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?
nordanney schrieb:
Haha, debt-free property for retirement is a myth?
So, as a renter, you save so much that you can pay for a house in cash at retirement? I don't think that's a myth; for 90% of renters, that’s the reality. Please read carefully. I was talking about loan repayment. And when you consider loan repayment as a savings plan, you have to at least subtract maintenance costs. Because unlike rent, that money has to be invested to preserve the property’s value.
That means if you sell a property after 25-30 years for €200,000 (approximately $215,000), you haven’t actually saved €200,000. From that amount, you must deduct the expenses for maintenance and upkeep, which renters wouldn’t have.
And the next comment proves it. Repayment equals savings.
If he had kept saving at that level, he could have bought the house in cash after a hypothetical 25 years. That money could also have been invested wisely to at least keep up with inflation. All this without having to invest additional money over time.
If you want to make money with real estate, you have to rent it out or speculate.
No matter what, you’ll never all agree—everything is just too individual.
Later on, you write "We all agree that..." but personally, I have to directly disagree with you on almost every point.
The risk is not determined by the purchase price; for me, the only real risk is the resale value in case of a disaster. 500,000€ in the middle of nowhere might be unsellable, whereas in Munich it could be a risk-free bargain. Other risks depend, for example, on your job, but not on the property value.
That’s an unfair comparison. How about comparing a two-room rental apartment versus a two-room condominium? There are also people who don’t want or need a garden. I have a self-made millionaire relative who lives in a rental exactly like that.
No, because we will never agree on any household budgeting numbers. For example: Our car costs 250 all-in, and we shop more economically. Suddenly, that frees up 500 euros more for the property. You can argue endlessly here without reaching consensus.
First, you’d need to agree on what "at the end of the month" really means. Are vacations and reserves already factored in? If yes, then you could even build comfortably with a 1 euro surplus. Major repairs don’t happen right away, and a new car is already fully accounted for in your 500 all-in. So what could happen? I have NEVER suddenly needed a four-digit sum in my entire life.
I fully agree with you there.
Later on, you write "We all agree that..." but personally, I have to directly disagree with you on almost every point.
Farilo schrieb:
I mean, we all agree that buying something that costs, for example, 500,000 EURO and is financed over 30 years always involves some risk, right?
The risk is not determined by the purchase price; for me, the only real risk is the resale value in case of a disaster. 500,000€ in the middle of nowhere might be unsellable, whereas in Munich it could be a risk-free bargain. Other risks depend, for example, on your job, but not on the property value.
Farilo schrieb:
We also all agree that living in a house generally, or for most people here in the forum, is more enjoyable than living in a two-room apartment under the roof, if you can afford it?
That’s an unfair comparison. How about comparing a two-room rental apartment versus a two-room condominium? There are also people who don’t want or need a garden. I have a self-made millionaire relative who lives in a rental exactly like that.
Farilo schrieb:
So, payment 1650 EUR, reserves 150, one car 500 all-in, additional costs 200, insurance 200, retirement savings 300, food 1000, hobbies etc. 200… Nothing can go wrong in this calculation. We all agree on that, right?
No, because we will never agree on any household budgeting numbers. For example: Our car costs 250 all-in, and we shop more economically. Suddenly, that frees up 500 euros more for the property. You can argue endlessly here without reaching consensus.
Farilo schrieb:
If at the end of the month all ongoing costs are covered and you have 50 EUR left, then you CAN buy the house. But probably no one here on the forum would recommend it, right?
Everything paid and still at least 500 EUR left… In my opinion, that’s when you can realistically start thinking about a house.
First, you’d need to agree on what "at the end of the month" really means. Are vacations and reserves already factored in? If yes, then you could even build comfortably with a 1 euro surplus. Major repairs don’t happen right away, and a new car is already fully accounted for in your 500 all-in. So what could happen? I have NEVER suddenly needed a four-digit sum in my entire life.
Farilo schrieb:
Many people are simply willing to take that risk.
I fully agree with you there.
nordanney schrieb:
Exactly the same as for the apartment, with 1,250€ rent excluding utilities. With almost the same issues as a homeowner – plus rising rents.Unfortunately, most people don’t understand this ... my monthly payment stays the same for the next 20 years, while no one knows what happens with rent.Joedreck schrieb:
What I often find missing in the discussion about owning versus renting are the ownership costs. Starting with interest payments, notary fees, etc. And the absolutely most important thing: maintenance. Owning a property is generally not suitable for saving money. Here a fitting, there something for irrigation, the lawnmower, and so on.
Yes, when renting you might face an increase in rent now and then. But if something breaks, I just call the landlord and that’s it.
We also have a single-family home. But with a net income of over 4000€ (about $4400) and two children, we limited ourselves to a monthly payment of just over 800€ (about $880). We looked for properties accordingly. New builds were ruled out because of the construction costs.
Freedom is, alongside time independence, also financial independence. I expressly do NOT want to have to hold back or even calculate every daily expense. I’m living now, after all. Who knows what tomorrow will bring? And having to think about whether we can or want to go out to eat for the third time this week? No, thank you. I think that’s great. However, where I am in Bavaria in the metropolitan area, that’s simply not possible ...
A rental apartment for 1300€ (about $1430) without utilities – I’d rather build and pay 250€ (about $275) more than before each month, and have something of my own ... so you always have to consider WHERE you are building ...
In Mecklenburg-Western Pomerania, I’d also rather rent.
So if I pay 1300 for a cold apartment somewhere, then a house there probably costs around 1 million.
And now I’ll do a simple calculation, just like I usually do.
The 500 euros you pay more than the renter, I calculate over 30 years. That’s 180,000 euros. Then add interest of around 100,000 euros, which is calculated generously, so we’re already at 280,000 euros that I as a renter don’t have to pay. Add maintenance and renovation costs, and we’re over 300,000.
That’s money I as a renter don’t have to come up with in those 30 years. For me, this is a clear reason not to take on huge amounts of debt for housing.
I’d rather keep saving equity and look for affordable “divorce houses” in 10 to 20 years
if we really want to own something.
Sounds harsh, but it’s reality. Many relationships simply don’t survive the stress of building and financing.
And now I’ll do a simple calculation, just like I usually do.
The 500 euros you pay more than the renter, I calculate over 30 years. That’s 180,000 euros. Then add interest of around 100,000 euros, which is calculated generously, so we’re already at 280,000 euros that I as a renter don’t have to pay. Add maintenance and renovation costs, and we’re over 300,000.
That’s money I as a renter don’t have to come up with in those 30 years. For me, this is a clear reason not to take on huge amounts of debt for housing.
I’d rather keep saving equity and look for affordable “divorce houses” in 10 to 20 years
if we really want to own something.
Sounds harsh, but it’s reality. Many relationships simply don’t survive the stress of building and financing.
Bardamu schrieb:
So if I pay 1300 for a cold apartment somewhere, then a house there probably costs around 1 million.Twenty times the annual rent. In Munich, it’s even 30 to 35 times.
You are constantly comparing apples and oranges, as the saying goes.
What is the owner’s mortgage interest is the landlord’s return for the tenant.