ᐅ Procedure for Building a New Single-Family Home on an Existing Plot of Land
Created on: 18 Nov 2022 07:55
D
Dachshund90
Hello everyone,
I know no one has a crystal ball here, but I would still like to hear your opinions:
We have just purchased a plot of land in Hesse, currently live cheaply, and have no urgent time pressure to build (although sooner is always better), except for the 5-year building obligation required by the municipality, which, however, can be extended by 1-2 years for justified reasons. We have slowly started planning and would like to possibly have the completed plans along with the building permit for our new single-family home ready to go, so we can react relatively quickly.
My assessment is that construction prices and interest rates will change little in 2023, even if they might stabilize at a high level. How 2024 or 2025 will look, of course, no one knows. But what is your feeling:
1. Rush the planning and possibly take advantage of a small "interest dip" in 2023 for financing and start with the belief that neither interest rates nor prices will significantly fall in the medium term, and waiting is just lost time.
2. Plan completely calmly, continue to build up equity, and assume that conditions for a new build may improve by the end of 2024 or possibly 2025.
If things become more concrete soon, I would be happy to provide more information for planning and share your feedback.
I welcome any questions and opinions 🙂
Best regards
I know no one has a crystal ball here, but I would still like to hear your opinions:
We have just purchased a plot of land in Hesse, currently live cheaply, and have no urgent time pressure to build (although sooner is always better), except for the 5-year building obligation required by the municipality, which, however, can be extended by 1-2 years for justified reasons. We have slowly started planning and would like to possibly have the completed plans along with the building permit for our new single-family home ready to go, so we can react relatively quickly.
My assessment is that construction prices and interest rates will change little in 2023, even if they might stabilize at a high level. How 2024 or 2025 will look, of course, no one knows. But what is your feeling:
1. Rush the planning and possibly take advantage of a small "interest dip" in 2023 for financing and start with the belief that neither interest rates nor prices will significantly fall in the medium term, and waiting is just lost time.
2. Plan completely calmly, continue to build up equity, and assume that conditions for a new build may improve by the end of 2024 or possibly 2025.
If things become more concrete soon, I would be happy to provide more information for planning and share your feedback.
I welcome any questions and opinions 🙂
Best regards
W
WilderSueden19 Nov 2022 18:22Dachshund90 schrieb:
Among acquaintances, people often say: just wait 1-2 years, then everything will become easier and cheaper…That’s what some people thought a year ago as well. Then prices kept soaring further, along with interest rates. Whether this trend will continue... at least for construction costs, there are hardly any buyers left who can afford the asking prices. Key interest rates are likely to rise further, but how much this will affect the long-term rates remains to be seen.K
karl.jonas21 Nov 2022 23:20Dachshund90 schrieb:
hurry up with the planning and possibly take advantage of a small "interest rate dip" for financing in 2023 How are you building? With a general contractor or managing the construction yourself? If you plan to manage certain construction phases yourself, it can also be helpful to take advantage of "availability gaps" with the contractors. For example, schedule the foundation or slab work when the excavation contractor has time (and offers a better price than if they had to handle three projects at once). So definitely move forward with planning and submit the building permit / planning permission application, so you can start when conditions are favorable for you.
Nida35a schrieb:
The building permit has an expiration date; you can’t just get it out after three years and start building like that As has already been mentioned, that’s not entirely correct. A friend of mine just excavated the foundation pit after ten years. Of course, with regular extensions of the permit.
D
Dachshund9022 Nov 2022 12:09Hello everyone,
thank you for your further contributions. We have now spoken with an architect and are waiting for the first appointment to have a professional design created based on our initial drafts. Additionally, we are in contact with the bank to see what is actually possible. Of course, from now on it’s also about finances and feasibility.
We would like to proceed with self-management in order to possibly use the opportunities you mentioned. Whether this will really work out remains to be seen. In addition, we have contacts with several companies for partial trades that we would like to incorporate.
So, we are starting with the planning and will see what happens over the next few weeks and whether it really results in a feasible project that can start next year.
Best regards
thank you for your further contributions. We have now spoken with an architect and are waiting for the first appointment to have a professional design created based on our initial drafts. Additionally, we are in contact with the bank to see what is actually possible. Of course, from now on it’s also about finances and feasibility.
karl.jonas schrieb:
How are you planning to build? With a general contractor or by self-managing? If you intend to self-manage certain construction phases, it can also be useful to take advantage of "availability gaps" with the subcontractors. For example, having the foundation or slab done when the excavation contractor has time (and offers a better price than if they had to handle three projects simultaneously). In any case, proceed with planning and submit the building permit / planning permission so you can start when it is economically favorable for you.
