ᐅ Stay here (and build) or move away (and build/buy elsewhere)
Created on: 21 Mar 2022 01:47
H
Hitokiri-1978
Hello everyone,
I don’t even know where to begin. There is an older thread, but since links are considered taboo, you’ll have to search for it yourselves if you’re interested. In short, since 2018!!! we have been aware of two new residential development areas in our town, with plots allocated based on a scoring system. And as it stands, we are currently ranked 52-55 (four others have the same score and would then be drawn by lot on the allocation day) out of a maximum of 59. I don’t want to blame the municipality here for leaving four years to pass without reason, ignoring two official land value assessments amid an exploding price level, and so on. Then came Corona, now “Crazy Ivan,” no more KfW funding, skyrocketing construction costs for prefab houses, rising interest rates, and generally increasing prices. In short… it’s totally insane to build now! But... who says it won’t be even worse in three years?
Additionally, we simply want to move to a bigger place (second child), and rental apartments in the Munich suburbs are outrageously expensive. For retirement, we want to have a certain amount of value as assets.
In general, about €30,000 (approximately $32,000) would come as a gift from our families, about €60,000 (around $64,000) as an interest-free loan from various wealthy Swiss relatives, and €10,000 (around $10,700) from us as equity. We already have a financial advisor who calculated everything, and a mortgage would be possible with a monthly payment of €1,770 (around $1,880). Everything would be tight, though: gym membership canceled, no spontaneous dining out, no spontaneous activities... best if I cook lunch at home.
So… soon (unless someone files another lawsuit) the plots will be allocated. By then, we need to decide if we want to stay here in the familiar neighborhood (with all its advantages, like close proximity to the in-laws) and manage the estimated €750,000 to €850,000 (about $800,000 to $900,000)—€350,000 ($375,000) for the land and the rest for the house—without getting overwhelmed. (Net income is about €4,400 ($4,670), with €2,700 ($2,865) fixed expenses and living costs.) Alternatively, we have considered moving away from Bavaria. The Upper Franconian provinces near the Czech border are significantly cheaper for used properties, ranging roughly from €200,000 to €500,000 ($215,000 to $530,000), and we would have a lot more room and money for living there.
We have already crossed out the plots that are definitely not an option for us. Oh, and half of them are for sale, the others are assigned as leases with all their possibilities but also many problems!
It’s a painful, nagging question whether it’s better to stay here and hope for an increase in value (plus living close to the parents), make use of leasehold rights and slowly lose value, or move somewhere else entirely where prices are reportedly much lower according to Immo24. Also, my wife is assuming the current situation will continue, while I am hoping to finally get a better paying job within the next one to two years.
Clearly, we don’t want to leave, but the price level is just so insane that we have to ask ourselves if it’s really worth it anymore. This whole situation just causes headaches, with the feeling that we have to choose between bad and worse.
I don’t even know where to begin. There is an older thread, but since links are considered taboo, you’ll have to search for it yourselves if you’re interested. In short, since 2018!!! we have been aware of two new residential development areas in our town, with plots allocated based on a scoring system. And as it stands, we are currently ranked 52-55 (four others have the same score and would then be drawn by lot on the allocation day) out of a maximum of 59. I don’t want to blame the municipality here for leaving four years to pass without reason, ignoring two official land value assessments amid an exploding price level, and so on. Then came Corona, now “Crazy Ivan,” no more KfW funding, skyrocketing construction costs for prefab houses, rising interest rates, and generally increasing prices. In short… it’s totally insane to build now! But... who says it won’t be even worse in three years?
Additionally, we simply want to move to a bigger place (second child), and rental apartments in the Munich suburbs are outrageously expensive. For retirement, we want to have a certain amount of value as assets.
In general, about €30,000 (approximately $32,000) would come as a gift from our families, about €60,000 (around $64,000) as an interest-free loan from various wealthy Swiss relatives, and €10,000 (around $10,700) from us as equity. We already have a financial advisor who calculated everything, and a mortgage would be possible with a monthly payment of €1,770 (around $1,880). Everything would be tight, though: gym membership canceled, no spontaneous dining out, no spontaneous activities... best if I cook lunch at home.
