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?
Buchweizen schrieb:
Do you happen to watch "Mountain Life" on TLC?Just checked it out, it’s pretty intense. But definitely not for people with kids or those who want to maintain a social life. As a getaway or second home, though, it’s a dream.Farilo schrieb:
There are many users here who have decided to dedicate a large portion of their current salary each month for 20 years or more to their house.Exactly!
Farilo schrieb:
Sugarcoating and spin are common here. So the tendency of the answers in this forum is clear.Wrong! And if I remember correctly, you criticize the users—the respondents—when they challenge questioners who sugarcoat things.
Farilo schrieb:
So, don’t let yourself be cornered here. Don’t believe everything that’s written. And don’t be unsettled by comments like "Why wear such a tight corset?" or "Why not push the limit?" Of course, listen to them and think about it! But don’t forget WHERE you are asking. There are always two sides to every coin. Why are you still here if, in your opinion, things are going so completely wrong?
B
Buchweizen13 Jun 2019 12:21Lumpi_LE schrieb:
Just had a quick look, that’s really something. But not suitable for people with children or those who want to have a social life. A dream for a second home getaway.Absolutely! Sometimes families do look for – and even find – their new home there. I find that really difficult and always wonder how the children feel about it once they reach adolescence.
face26 schrieb:
So, there is no need to pretend this is a risky and speculative bet on the future. Provided the financing is sound.
There are risks, of course, some of which can be mitigated. Hello face26,
That’s exactly how it is. And that’s where the problem lies.
The real question is: When can a financing be considered sound?
Well, opinions differ exactly on that point.
Sure, with a net income of 4,000 (currency), one can pay 1,600 (currency) per month over 30 years. That still leaves 2,000 (currency) for living expenses, and everything seems fine. For some here, these figures are regarded as sound.
I consider these figures to be "unsound."
Why and how, I have already explained multiple times in the forum...
ypg schrieb:
Wrong! And if I remember correctly, you criticize the users—meaning the respondents—when they challenge questioners who tend to sugarcoat things.
So why are you still here if, in your opinion, everything is absolutely wrong? I am referring to tendencies and many/some users. Your interpretation of my texts is, as always, let's say, inconsistent. As always...
fragg schrieb:
Germany is a global leader in exports (okay, not number one anymore, but still a solid third place) and is expected to remain so in the medium term.
Berlin is the capital.
Take a look at other capitals and see what houses and land cost there, then be glad that everything in Berlin is still relatively affordable. Without war, prices will rise. Many don’t want to see this and talk about a bubble, but their perspective rarely goes beyond their own country’s borders.
In many parts of the world, it’s common to spend 50% of the household net income on rent.
How much would a comparable house cost you in rent? Why exactly should your home construction project be cheaper than that?
We pay 50% of our household net income (at the time of application) on mortgage installments — in 7 years our payment will be lower than comparable rent, in 10 years our property (in a suburban area) will be worth twice as much, and in 20 years our parents will have passed away. In 35 years, I will retire, and our expected retirement income today is already three times the mortgage payment. The trend points upward.
Our household net income increased by 17% between the loan application and full payout due to collective bargaining agreements, salary increases, and my wife changing jobs.
So just take out half a million, build something nice. The limiting factor isn’t external circumstances or the bank. If you want to build, banks are waiting for you. If you prefer to wait, you will probably have to wait a very long time. That’s exactly the kind of post I’m talking about...
Paying 50% of net income and rationalizing it.
Okay, if you earn 10 to 15k and expect an inheritance, then sure, you can do that.
Anything else is, IN MY OPINION, just wishful thinking.
And these comparisons again... How much would a comparable house cost in rent, etc.
I can’t afford a 300-meter yacht. Not even if I compare the monthly rent of such a yacht to the purchase price and see that buying is cheaper.
Sometimes you just have to face reality and accept that you can’t afford it if you want to have a life outside those four walls.
But as I said... Some people manage well paying 50% or more of their net income for their home.
Others have different ideas of life than living restricted for 30 years.