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?
Yvönnchen, so true. I have always thought of these homeowners as the worst kind of snobs, and the landlords who rent out properties as the worst criminals who should be expropriated. Oh, how wonderful the world would be if we were all equally poor and lived in prefabricated housing estates owned by housing cooperatives. But just for the sake of my insatiable wife, I built this stupid house, where now, as the owner in a new development surrounded by garden gnomes and hydrangeas, I am forced to listen to Helene Fischer on these Schwäbisch Hall stones.
H
HilfeHilfe15 Jun 2019 23:26Nordlys schrieb:
Yvönnchen, so true. I have always thought of those homeowners as the worst kind of petty people, and landlords who rent out properties as the worst criminals who should be expropriated. Oh, how wonderful the world would be if we were all equally poor and living in cooperative housing blocks. It’s only for my insatiable wife’s sake that I built this stupid owner-occupied house, where as an owner I am now forced to listen to Helene Fischer in a new housing development surrounded by garden gnomes and hydrangeas, on these Schwäbisch Hall stones. You’re the only owner who has already had 4 houses. Are you still satisfied with life?
Nordlys schrieb:
Yvönnchen, so true. I’ve always thought of these homeowners as the worst kind of sticklers, and the landlords as the most terrible criminals who should be expropriated. Oh, how nice the world would be if we were all equally poor and living in cooperative apartment blocks. But just to please my insatiable wife, I built this stupid single-family home where now, as the owner in a new housing development, I’m forced to listen to Helene Fischer among garden gnomes and hydrangeas, on these Schwäbisch Hall stones. I actually like being a stickler too.
I can sweep my own dirt under the carpet as well as the dirt in front of my door...
I can keep my skeletons in the basement... Oops, I don’t even have a basement.
I am not demeaning anyone here nor am I jealous of anyone.
The starting point of my comments was the statement that those who do not dare to take out a few hundred thousand for property ownership are "scared" or "timid."
I am taking the side of renters here and saying that cheap money from the bank no longer exists because wages and material costs have increased significantly since the period of low interest rates, so it balances out again.
No one can suddenly accumulate large capital without paying their share. But many here want to tell me otherwise.
Also, I never used the word "bondage." But what I mean is close to that.
And for the newer comments, I have only expressed criticism regarding excessive debt (over 300,000).
If homeowners in general feel addressed, there must be a reason for that.
There’s no need for pointless rambling @ypg
The starting point of my comments was the statement that those who do not dare to take out a few hundred thousand for property ownership are "scared" or "timid."
I am taking the side of renters here and saying that cheap money from the bank no longer exists because wages and material costs have increased significantly since the period of low interest rates, so it balances out again.
No one can suddenly accumulate large capital without paying their share. But many here want to tell me otherwise.
Also, I never used the word "bondage." But what I mean is close to that.
And for the newer comments, I have only expressed criticism regarding excessive debt (over 300,000).
If homeowners in general feel addressed, there must be a reason for that.
There’s no need for pointless rambling @ypg
I always find it interesting to see how often many people here (myself included) end up talking past each other...
It’s a shame we can’t at least agree on some basic “key facts” to then move the discussion forward. Instead, the conversation often goes in circles (and I’m definitely part of that).
I mean, we all agree that buying something that costs, for example, 500,000 EUR (about $550,000) and is financed over 30 years always involves some risk, right?
We also all agree that, in principle, most people here in the forum find living in a house more enjoyable than living in a 2-room apartment under the roof, if you can afford it?
Anyone here earning, let’s say, over 8,000 to 10,000 EUR (about $8,800 to $11,000) monthly doesn’t really need to participate in these debates or discussions. That’s how it is. And that’s fine.
The question of whether buying a house “makes sense” usually only arises for people with incomes around 4,000 to 6,000 EUR (about $4,400 to $6,600). Below that level, serious house-buying considerations generally don’t start (unless you live somewhere remote, but not in the commuter belts around major cities).
Then it depends... age, marital status, children (or desire for children), job, location, expected inheritance, etc. If all aligns, nowadays you can certainly buy a house with an income of 5,000 to 6,000 EUR (about $5,500 to $6,600). Life will then be less spontaneous and free, and you have to mentally accept that you’ll be paying off a big loan for 20-30 years. Which is okay. In return, everyday life at home will be nicer.
But if things don’t fit together—such as little or no equity, limited job prospects, plans for three children, living in Munich or Hamburg, combined income of 4,000 EUR (about $4,400)—then building a house simply won’t happen. End of story. You have to accept that.
