Hello dear forum,
My partner and I, both 26 years old (+ child), are currently starting to consider the possibility of buying a house. We have received various catalogs for prefabricated houses and solid construction houses. We are also open to the idea of building through an architectural firm.
We are complete beginners in this area and quite inexperienced. Here are some key details about the desired house:
Single-family home, plot size about 500m² (5400 sq ft), living area about 120-135m² (1300-1450 sq ft), at least 3 bedrooms, no bungalow style, possibly a basement, underfloor heating at least on the ground floor, kitchen island, KfW standard at least 70. These are just the rough ideas for now.
We want to build in a village of 5,000 inhabitants in Saxony-Anhalt, where serviced plots cost around 30,000 EUR.
What total costs should we roughly expect? Is building a house possible at all with only 25,000 EUR in equity and a combined net income of 3,500 EUR? Currently, we pay 650 EUR per month for our apartment including utilities.
We would be very grateful for any tips and advice!
My partner and I, both 26 years old (+ child), are currently starting to consider the possibility of buying a house. We have received various catalogs for prefabricated houses and solid construction houses. We are also open to the idea of building through an architectural firm.
We are complete beginners in this area and quite inexperienced. Here are some key details about the desired house:
Single-family home, plot size about 500m² (5400 sq ft), living area about 120-135m² (1300-1450 sq ft), at least 3 bedrooms, no bungalow style, possibly a basement, underfloor heating at least on the ground floor, kitchen island, KfW standard at least 70. These are just the rough ideas for now.
We want to build in a village of 5,000 inhabitants in Saxony-Anhalt, where serviced plots cost around 30,000 EUR.
What total costs should we roughly expect? Is building a house possible at all with only 25,000 EUR in equity and a combined net income of 3,500 EUR? Currently, we pay 650 EUR per month for our apartment including utilities.
We would be very grateful for any tips and advice!
B
Bauherren201418 Nov 2014 11:13Hello Alex1304,
Regarding the total costs, Bauexperte will surely be able to provide you with more details. Saxony-Anhalt is still somewhat more affordable than "the rest of the world" 😉. I think €30,000 for a plot of about 500 sqm (5,400 sq ft) in a village of 5,000 residents is actually quite expensive. But be that as it may. With the house as described above, you will likely stay under €200,000 (without additional construction costs, without a basement, and without "luxury" features). On top of that come additional construction-related costs, landscaping, and special requests. As mentioned, others will be able to give you more precise information about the total costs.
In principle, financing based on these figures is certainly possible. The equity will probably not cover the additional costs and necessary extra purchases that are not included in the financing (furniture, kitchen, lighting, and all the small stuff), so a loan covering at least 100% of the costs would likely be needed. This is generally possible, but you should be aware of the risks if something goes wrong. However, the question is not what the bank would lend you (as discussed in many other threads – I recommend reading into those), but what you are willing and able to handle financially.
You should consider questions such as:
Is your family planning complete? If not, how much could you manage if one income is partially or temporarily lost?
What is your household budget? How much do you realistically spend per month (including annual or rare expenses and reserves for holidays/new car/furniture, etc.)?
Based on that: How much can you save monthly?
Also remember the usually higher additional costs that come with owning a house. Think about reserves that need to be built up to cover future renovations or repairs.
Children grow up and become more expensive.
How secure are your jobs? What happens if one of you becomes unemployed, ill, or unable to work?
...
You don’t have to answer these to us; the important thing is that you consider them carefully.
Regarding the total costs, Bauexperte will surely be able to provide you with more details. Saxony-Anhalt is still somewhat more affordable than "the rest of the world" 😉. I think €30,000 for a plot of about 500 sqm (5,400 sq ft) in a village of 5,000 residents is actually quite expensive. But be that as it may. With the house as described above, you will likely stay under €200,000 (without additional construction costs, without a basement, and without "luxury" features). On top of that come additional construction-related costs, landscaping, and special requests. As mentioned, others will be able to give you more precise information about the total costs.
In principle, financing based on these figures is certainly possible. The equity will probably not cover the additional costs and necessary extra purchases that are not included in the financing (furniture, kitchen, lighting, and all the small stuff), so a loan covering at least 100% of the costs would likely be needed. This is generally possible, but you should be aware of the risks if something goes wrong. However, the question is not what the bank would lend you (as discussed in many other threads – I recommend reading into those), but what you are willing and able to handle financially.
