ᐅ Compromises in the Property Location and Initial Questions
Created on: 8 Dec 2016 10:24
W
Winniefred
Hello!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
I’m new here. I work part-time, and my husband is a full-time IT professional. We have two small children and are both still under 30.
For some time now, we have been considering building a house. Our bank has calculated a possible loan amount of €210,000. We want to keep our monthly payments to a maximum of €1,200 so we can still enjoy a good quality of life, and we want to fully repay the loan in no more than 15 years. We worked with the bank using very conservative assumptions (only one income, no salary increases, etc.) so that we could finance it with peace of mind.
However, in our city, houses like the one we want now cost around €400,000. We’re looking for a house with about 100-140m2 (1,076-1,506 square feet) of living space on a plot no larger than 700m2 (7,535 square feet). We want something modest and standard, with no special demands. Property prices in the city, even on the outskirts, have skyrocketed. Properties under €350,000 usually require extensive renovation, which pushes the total cost back up to €400,000 or more. That sum is simply too high and risky for us. Paying off over 30 years or sacrificing our lifestyle for 20-25 years is not an option. Condominiums aren’t much cheaper either—those typically still cost around €350,000, with no upper limit. In short: everything we can afford is further away than we would like.
My husband’s parents own a plot in a suburb that we could have. On that land, we could build our dream bungalow with our budget of €210,000, including landscaping (at least the paving and a carport; the rest of the yard is fine). The plot is just under 700m2 (7,535 square feet), well-shaped, fully developed with utilities, fenced, and flat. With this plot plus our savings, we would have substantial equity (over 40%) and could finance everything comfortably without stress. We know the area and the neighbors well; my husband grew up there, and we’ve lived there before. There is access to tram, bus, and commuter trains, plus full infrastructure like doctors and schools. The drawback is that it’s 17 kilometers (about 11 miles) from our main city. It’s a nice place, friendly, but it’s simply not “our” city, the one we love. In our city, however, we simply cannot afford anything under our self-imposed conditions. Objectively, nothing speaks against this small town: you can get to the main station in the big city within 15 minutes by commuter train, and a large shopping center is just 10 minutes away.
Have any of you made compromises regarding location? The difference is quite significant. Especially for us, since the plot is already available and wouldn’t need to be purchased for about €130,000 as a similar plot would on the outskirts of the city. And then it would be our dream home, not some awkwardly laid-out second-hand semi-detached house. But is it still reasonable to buy at all? Or would it be better just to remain renters and stay in the city we love? Our current rent is €1,000 all-inclusive, which is actually a bargain for a 102m2 (1,098 square feet) apartment in a nicely renovated older building on the city outskirts. The suburb would be another 10 kilometers (6 miles) further out...
City properties here sell very quickly. There’s no room for negotiation. But once you go to the suburbs or outskirts, prices can be really low.
So as you can see, we’re going in circles. On one hand, we want to own a home. This isn’t driven by fear of rising interest rates—that has always been our wish. On the other hand, we’re afraid to regret compromising on location. But we also don’t want to buy seriously overpriced property that we’d have to pay off for decades. Even if we relaxed our repayment goals, factoring in extra payments, pay raises, and extending the loan term to 20 years, it wouldn’t get us a loan amount of €400,000. Maybe €300,000 to €350,000 max, which would only cover a condominium.
Maybe you have some suggestions or could share your experiences and thoughts.
Thanks!
We are basically located in a village very close to the metropolitan area, meaning in a green and quiet environment with excellent connectivity. Living in the city was not an option for us, so the alternative was to choose one of the nearby villages. Naturally, prices get cheaper the farther you move away from the metropolitan area, which also means longer commuting times.
We paid €330 per square meter (about $355 per square foot), ... With just 15 to 20 minutes more commuting time, the price would have basically been halved to €150 per square meter (about $160 per square foot). For a 500 square meter (about 5,400 square foot) plot, that would be roughly €90,000.
We didn’t want a larger plot, but the house would probably have been 10 to 20 square meters (about 110 to 215 square feet) bigger there (currently just over 150), and might have had some additional features. We set a reasonably fixed budget we didn’t want to exceed, and the house size was, for us personally, what we were most willing to sacrifice. Every second saved in commuting time is priceless to us, just like quick access to cultural offerings and restaurants, without having to give up a location in a green area.
We paid €330 per square meter (about $355 per square foot), ... With just 15 to 20 minutes more commuting time, the price would have basically been halved to €150 per square meter (about $160 per square foot). For a 500 square meter (about 5,400 square foot) plot, that would be roughly €90,000.
