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?
Bardamu schrieb:
Sounds harsh, but it’s the reality. A bit "naive" and simplistic way of thinking.
And I bet you won’t save more than €40,000 (about $43,000) in 10 years.
Because whether by force you buy a resale property or a new build – you will need the bank’s help. Especially with your math skills.
Bardamu schrieb:
So if I pay 1300 for a cold apartment somewhere, then a house there probably costs 1 million. Oh, is that so? You must know...
Bardamu schrieb:
So if I pay 1300 for a cold apartment somewhere, then a house there probably costs 1 million.Here, 130 sqm (1400 sq ft) costs about ±1500€ (euros) cold. The house with 165 sqm (1775 sq ft) did not cost a million.
Kekse schrieb:
You can either wait 10 to 20 years for houses that need renovating to appear on the market, or you can buy a renovation house that’s already 10 to 20 years old. It makes no difference, except that you live in it 10 to 20 years longer.
By the way, most of these extensive renovations and maintenance work are largely voluntary. I see this with my parents’ house. It was built in the 1970s, and almost everything that has been done since then wasn’t really necessary in the sense that anything had stopped working. The new windows are nicer, safer, and better insulated, yes. But the old ones would still have worked. The roof is asbestos-free now, but as long as the asbestos remained on the roof, it didn’t harm anyone. The bathroom was fully functional, but just not as attractive anymore. You could have waited longer; eventually everything needs doing again, and so on.
Only the heating was probably mandatory, but I’m not sure about that.
Of course, my goal isn’t to never renovate or modernize, but owning a mortgage-free house gives me the freedom to postpone or bring such work forward. When you rent, you’re at the landlord’s mercy (and still partly have to pay for modernization). The house won’t fall down if you don’t modernize it, but the rent must be paid continuously. On time every month, for life. Well, nicely said. But that just doesn’t work in most areas.
So far, I’ve bought and renovated two older homes.
There are, of course, people who buy an unrenovated older home and just move in, but I believe those are mostly a minority.
What is NOT done is factored consistently into the price.
Water supply, sewage, bathroom, electrical wiring, kitchen, windows, roof, insulation — these are the major components of a house. An older home that actually still has these original features is worth considerably less than a renovated property. Whether it works or not.
J
j.bautsch17 Jun 2019 14:10Joedreck schrieb:
An older building that is still in its original condition is worth significantly less than a renovated property. In our city, the two most expensive neighborhoods for rental apartments are, on one hand, the area where many single-family homes are located, occupied by well-off residents, and on the other hand, the neighborhood that consists almost exclusively of older apartments. These older apartments are actually very popular (which I don’t quite understand). Since I follow the market a bit (out of boredom or whatever), I know that these apartments usually have significantly lower quality finishes compared to those in the single-family home area. So just because it’s an older building doesn’t automatically mean it’s cheap...
What I meant to say is that regular investments in your home are necessary to maintain its value. If you simply live in it without any upkeep, the property will be worth less in the end.
So you can’t just rigidly calculate: I pay x amount of interest to the bank and y amount of principal repayment, and after 30 years I will have saved up the hypothetical resale value.
If you don’t invest anything during that time, you’re just wearing the house down.
Or if you do invest, that has to be factored into the calculation.
People often talk about reserves here. These have not been considered in previous calculations. That reduces the advantage compared to renting accordingly.
There are lots of costs involved. A little work in the garden here, a new motor for the garage door there.
Sure, renters probably don’t have a garden or an electric door. The living quality, in my opinion, is different as well. But owners also pay many other expenses on the side. A realistic calculation is difficult.
And I still maintain: the smart person rents their home and rents out property.
So you can’t just rigidly calculate: I pay x amount of interest to the bank and y amount of principal repayment, and after 30 years I will have saved up the hypothetical resale value.
If you don’t invest anything during that time, you’re just wearing the house down.
Or if you do invest, that has to be factored into the calculation.
People often talk about reserves here. These have not been considered in previous calculations. That reduces the advantage compared to renting accordingly.
There are lots of costs involved. A little work in the garden here, a new motor for the garage door there.
Sure, renters probably don’t have a garden or an electric door. The living quality, in my opinion, is different as well. But owners also pay many other expenses on the side. A realistic calculation is difficult.
And I still maintain: the smart person rents their home and rents out property.
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