You should consider questions such as:
Is your family planning complete? If not, how much could you manage if one income is partially or temporarily lost?
What is your household budget? How much do you realistically spend per month (including annual or rare expenses and reserves for holidays/new car/furniture, etc.)?
Based on that: How much can you save monthly?
Also remember the usually higher additional costs that come with owning a house. Think about reserves that need to be built up to cover future renovations or repairs.
Children grow up and become more expensive.
How secure are your jobs? What happens if one of you becomes unemployed, ill, or unable to work?
...
You don’t have to answer these to us; the important thing is that you consider them carefully.
Thank you very much for the detailed response.
The plot might only cost 25,000, as there can be some minor fluctuations. How much extra would a basement add in terms of costs?
Which would you generally recommend: a prefabricated house or a solid (traditional masonry) house? I have already read some pros and cons, but I’m still not much wiser.
When referring to 100% financing, does that mean the house plus the land equals 100%, or just the house?
Yes, I’ve also read about this in several threads. We are already able, or it is possible for us, to repay between 800 and 900 EUR per month on the loan without having to make major compromises. Would that be okay and not lead to a repayment period of 50 years? Both of our jobs are very secure and, of course, permanent. I would simply say that we are both well qualified to find a new job in case of job loss. How much additional monthly cost should we expect for utilities and other expenses for the house (electricity, water, gas, waste disposal, etc.)?
From a financial point of view, would it be better to save more equity now and start building in 2 years?
The plot might only cost 25,000, as there can be some minor fluctuations. How much extra would a basement add in terms of costs?
Which would you generally recommend: a prefabricated house or a solid (traditional masonry) house? I have already read some pros and cons, but I’m still not much wiser.
When referring to 100% financing, does that mean the house plus the land equals 100%, or just the house?
Yes, I’ve also read about this in several threads. We are already able, or it is possible for us, to repay between 800 and 900 EUR per month on the loan without having to make major compromises. Would that be okay and not lead to a repayment period of 50 years? Both of our jobs are very secure and, of course, permanent. I would simply say that we are both well qualified to find a new job in case of job loss. How much additional monthly cost should we expect for utilities and other expenses for the house (electricity, water, gas, waste disposal, etc.)?
From a financial point of view, would it be better to save more equity now and start building in 2 years?
B
Bauexperte18 Nov 2014 11:44Hello,
Plot: EUR 30,000
Single-family house, 130m² (1,400 sq ft) with KfW 70 standard: EUR 182,000
Usable basement: EUR 38,000
Prefabricated garage 3 x 6m (10 x 20 ft): EUR 6,500 (including electric sectional door and strip foundations)
Additional construction costs: EUR 35,000–40,000
Painting and floor coverings as allowance: EUR 20,000
Exterior work: EUR 10,000 (only the absolute essentials)
Reserves for extras: EUR 10,000
Estimated total: EUR 336,500
If you want to build to KfW 55 standard, additional costs will apply for a controlled residential ventilation system with heat recovery, better masonry, more insulation, and an external expert appraisal.
Best regards, Bauexperte
alex1304 schrieb:This should roughly be within the following range (construction prices will increase from January 1st):
Single-family house, plot around 500m² (approx. 5,380 sq ft) – roughly 30,000 EUR, living area about 120-135m² (1,290-1,450 sq ft), at least 3 bedrooms, not a bungalow style, basement possibly, underfloor heating at least on the ground floor, kitchen island, KfW standard at least 70. These are the general ideas for now.
What total costs should we roughly expect?
Plot: EUR 30,000
Single-family house, 130m² (1,400 sq ft) with KfW 70 standard: EUR 182,000
Usable basement: EUR 38,000
Prefabricated garage 3 x 6m (10 x 20 ft): EUR 6,500 (including electric sectional door and strip foundations)
Additional construction costs: EUR 35,000–40,000
Painting and floor coverings as allowance: EUR 20,000
Exterior work: EUR 10,000 (only the absolute essentials)
Reserves for extras: EUR 10,000
Estimated total: EUR 336,500
If you want to build to KfW 55 standard, additional costs will apply for a controlled residential ventilation system with heat recovery, better masonry, more insulation, and an external expert appraisal.
