Hello everyone,
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
hampshire schrieb:
It might happen, but it doesn’t have to. We are currently selling our terraced house at well over 100% above the full construction costs from 2001. It could have gone worse. You might lose some money. So what? That’s just how it is when you realign your life. Imagine how many people go through this when they separate. It’s all manageable. Yes, this works because of the significantly increased costs and the excellent low interest rates. But interest rates can’t fall much further, so I definitely don’t see prices doubling in the next 15–20 years. My crystal ball suggests it will more likely stay at this level.
H
hampshire14 Jun 2019 16:34At least this way, there is no loss when changing life direction and the associated house sale.
nordanney schrieb:
How are you calculating? How old are you? What are your plans? Family planning? Why do you want to be finished in 25 years? Why not push the limit? Income/expense calculation? Any other liabilities?
With a net income of 4xxx euros, a payment of 1,500 € should definitely be possible – what do your finances say? With that, at 4% interest rate, you could finance around €450,000. Is the payment too high?
You need to provide much more information about yourself to get reasonable advice. In my first post, I just wanted to sound things out... the response to the topic is quite large!
ypg schrieb:
And why this restriction? Because you are a pessimist by nature? I found this the first unserious answer. I am not a pessimist but an engineer who understands numbers and math, as well as a realist.
Yosan schrieb:
Why do you want to pay off the loan as quickly as possible? Farilo schrieb:
The question is: from when is a financing considered healthy?
Well, opinions differ exactly here.
Sure, with 4,000 net you can pay 1,600 monthly for 30 years. Then you still have 2,000 left for living expenses and everything seems fine. For some here, these numbers are considered healthy.
I consider those numbers to be "unhealthy."
I agree with that.
Many answers were given here with: why not finance €400,000? My answer: why not just €600,000? You could also spend 60% of your income...!
But who says it will always stay like this with a net income of 4xxx euros? Income will change and can fluctuate. Certainly: my wife will also become a real estate agent or finish that qualification this year. But we are also planning a child next year: parental leave, then several years for my wife working only 30 hours per week. I financially support my mother. What about unemployment, periods of illness, etc.? What about upcoming repairs, financial reserves for the house, and hard times?
I do NOT understand why someone would want or have to pay the rate down to the last cent. I addressed this in my first post. But apparently that was not entirely clear or some ignored it.
In THEORY, it is also possible to get land and a house for 250,000 euros.
I would like to provide a practical example, but posting links is not allowed here. However: There are plots of land available for under 100,000 euros in the outskirts of Berlin. There are turnkey prefabricated houses for 130,000 euros.
Of course: Does this mean you get fun, quality, satisfaction, etc.? Maybe yes, or maybe not quite the real thing. But it is possible!
I would like to provide a practical example, but posting links is not allowed here. However: There are plots of land available for under 100,000 euros in the outskirts of Berlin. There are turnkey prefabricated houses for 130,000 euros.
Of course: Does this mean you get fun, quality, satisfaction, etc.? Maybe yes, or maybe not quite the real thing. But it is possible!