For those on the borderline, for example, a combined income of 4,000 to 4,500 EUR (about $4,400 to $5,000), one child with no plans for more, living further out in a commuter belt, relatively stable job situation, and 60,000 EUR (about $66,000) in equity—well, everything depends on the passion and willingness they have for owning a house and what they are prepared to sacrifice. (The question is also whether they fully realize what those sacrifices are! Often, when you really want something, you rationalize everything else to make that main wish come true.)
For example: loan payment 1,650 EUR (about $1,800), savings 150 EUR (about $165), one car 500 EUR (about $550) all-in, utilities 200 EUR (about $220), insurance 200 EUR (about $220), retirement savings 300 EUR (about $330), food 1,000 EUR (about $1,100), hobbies, etc., 200 EUR (about $220)...
In this budget, absolutely nothing can go wrong. We can all agree on that, right?
Many people are simply willing to take that risk. For ME, it would be far too limiting. Others, however, are happy to work with those numbers.
To put it even more generally:
If, at the end of the month, all ongoing costs are covered and you have 50 EUR (about $55) left, THEN you CAN afford the house. But probably no one here in the forum would recommend it, right?
If everything is paid and you still have at least 500 EUR (about $550) left… that’s, in my opinion, when you can start thinking realistically about buying a house.
In your opinion, how much money should be left from a monthly income at the end of the month? Of course, more is better… but at least?
It’s a shame we can’t at least agree on some basic “key facts” to then move the discussion forward. Instead, the conversation often goes in circles (and I’m definitely part of that).
I mean, we all agree that buying something that costs, for example, 500,000 EUR (about $550,000) and is financed over 30 years always involves some risk, right?
We also all agree that, in principle, most people here in the forum find living in a house more enjoyable than living in a 2-room apartment under the roof, if you can afford it?
Anyone here earning, let’s say, over 8,000 to 10,000 EUR (about $8,800 to $11,000) monthly doesn’t really need to participate in these debates or discussions. That’s how it is. And that’s fine.
The question of whether buying a house “makes sense” usually only arises for people with incomes around 4,000 to 6,000 EUR (about $4,400 to $6,600). Below that level, serious house-buying considerations generally don’t start (unless you live somewhere remote, but not in the commuter belts around major cities).
Then it depends... age, marital status, children (or desire for children), job, location, expected inheritance, etc. If all aligns, nowadays you can certainly buy a house with an income of 5,000 to 6,000 EUR (about $5,500 to $6,600). Life will then be less spontaneous and free, and you have to mentally accept that you’ll be paying off a big loan for 20-30 years. Which is okay. In return, everyday life at home will be nicer.
But if things don’t fit together—such as little or no equity, limited job prospects, plans for three children, living in Munich or Hamburg, combined income of 4,000 EUR (about $4,400)—then building a house simply won’t happen. End of story. You have to accept that.
For those on the borderline, for example, a combined income of 4,000 to 4,500 EUR (about $4,400 to $5,000), one child with no plans for more, living further out in a commuter belt, relatively stable job situation, and 60,000 EUR (about $66,000) in equity—well, everything depends on the passion and willingness they have for owning a house and what they are prepared to sacrifice. (The question is also whether they fully realize what those sacrifices are! Often, when you really want something, you rationalize everything else to make that main wish come true.)
For example: loan payment 1,650 EUR (about $1,800), savings 150 EUR (about $165), one car 500 EUR (about $550) all-in, utilities 200 EUR (about $220), insurance 200 EUR (about $220), retirement savings 300 EUR (about $330), food 1,000 EUR (about $1,100), hobbies, etc., 200 EUR (about $220)...
In this budget, absolutely nothing can go wrong. We can all agree on that, right?
Many people are simply willing to take that risk. For ME, it would be far too limiting. Others, however, are happy to work with those numbers.
To put it even more generally:
If, at the end of the month, all ongoing costs are covered and you have 50 EUR (about $55) left, THEN you CAN afford the house. But probably no one here in the forum would recommend it, right?
If everything is paid and you still have at least 500 EUR (about $550) left… that’s, in my opinion, when you can start thinking realistically about buying a house.
In your opinion, how much money should be left from a monthly income at the end of the month? Of course, more is better… but at least?
H
hampshire16 Jun 2019 00:40ypg schrieb:
Don’t confuse him with the OP @Berlin85 Oops, sorry!
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