Best regards, Bauexperte
B
Bauherren201418 Nov 2014 12:22What Bauexperte wrote is definitely substantial, and considering the minimal equity and income, it might be a bit too much.
I don’t like to disagree with Bauexperte 😉, but I think the item for additional construction costs in Saxony-Anhalt will probably be lower (similar to Saxony). We had significantly lower additional construction costs overall (around 20,000 € (approximately $22,000), but without extra foundation costs), and I believe that would get you quite far as well. Also, painting and flooring work can be done for well under 20,000 € (about $22,000) if no luxury finishes are desired—in our case, it was a total of 10,000 € (about $11,000), even though parts of the flooring and painting were done by specialized contractors.
Regarding the house costs, you can trust Bauexperte; she has many years or even decades of experience, and based on her own experiences, her estimated prices are quite realistic. The basement cost of 38,000 € (about $42,000) is not oversized, and I also think you will probably have to skip the basement.
In total, I believe it will be possible—if you maybe leave out the garage for now, skip the basement, and avoid premium hardwood flooring—to reduce the price considerably, but you will almost certainly end up somewhere between 250,000 € and 300,000 € (closer to 300,000 €) (approximately $275,000 to $330,000) in total.
No one here will really be able to tell you. As you probably already know, in the end—as with many other things—it is a personal decision. Qualitatively, today a prefabricated house from a reputable provider is not inferior to a solid-built house. There are also several threads on this topic here.
That always depends on how much you use 😉. If you estimate around 300 € (about $330) (+/-), that’s a good starting point. Because on top of your usual ancillary costs (which you already have in a rental apartment), you also have property tax and at least building insurance.
More equity is always good, of course. The question is how much saving is realistically possible in two years, since construction costs also rise. In the end, that is also a personal decision. Nowadays, financing is possible even with little equity. The advantage of higher equity is that your loan-to-value ratio decreases, allowing better interest rates for your mortgage, and in the event that you need to sell the house (should that ever happen), the chance of at least breaking even or making a profit is higher—rather than ending up with debt despite the sale. But that’s simply the matter of risk.
I don’t like to disagree with Bauexperte 😉, but I think the item for additional construction costs in Saxony-Anhalt will probably be lower (similar to Saxony). We had significantly lower additional construction costs overall (around 20,000 € (approximately $22,000), but without extra foundation costs), and I believe that would get you quite far as well. Also, painting and flooring work can be done for well under 20,000 € (about $22,000) if no luxury finishes are desired—in our case, it was a total of 10,000 € (about $11,000), even though parts of the flooring and painting were done by specialized contractors.
Regarding the house costs, you can trust Bauexperte; she has many years or even decades of experience, and based on her own experiences, her estimated prices are quite realistic. The basement cost of 38,000 € (about $42,000) is not oversized, and I also think you will probably have to skip the basement.
In total, I believe it will be possible—if you maybe leave out the garage for now, skip the basement, and avoid premium hardwood flooring—to reduce the price considerably, but you will almost certainly end up somewhere between 250,000 € and 300,000 € (closer to 300,000 €) (approximately $275,000 to $330,000) in total.
alex1304 schrieb:
Which would you recommend more, a prefabricated house or a solid house?
No one here will really be able to tell you. As you probably already know, in the end—as with many other things—it is a personal decision. Qualitatively, today a prefabricated house from a reputable provider is not inferior to a solid-built house. There are also several threads on this topic here.
alex1304 schrieb:
How much additional cost besides the loan payments should be expected for the house (electricity, water, gas, trash, etc.)?
That always depends on how much you use 😉. If you estimate around 300 € (about $330) (+/-), that’s a good starting point. Because on top of your usual ancillary costs (which you already have in a rental apartment), you also have property tax and at least building insurance.
alex1304 schrieb:
From a financial perspective, would it be better to save more equity now and build in 2 years?
More equity is always good, of course. The question is how much saving is realistically possible in two years, since construction costs also rise. In the end, that is also a personal decision. Nowadays, financing is possible even with little equity. The advantage of higher equity is that your loan-to-value ratio decreases, allowing better interest rates for your mortgage, and in the event that you need to sell the house (should that ever happen), the chance of at least breaking even or making a profit is higher—rather than ending up with debt despite the sale. But that’s simply the matter of risk.