We didn’t want a larger plot, but the house would probably have been 10 to 20 square meters (about 110 to 215 square feet) bigger there (currently just over 150), and might have had some additional features. We set a reasonably fixed budget we didn’t want to exceed, and the house size was, for us personally, what we were most willing to sacrifice. Every second saved in commuting time is priceless to us, just like quick access to cultural offerings and restaurants, without having to give up a location in a green area.
Winniefred schrieb:
Big city: We know our neighbors, we live in a pretty green area (looking out the back onto a park—unobstructed view of greenery) and it’s relatively quiet because we’re on the city outskirts. There is a warm sense of community in our house, nothing hectic or anonymous here, and parking is (almost) always available^^. ..... The city center is only 15 minutes away by train, and that’s also where I work. ...Winniefred schrieb:
In the small town, the tram only runs every 20 minutes and the commuter train every 30 minutes, which is quite an adjustment. On Saturdays, everything closes by 4 p.m. at the latest. A Sunday bakery? Doesn’t exist. Meeting other children at playgrounds? Very rare. Switching daycare to a larger facility in the small town would be necessary. Specialized secondary schools are only available in the city.Winniefred schrieb:
Objectively speaking, there is nothing wrong with this small town.Winniefred schrieb:
Of course, the advantages are clear. Economically and also for the children, the small town would be better.From your earlier posts, it sounded a bit different to me—first you write that the infrastructure is good and the small town would be better economically and for the children, but now you are somewhat criticizing it and instead emphasizing the benefits of your current suburb, which you hadn’t really mentioned until your last post.
To reach a compromise, it’s important to look at things objectively: if you consider a 10-minute difference in tram frequency a real adjustment, but honestly—where’s the big problem in that? It seems a bit exaggerated.
Winniefred schrieb:
just to be able to stay in the beloved city?I tried to make clear that your beloved city remains yours. Because if you follow your description of your current suburb, you don’t actually live in the city itself, but in a suburb! The fact is: the city center usually doesn’t have residential areas—those are mainly commercial and shopping streets. Surrounding that are the city districts, then on the city outskirts the suburbs, which still benefit from public transport but are increasingly seen as somewhat independent from the big city—pleasantly green but connected nonetheless. And you say it yourself: the boundaries are fluid. It’s only a 7 km (about 4 miles) difference now... Actually, 17 km (about 11 miles) from the center 🙄 Usually, it’s even the case that from a ring road or highway belt outside the city, it can be faster to reach the city center than from a suburb using inner-city roads. But whatever….....
Winniefred schrieb:
But we simply can’t imagine renting forever, and in the city it’s just too expensive. Paying off a mortgage over 30 years would be an absolute horror to me.Paying off a mortgage for 20 or 30 years is a horror for you—but paying rent for 45 years isn’t? I’d say: then stay where you are now. You have all the positives there—so you can do without ownership. Not everyone is suited to owning a home or a detached house. From your description, your life seems good as it is, and it seems to me you have an internal barrier to embracing a new living situation outside the city limits—so maybe it can just stay that way? 🙂
Maybe someday you’ll realize you don’t really use the advantages of the big city anymore and it won’t matter whether it’s 10 or 17 km (6 or 11 miles)... perhaps then the plot will still be buildable 🙂
Winniefred11 Dec 2016 19:16I think renting definitely has its advantages. You can move at any time, whether for work reasons or due to financial constraints. With a house and a mortgage, that’s usually different. As an alternative, we could continue renting until the kids move out, save money in the meantime, and then buy a condominium or a small house with our savings, a fully funded home savings plan, and the two government-subsidized retirement savings plans. By the time we retire, we might have paid it off. As renters, we would need a family-sized apartment for about 20 more years, then a nice three-room apartment would be enough, with a spare room for guests or future grandchildren. So it would get cheaper again. But of course, by the end of the entire rental period, we would probably have paid more than the cost of a house, even one in the city—but without owning any property. So owning property is something we will do in any case. The only question is when.
The plot won’t be available much longer if we don’t want to build on it. Otherwise, it will be sold together with the other plot, because my in-laws want to buy a smaller retirement home in the city. For them, it’s all become too much burden and work.
Yes, I think it makes a big difference in everyday life whether you can drive somewhere every 10 minutes or only every 20 minutes (less often on weekends). We have already lived in the small town for about two years. Of course, it’s not a disaster. But what we have now is better, definitely. And you don’t want to make things worse for yourself. Especially me—I’m really a big city person. I’ve lived in two small towns before and managed fine. But I was always happy to be back in the city. My husband also prefers the city, but he could move back to his hometown and would be fine there.
