ᐅ No building plot available due to new EU local residency model?
Created on: 11 Nov 2017 21:49
H
Hanneshickel
Hello everyone,
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
We are a family of two who have been searching for a building plot east of Munich, about 50-70km (30-45 miles) away, near the upcoming A94 highway, for several years. We have applied multiple times to local municipalities near us for a plot under the local resident model, but each time we were rejected due to too few points or because our equity or income was too high. We have too few points because we don’t have children. Since we have been searching for a long time, we have saved around €130,000 (about $140,000) and can save about €15,000 (about $16,000) more each year. However, here you are not allowed to have more savings than the plot would cost (mostly around €150-200/sqm (about $140-190/sqft), so approximately €120,000 (about $130,000)). Also, you are not allowed to earn more than the municipal average, which as a couple is about €80,000 (about $85,000) gross. We, however, earn almost double that gross, so together we have a net income of around €6,500 (about $7,000) per month (both earn roughly the same).
Therefore, our only option is to buy a plot privately. But prices here are extremely high compared to municipal land. We are talking about €500-700/sqm (about $460-650/sqft), so quickly around €300,000 (about $320,000) just for the plot. Then I estimate construction costs of about €400,000-500,000 (about $430,000-540,000) for a 160 sqm (about 1,700 sqft) house with a basement, double garage, and a simple building shape. That means approximately €700,000-800,000 (about $750,000-860,000) in total.
We don’t feel confident financing this amount, as it would easily mean paying over €2,000 (about $2,150) per month for the next 30 years. If one of us takes time off work due to having children, then there would be too little left for living expenses. Or is it now normal to finance this much for a house? My pain threshold is currently around €1,800 (about $1,950) per month for the mortgage.
What do you think?
What other options do we have to get affordable building land?
Or should we forget about building and only look for existing houses?
Thank you and best regards,
Hannes
D
Deliverer16 Nov 2017 13:38readytorumble schrieb:
I can only agree about the disability insurance. Anyone who thinks it’s unnecessary should take two minutes to think it over again and do the math with a calculator.Or you can look at the payout rates of these insurance policies. Which is mostly, not very high.
D
Deliverer16 Nov 2017 14:21Joedreck schrieb:
So it’s better to pay 10 per month. We are currently talking about income protection insurance. Not dental insurance.
readytorumble schrieb:
I can only agree regarding disability insurance. Anyone who thinks it’s unnecessary should take two more minutes to think it over and do the math with a calculator. Compared to that, contents insurance is a thousand times less important.
But sure, disability insurance can easily cost 60-80 euros or more. It’s tempting to skip it. But you really shouldn’t, even if your job is supposedly low-risk.60-80? What kind of disability insurance do you expect to get for that? You can easily double that amount. Disability insurance often only pays out under legal pressure. The claim statistics advertised by the industry are not well differentiated, and consumer associations dispute them.
I work at a desk with a healthy back (and I do what it takes to keep it that way). The biggest risk to me is stress, leading to burnout. Burnout is temporary, and disability insurance does not cover it at all.
And yet, exactly in low-risk jobs, disability insurance is money wasted. Some people would probably want insurance against lightning strikes as well.
Disability insurance is, by the way, a German concept. Abroad, the closest equivalents are things like dread disease insurance for cancer, etc., but as far as I know, those are lump-sum payments rather than lifelong pensions.
In short: low probability of occurrence, insuring a general life risk = high premiums, with legal disputes practically guaranteed (I believe a financial consumer magazine mentioned that 60% of claims are contested).
Cancer? With a pre-existing condition, you’re either uninsurable or there’s an exclusion.
The probability of developing cancer by age 59 was around 6% (men) in the US during 2011-2013 (couldn’t find other data at the moment). In your 60s, it rises to 10%, and after 70 it becomes significant. Overall, the numbers are high, but the probability during the insurance period (until retirement) is relatively low.
Of course, having close cases around you makes you very sensitive, but it distorts the actual risk.
Statistically, the risk of developing cancer by about age 50 is rather low. My kids will still be fully employed at 50-55, as will my wife (my term life insurance also ends then), so my financial commitments will only be to myself. Insure? No. Not for the amount of money it would take to maintain the goal (keeping the standard of living without working—which is already unrealistic) of such a policy.
Alex85 schrieb:
Burn Out is temporary, BU doesn’t pay anything at all.That is not entirely correct as a general statement.I consulted legal protection insurance.
Regarding disability insurance, I can only say that you need to read the fine print carefully. Clauses like the abstract reference can lead to denial of coverage.
Just as a side note: the main earner in the family is out of commission. There are two children depending on them, a spouse working part-time, and a loan repayment of €1300 (about $1400) per month. In my opinion, this kind of risk must be insured. With disability insurance, the income simply stops. And there are many reasons for disability, not just a damaged back.
Regarding disability insurance, I can only say that you need to read the fine print carefully. Clauses like the abstract reference can lead to denial of coverage.
Just as a side note: the main earner in the family is out of commission. There are two children depending on them, a spouse working part-time, and a loan repayment of €1300 (about $1400) per month. In my opinion, this kind of risk must be insured. With disability insurance, the income simply stops. And there are many reasons for disability, not just a damaged back.