It has already been said that this is not always the case. A friend of mine just excavated his foundation pit after ten years. Of course, with regular extensions of the permit.
We would like to proceed with self-management in order to possibly use the opportunities you mentioned. Whether this will really work out remains to be seen. In addition, we have contacts with several companies for partial trades that we would like to incorporate.
So, we are starting with the planning and will see what happens over the next few weeks and whether it really results in a feasible project that can start next year.
Best regards
Dachshund90 schrieb:
We have already spoken with an architect and are waiting for the first appointment to have a professional design created based on our initial sketches.Please do not show the architect the basic sketches; instead, write down what you want. This way, the architect has to be creative!
D
Dachshund9014 Dec 2022 12:33Hello everyone,
in the meantime, we have gathered a lot of information and started planning. This week we have a follow-up appointment with the architect, and we have already met with the bank.
As expected, it now comes down to the finances. We find it mentally challenging to consider installments exceeding 2,000 (dollars/pounds/etc.).
Roughly speaking, the household income is around 6,500 (dollars/pounds/etc.) and the expenses are about 3,000 (dollars/pounds/etc.). There is some buffer on the income side that I don’t want to factor into the initial estimates yet, while the expenses have been calculated quite precisely and even on the generous side.
What would be your feeling regarding the installment amount?
At this point, I prefer not to discuss the current calculations and information from the bank. Depending on the repayment and interest rate as well as the financing setup, installments both above and below 2,000 (dollars/pounds/etc.) seem possible. For now, it’s about the feeling for a payment and what one feels comfortable committing to monthly with a clear conscience.
Best regards
in the meantime, we have gathered a lot of information and started planning. This week we have a follow-up appointment with the architect, and we have already met with the bank.
As expected, it now comes down to the finances. We find it mentally challenging to consider installments exceeding 2,000 (dollars/pounds/etc.).
Roughly speaking, the household income is around 6,500 (dollars/pounds/etc.) and the expenses are about 3,000 (dollars/pounds/etc.). There is some buffer on the income side that I don’t want to factor into the initial estimates yet, while the expenses have been calculated quite precisely and even on the generous side.
What would be your feeling regarding the installment amount?
At this point, I prefer not to discuss the current calculations and information from the bank. Depending on the repayment and interest rate as well as the financing setup, installments both above and below 2,000 (dollars/pounds/etc.) seem possible. For now, it’s about the feeling for a payment and what one feels comfortable committing to monthly with a clear conscience.
Best regards
X
xMisterDx14 Dec 2022 12:47With the information provided... what exactly are you supposed to do with it?
For example, how much is your rent? You pay that anyway, whether it’s for an apartment or a house.
Otherwise, there are general rules of thumb. No more than 35, at most 40% of your net income should go toward your loan payment, so for you that’s a maximum of 2,600 EUR.
And the repayment rate should be at least 2%.
How much you can afford to pay is something you have to decide. You know best what you’re willing to give up to achieve the dream of owning your own home, and what you’re not. You need to ask yourselves this very realistically.
For example, I personally don’t mind not going on vacation or flying at all. Others might see this as a huge loss of quality of life. Or, for instance, we’re also fine with just one car…
In any case, it doesn’t help to set unrealistic goals now, like “We’ll just live like beggars for the first 10 years,” because that won’t work. Not as a couple, and definitely not with children.[/B]
For example, how much is your rent? You pay that anyway, whether it’s for an apartment or a house.
Otherwise, there are general rules of thumb. No more than 35, at most 40% of your net income should go toward your loan payment, so for you that’s a maximum of 2,600 EUR.
And the repayment rate should be at least 2%.
How much you can afford to pay is something you have to decide. You know best what you’re willing to give up to achieve the dream of owning your own home, and what you’re not. You need to ask yourselves this very realistically.
For example, I personally don’t mind not going on vacation or flying at all. Others might see this as a huge loss of quality of life. Or, for instance, we’re also fine with just one car…
In any case, it doesn’t help to set unrealistic goals now, like “We’ll just live like beggars for the first 10 years,” because that won’t work. Not as a couple, and definitely not with children.[/B]
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