When it comes to the kids... however you look at it, there are pros and cons. Even for things unrelated to the children. I grew up on the outskirts of a city and already thought we lived “far out” back then. But I was still able to get everywhere on my own—from the riding club to downtown, school, tutoring, friends, and later parties. I was always independent of my parents and had short commutes. I could attend specialized secondary schools without much extra effort. Sure, as kids we didn’t have a garden, but we did have a courtyard with the kids from the neighborhood. So, I believe everything can be seen as either an advantage or disadvantage. Overall, I would say: from our point of view, the only real advantage of the small town is the price. Everything else we have at the city’s edge, the same or better (except for being close to the in-laws; which helps with childcare). For example, my parents are not poor but have consciously rented their whole lives. I wouldn’t want to live closer to the city center anyway; the downsides of big city living would be too much for me. There would really be parking shortages, stress, noise, and so on.
At the moment, we tend to get 2–3 detailed offers and then decide what to do next. But by now, we believe we’d rather stay here where we are. I simply resist the idea of trading my location on the city outskirts for the suburbs. And yes, 7 meters (7km) in the city feels like a long journey and represents a significant loss in quality of life for me. Maybe plan B (see above) is the better option after all. In any case, I just can’t get a good feeling about the idea of moving to the small town permanently—even if I keep reminding myself of the advantages.
The plot won’t be available much longer if we don’t want to build on it. Otherwise, it will be sold together with the other plot, because my in-laws want to buy a smaller retirement home in the city. For them, it’s all become too much burden and work.
Yes, I think it makes a big difference in everyday life whether you can drive somewhere every 10 minutes or only every 20 minutes (less often on weekends). We have already lived in the small town for about two years. Of course, it’s not a disaster. But what we have now is better, definitely. And you don’t want to make things worse for yourself. Especially me—I’m really a big city person. I’ve lived in two small towns before and managed fine. But I was always happy to be back in the city. My husband also prefers the city, but he could move back to his hometown and would be fine there.
When it comes to the kids... however you look at it, there are pros and cons. Even for things unrelated to the children. I grew up on the outskirts of a city and already thought we lived “far out” back then. But I was still able to get everywhere on my own—from the riding club to downtown, school, tutoring, friends, and later parties. I was always independent of my parents and had short commutes. I could attend specialized secondary schools without much extra effort. Sure, as kids we didn’t have a garden, but we did have a courtyard with the kids from the neighborhood. So, I believe everything can be seen as either an advantage or disadvantage. Overall, I would say: from our point of view, the only real advantage of the small town is the price. Everything else we have at the city’s edge, the same or better (except for being close to the in-laws; which helps with childcare). For example, my parents are not poor but have consciously rented their whole lives. I wouldn’t want to live closer to the city center anyway; the downsides of big city living would be too much for me. There would really be parking shortages, stress, noise, and so on.
At the moment, we tend to get 2–3 detailed offers and then decide what to do next. But by now, we believe we’d rather stay here where we are. I simply resist the idea of trading my location on the city outskirts for the suburbs. And yes, 7 meters (7km) in the city feels like a long journey and represents a significant loss in quality of life for me. Maybe plan B (see above) is the better option after all. In any case, I just can’t get a good feeling about the idea of moving to the small town permanently—even if I keep reminding myself of the advantages.
Winniefred11 Dec 2016 19:24I also don’t feel like we live in a suburb. It’s another 4km (2.5 miles) from us until the “city” ends, but then there are still the incorporated districts that used to be the suburbs. These usually no longer have tram connections, or you really have to travel a long time by train to get out there—if those suburbs even have a train or at least a bus connection. These are “city” districts that are actually suburbs in reality. Even though they officially still belong to the city, they would be too far out for me.
Everyone has their own preferences. I like going outside with my dog and being in the middle of nature within just 200m (220 yards). I pass by several horse paddocks every day and enjoy the peace and quiet. When I go into town for shopping, I’m really happy to get back into my car and drive home. I can also understand you; if you’re attached to city living, you probably wouldn’t be happy in a small town.
Best regards,
Sabine
Best regards,
Sabine
Winniefred11 Dec 2016 19:40That sounds really lovely! I know some friends who have places like that, and we have a family property in the Mecklenburg Lake District. It’s all nature—peace and quiet. Forests, lakes. You can walk for 3 hours through the forest without encountering a single person. Wonderful. But it’s not suitable for us to live there all year round, every day. However, we visit several times a year to recharge in nature. To find similar natural surroundings here, we would have to move quite far out—probably about 30 km (19 miles).