crazy.
Either you enrich the landlord.
My ex — among other things with my money — bought a 450 hp 8-cylinder car, which I, foolishly, even explained to him how to operate because I know a thing or two, including how to configure an AMG. The one for the wife was smaller, only 250 hp (my wife and I together don’t have that kind of horsepower; we’re normal and drive normal cars).
This is the kind of renting lifestyle some people live amazingly well on, and yet when arbitrariness comes into play, they are still totally screwed.
In the end, the money is gone and flows to a bank.
Or you enrich a housing company or cooperative.
They should actually care about the tenants’ well-being a bit. Look at the recent takeovers in the market (Manager Magazine, WiWo, etc.).
They only care about shareholder value. Exclusively. They are lemon squeezers.
Of course, the rent money still ends up somewhere with a bank… and with greedy shareholders and retirees in the USA/UK, who only have pension models based on capital. They demand the lemon squeezing…
Anyone who fits into the magical 30% and doesn’t build today with the current interest rates — obviously with reasonable fixed terms and secured income (life: hazardous, so secured as well as foreseeable) — must have entirely different reasons.
Build. Within your means, but build.
Pay the institution, not exploiters or profiteers. Neither does anything for you except constantly squeeze you.
Sure: banks also exploit people… but building means at least one less middleman. You end up right where the rent would end up anyway.
That was emotional. I’m waiting for the minus points from you and the reprimand from the mods… but I just had to get that off my chest.
I, a stupid old fool, had to turn 50 to realize this. How dumb I must have been in the past… I don’t want to know anymore.
ThorstenYour argument is well put and deserves respect. Economically speaking, though, you are not entirely right. You can calculate it either way. The crucial factor is often neglected: When you invest in a home, you are speculating on rising land and property prices. That can go either way. However, building a home is not only about economics. If I stay in my property for life and am happy there, I can pretty much ignore how much my property is worth...
What seems more important to me is your view that anyone can build with 30% of their income. That might be true for places like Velbert, Osnabrück, Neubrandenburg — or wherever else (even there, not everyone, of course). For the mid-Neckar region, the greater Munich area, and many other regions in southern Germany, that definitely does not apply!