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?
H
hampshire14 Jun 2019 16:43@Mycraft and @Müllerin
I lived in New Mexico for a little over a year. Private homes there, unless they were built with adobe bricks, were not designed for the same lifespan as houses here. Also, the lack of insulation was compensated by significant energy input in the form of heating or cooling. This makes building as simple as a doghouse. The rest is just finish.
Furthermore, in large parts of the USA (excluding major cities), there is hardly any rental market. Of course, this means the real estate market in general works quite differently.
@Lumpi_LE: With a rental apartment, you have a defined notice period, but with a sale, you can control the timing based on the price you ask for. In a rental, the landlord can also terminate the contract (security issue...). How quickly you find a new place can psychologically wear down even the most pessimistic person in advance.
@Berlin85: You don’t need an expensive or any kind of homeownership to be happy. You’re right that there are still “affordable” (whatever that means) properties around Berlin. This is a house building forum. People here mostly build houses. This group is not representative and is biased. That has nothing to do with being “unreliable.”
I lived in New Mexico for a little over a year. Private homes there, unless they were built with adobe bricks, were not designed for the same lifespan as houses here. Also, the lack of insulation was compensated by significant energy input in the form of heating or cooling. This makes building as simple as a doghouse. The rest is just finish.
Furthermore, in large parts of the USA (excluding major cities), there is hardly any rental market. Of course, this means the real estate market in general works quite differently.
@Lumpi_LE: With a rental apartment, you have a defined notice period, but with a sale, you can control the timing based on the price you ask for. In a rental, the landlord can also terminate the contract (security issue...). How quickly you find a new place can psychologically wear down even the most pessimistic person in advance.
@Berlin85: You don’t need an expensive or any kind of homeownership to be happy. You’re right that there are still “affordable” (whatever that means) properties around Berlin. This is a house building forum. People here mostly build houses. This group is not representative and is biased. That has nothing to do with being “unreliable.”
Berlin85 schrieb:
In theory, it is possible to get land plus a house for 250,000 euros.
But: There are plots available for under 100,000 euros in the Berlin suburbs.
There are turnkey prefab houses for 130,000 euros. Yes, but what about all the additional costs, like auxiliary building costs, surveying, garden, garage, etc.? That doesn’t add up. Do you even know what the term “turnkey” really means? Look at the existing houses you can get for 250,000 euros. Do they match your dream home? If yes: problem solved.
You can approach it from two sides: What can I afford, and what do I want?
Your financial situation is – sorry for the bluntness – very fragile if you expect your income to decrease and willingly support your family. Then there really won’t be anything left, and I understand why you want to stay under 250,000 euros.
So, to ask differently: What are your housing wishes? How do you want to live? How much space do you need? Would an older existing property be acceptable?
Since your wife is an aspiring employed real estate agent, you might have connections and opportunities to snap up a cheap plot or property from someone.
Berlin85 schrieb:
I found the first response unreliable. I’m not a pessimist, but an engineer who understands numbers and mathematics, as well as being a realist. What exactly is unreliable about that?
You only provided very basic information. No one could have known that you pay alimony. It’s perfectly reasonable to ask for clarification. If you’re that sensitive about being called a pessimist, maybe you shouldn’t ask for advice in an online forum. You have to be thicker-skinned here.
Berlin85 schrieb:
In THEORY, it is also possible to get land plus a house for 250,000 euros. Nope, neither in theory nor in practice.
No new builds. And certainly not for more than two people (family planning).
Don’t come back with turnkey houses from the internet. You are an engineer, mathematician, and realist. Then research what the additional 130k euros actually covers.
Berlin85 schrieb:
In my first post, I wanted to get a feel for things... the response to this topic has been quite large!
I found the first reply rather unreliable. I'm not trying to be overly negative—I’m an engineer who understands numbers and mathematics, as well as being a realist.
I agree with that.
Many responses suggested: Why not finance 400,000 euros? My answer: Why not go straight to 600,000? You can always spend up to 60% of your income...!
But who says it will always stay like this with payments of 4xxx euros? Income will change and fluctuate. Certainly: my wife is planning to become a real estate agent or complete that qualification this year. But we are also planning to have a child next year: parental leave, then several years where my wife will work only 30 hours a week. I also financially support my mother. What about unemployment, periods of illness, etc.? What about upcoming repairs, financial reserves for the house, and tough times?
I JUST can’t understand why someone would want or need to pay every last cent of the mortgage. I addressed this in my first post. It may not have been entirely clear, or some may have overlooked it.It is definitely possible to build affordably.
A good friend built a house for his sister and her child. Including land, additional costs, landscaping, and 200 sqm (2,150 sq ft) of living space, they managed to keep it at 230,000 euros.
But at this price, you really have to do a lot yourself. Starting with earthworks, sewer connections, the shell construction with two masons and three unpaid helpers from their circle of friends, unloading bricks with a wheel loader yourself (which can be costly per load if you don’t do it yourself), only two plasterers for inside and outside plastering with two or three helpers again, installing the roof yourself, discounts on windows and doors because of personal contacts... and so on.
Here’s the thing: having many acquaintances in the trades can’t really be to anyone’s disadvantage.
You really have to ask around, compare, and organize everything. That’s a lot of work even before building and not everyone’s cup of tea.
Of course, a turnkey house is more convenient but also about twice as expensive. And the quality is roughly half as good.
And honestly, how much do you have to earn to pay off a loan of 400,000 to 600,000? That’s pure madness.
There are other things in normal life that cost money too (car, insurance, savings, small leisure comforts like a new bike or something else). You really don’t have to put all your energy, strength, and money into the house.
I’ve read a few threads here, and respect to anyone who can and wants to do it... I just couldn’t.
N
nordanney14 Jun 2019 17:49Bardamu schrieb:
And honestly, how much do you need to earn to get a loan over 400About the same as for an apartment with a basic rent of 1,250€ cold. Facing nearly the same issues as a homeowner - plus rising rents on top of that.face26 schrieb:
Nope, neither in theory nor in practice.
No new construction. And definitely not suitable for more than two people (family planning).
Actually, yes!