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
This is very interesting to read here, thank you for sharing.
We are not quite ready yet and have only done some calculations so far (we plan to start construction in the spring), and they look as follows.
Equity: about 20%
Monthly payment as a percentage of net income, my target: 30.1% – the lady’s target: 24.1%.
We still need to come to an agreement on that.
We are 33 and 30 years old, and I have never paid rent in my life and don’t intend to anymore. That doesn’t mean I still live with my parents—I moved out 8 years ago. We got creative since avoiding rent has always been a top priority for me.
We are not quite ready yet and have only done some calculations so far (we plan to start construction in the spring), and they look as follows.
Equity: about 20%
Monthly payment as a percentage of net income, my target: 30.1% – the lady’s target: 24.1%.
We still need to come to an agreement on that.
We are 33 and 30 years old, and I have never paid rent in my life and don’t intend to anymore. That doesn’t mean I still live with my parents—I moved out 8 years ago. We got creative since avoiding rent has always been a top priority for me.
Hansdampft schrieb:
Your unrealistic view that everyone can afford to build with 30% of their income seems much more important to address. That might apply in places like Velbert, Osnabrück, Neubrandenburg—or wherever—but certainly not everywhere. Even there, it is not true for everyone. For the greater Neckar region, the Munich metropolitan area, and many other parts of (southern) Germany, this definitely does not apply!One small—but not insignificant—point is also incorrect here. The somewhat higher cost of the construction itself is certainly not the main issue. The crucial problem is the price of land parcels, which then makes the total cost for building (which you probably meant as well) unaffordable for most higher earners, even at 30% of their income—unless a significant amount of equity is available.
Congratulations to those who inherit a plot of land!
H
Hansdampft11 Dec 2015 19:29BastianB schrieb:
One small—but not insignificant—point is still incorrect here. The slightly increased cost of the construction itself is certainly not the problem. The key issue is the land prices, which then make the total cost of building (which you probably also meant) unaffordable for most higher earners, even with 30%, unless sufficient equity is available.
Congratulations to anyone who inherits a plot of land! I don’t disagree with you. I wasn’t referring to the slightly higher construction costs, but to the incredibly higher land prices. Sometimes I see prices here of 50€/m² (5.2 $/ft²)... You can’t even get a community garden plot in Stuttgart for that.
This was admittedly a special situation and, if viewed negatively, could be seen as a bit of tenant nomadism.
During my school and vocational training years, I lived at my parents' home (which nowadays is no longer a given). I wanted to study and move out to be independent at the same time. Luckily, a one-room apartment (32cm² (344 sq ft)) very centrally located near my university was being auctioned off, and my father bought it for 11,000 EUR. Since I did not receive any student financial aid, his support allowed me to live there rent-free during my studies. The total rent would have been 230 EUR per month. That was the monthly support (not much compared to most fellow students, but just right in my case – many received more pocket money than the rent mentioned, often covering car and apartment expenses as well – but that would be off-topic). I covered everything else (phone, internet, mobile, food, clothing, hobbies) through part-time jobs. This way, I was able to live completely independently throughout my studies.
After this positive experience, I auctioned off my own condominium 3.5 years ago, which will be fully paid for by spring. We’re obviously not in a city like Stuttgart, as often mentioned as an example – this wouldn’t have worked in such areas.
Now that I’m this far, I have no intention of starting to pay rent again.
During my school and vocational training years, I lived at my parents' home (which nowadays is no longer a given). I wanted to study and move out to be independent at the same time. Luckily, a one-room apartment (32cm² (344 sq ft)) very centrally located near my university was being auctioned off, and my father bought it for 11,000 EUR. Since I did not receive any student financial aid, his support allowed me to live there rent-free during my studies. The total rent would have been 230 EUR per month. That was the monthly support (not much compared to most fellow students, but just right in my case – many received more pocket money than the rent mentioned, often covering car and apartment expenses as well – but that would be off-topic). I covered everything else (phone, internet, mobile, food, clothing, hobbies) through part-time jobs. This way, I was able to live completely independently throughout my studies.
After this positive experience, I auctioned off my own condominium 3.5 years ago, which will be fully paid for by spring. We’re obviously not in a city like Stuttgart, as often mentioned as an example – this wouldn’t have worked in such areas.
Now that I’m this far, I have no intention of starting to pay rent again.
I am currently paying 40% of my salary (which is not exceptionally high), but I was able to invest 60% equity into the building project. My wife is on parental leave for our second child and has stretched it over two years. Child benefit/parental allowance is not included in the percentage; so this percentage will decrease once my wife starts working again.
As a precaution, I could reduce the repayment rate (although it works for now), and this year I was able to make an additional lump-sum payment. I didn’t really take a proper vacation for this – which was also due to the pregnancy and then the baby. Instead, I worked on the outdoor facilities, especially the climbing frame, which kept the free days busy enough.
As a precaution, I could reduce the repayment rate (although it works for now), and this year I was able to make an additional lump-sum payment. I didn’t really take a proper vacation for this – which was also due to the pregnancy and then the baby. Instead, I worked on the outdoor facilities, especially the climbing frame, which kept the free days busy enough.