So… soon (unless someone files another lawsuit) the plots will be allocated. By then, we need to decide if we want to stay here in the familiar neighborhood (with all its advantages, like close proximity to the in-laws) and manage the estimated €750,000 to €850,000 (about $800,000 to $900,000)—€350,000 ($375,000) for the land and the rest for the house—without getting overwhelmed. (Net income is about €4,400 ($4,670), with €2,700 ($2,865) fixed expenses and living costs.) Alternatively, we have considered moving away from Bavaria. The Upper Franconian provinces near the Czech border are significantly cheaper for used properties, ranging roughly from €200,000 to €500,000 ($215,000 to $530,000), and we would have a lot more room and money for living there.
We have already crossed out the plots that are definitely not an option for us. Oh, and half of them are for sale, the others are assigned as leases with all their possibilities but also many problems!
It’s a painful, nagging question whether it’s better to stay here and hope for an increase in value (plus living close to the parents), make use of leasehold rights and slowly lose value, or move somewhere else entirely where prices are reportedly much lower according to Immo24. Also, my wife is assuming the current situation will continue, while I am hoping to finally get a better paying job within the next one to two years.
Clearly, we don’t want to leave, but the price level is just so insane that we have to ask ourselves if it’s really worth it anymore. This whole situation just causes headaches, with the feeling that we have to choose between bad and worse.
We can't answer what is best for you, as many personal factors come into play. We could all complain about it, but that’s not what this is about 😉
I would just start by trying to find a job in the cheaper area. Because: building a house without a permanent job won’t work anyway.
I would just start by trying to find a job in the cheaper area. Because: building a house without a permanent job won’t work anyway.
Even though the matter isn’t really open for discussion – because it’s not feasible – I would be interested in seeing the lady’s calculation.
This can only be a 1% repayment rate, and you would have to live to 150 years old.
Hitokiri-1978 schrieb:Assumed total costs, loan amount, interest rate/term/repayment schedule.
We already have a financer who calculated everything, and a financing would be possible with a monthly payment of €1770.
This can only be a 1% repayment rate, and you would have to live to 150 years old.
W
WilderSueden21 Mar 2022 08:37Internal linking is allowed, but external linking is not.
As mentioned in previous threads, I believe you are overextending yourselves financially. This also settles the question of what would be best for you.
As mentioned in previous threads, I believe you are overextending yourselves financially. This also settles the question of what would be best for you.
B
Benutzer20021 Mar 2022 08:39Hitokiri-1978 schrieb:
(Net income at 4,400) (2,700 fixed costs and living expenses). Hitokiri-1978 schrieb:
0k from us ourselves as equity. Hitokiri-1978 schrieb:
Everything would be really tight then, my gym membership canceled, spontaneous dining out canceled, spontaneous activities... canceled, and ideally I would prepare lunch at home in advance. Find the mistake...
You don’t really believe you save €1,700 every month but someone is stealing that money on the way to your equity savings account, do you? Be honest that building a house is just too big a step for you.
M
Myrna_Loy21 Mar 2022 08:56I would look for an apartment near family, possibly to buy, but more likely to rent – the areas around Munich and the Bavarian lakes are simply no longer affordable for average earners building a house without inheritance. That is not going to change.
Then I would try to save and invest well anyway, to build up reserves. My main focus would be: is there good infrastructure for the children, good schools, and good recreational opportunities. The pandemic has clearly shown that it is not practical to move to an area just because houses are cheaper, where you don’t have reliable networks or where you cannot quickly offer or receive help when needed.
Then I would try to save and invest well anyway, to build up reserves. My main focus would be: is there good infrastructure for the children, good schools, and good recreational opportunities. The pandemic has clearly shown that it is not practical to move to an area just because houses are cheaper, where you don’t have reliable networks or where you cannot quickly offer or receive help when needed.
J
JuliaMünchen21 Mar 2022 09:21We are currently building in Munich, and I’m also hearing this from friends and family: for a normal income without much equity, without an inherited plot of land or a significant inheritance expected, it simply becomes too risky—especially with children. It is extremely difficult to purchase a house within that budget, but honestly impossible considering the additional costs. The groundwork and connection fees alone would financially break you if you don’t have a buffer and already need to use money intended for regular hobbies to cover the mortgage payments. If you have ties to another region, I would recommend taking the leap. Otherwise, it’s better to stay and look for a nice house to rent a bit further out, even though that is not easy either.