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!
Just wait and see: under 30, people usually have different interests compared to under 40, with more relaxed activities like mushroom picking or running at dawn 😉 By then, you’ll have more equity, giving you more options.
I’ve always expressed my concerns here when someone in their early 20s wanted to build a house. It just doesn’t match that stage of life... 😉
Regards
I’ve always expressed my concerns here when someone in their early 20s wanted to build a house. It just doesn’t match that stage of life... 😉
Regards
S
Steffen8011 Dec 2016 21:11Tego12 schrieb:
I have a slightly different opinion than the general trend in this thread: we decided in favor of location and made some compromises on the house. Not on the key points like a detached house, but it could have been a bit bigger.
However, we are happy to do without that because location is just much, much, much more important to us. Extremely fast connections while being in a green area—priceless for us. Unfortunately, that combination makes the land quite expensive. So compromises on the house itself were necessary.
Regarding financing: Nowadays, hardly anyone can pay off a house in popular locations within 15 years (okay, except Steffen, who can just pay it off out of petty cash). Nothing wrong with that, since you get long-term security with fixed interest rates.I completely agree. Only "petty cash" is of course nonsense. Otherwise, I wouldn’t need a loan of $500K (five hundred thousand dollars).
Winniefred12 Dec 2016 16:40I’m starting to feel like I have to justify myself here.
We’re not in our early twenties. We’ve been together for 8 years, married for 5, both have completed vocational training plus a master’s degree each, and we have 2 children. I think we’re not approaching this naively; we understand the pros and cons of different locations. Not everyone is cut out for rural areas or small towns, no matter how good the circumstances may be objectively.
I had also hoped to hear more experiences from people who have made compromises regarding location (or not). I have to say, the longer I think about it, the more I fear that I’m convincing myself that the small town is a good option “just” because it’s cheaper. But the feeling of "This is where I want to be!" just doesn’t happen. It’s more the opposite. I only get that feeling when I see properties in locations similar to where we currently live. Yes, I know the small town isn’t bad, and there’s nothing wrong with it—things one could probably adjust to. But it’s still not really what we envision. The plan is for this to be our permanent home. We can’t imagine ever leaving our city (or even the region). Moving abroad or to a different region/large city is out of the question. Until now, we have always categorically rejected the inherited property in the small town. It’s just never been our thing. And I’m genuinely worried that it’s only "lack of money" pushing us away, not the actual desire to live there. And that we might regret this very much later on. If we could afford something in the city, for example, we would never have considered moving to the small town. Likewise, we wouldn’t rent an apartment there anymore.
Oh dear…I hope some of this makes sense.
We’re not in our early twenties. We’ve been together for 8 years, married for 5, both have completed vocational training plus a master’s degree each, and we have 2 children. I think we’re not approaching this naively; we understand the pros and cons of different locations. Not everyone is cut out for rural areas or small towns, no matter how good the circumstances may be objectively.
I had also hoped to hear more experiences from people who have made compromises regarding location (or not). I have to say, the longer I think about it, the more I fear that I’m convincing myself that the small town is a good option “just” because it’s cheaper. But the feeling of "This is where I want to be!" just doesn’t happen. It’s more the opposite. I only get that feeling when I see properties in locations similar to where we currently live. Yes, I know the small town isn’t bad, and there’s nothing wrong with it—things one could probably adjust to. But it’s still not really what we envision. The plan is for this to be our permanent home. We can’t imagine ever leaving our city (or even the region). Moving abroad or to a different region/large city is out of the question. Until now, we have always categorically rejected the inherited property in the small town. It’s just never been our thing. And I’m genuinely worried that it’s only "lack of money" pushing us away, not the actual desire to live there. And that we might regret this very much later on. If we could afford something in the city, for example, we would never have considered moving to the small town. Likewise, we wouldn’t rent an apartment there anymore.
Oh dear…I hope some of this makes sense.
I think, subconsciously, you have already decided—against the small town. It probably won’t help if many people here say they made compromises on the location because of the cheaper price and don’t regret it, since it could be very different for you. From what you’ve described, it’s clear that the small town is not an option for you. Everyone has their own priorities: for some, it’s the location of the plot; for others, the size of the land or the house; some prioritize luxury features, while others focus on the maximum loan amount or loan term they don’t want to exceed. Everyone has their own deal-breakers and “must-haves” when thinking about their home. For you, location is top priority—and that’s completely fine. I’m afraid you wouldn’t be happy in the small town, even if, “objectively,” it’s still a well-located plot (that’s how it sounds to me 😉). If you build on that plot, I suspect you might never be fully satisfied. And honestly: is that really the point? Just owning property, even if you don’t fully stand behind it? I don’t know... I’m not trying to discourage you from taking the plot, but your descriptions make it sound like your decision is already made. Unfortunately, other users’ experiences won’t help you here... even if 100 people say they compromised on location, YOU wouldn’t necessarily be happy on THIS plot. What the alternative is for you, you’ll have to decide: longer loan term, no ownership, or something else... I know the choice isn’t easy.
We ourselves will be building in a completely rural area. There’s no tram or anything like that—just a small village, deep in the countryside. So, an absolute nightmare for you 😀. But for us, it was never a compromise. We’re “country folk”; I grew up here, our friends and families live here (or at least in neighboring villages), our workplaces are nearby, and we feel comfortable here. Moving to the city was never an option for me—that’s just not my thing. For me and my husband, there was never any question of building a house in a city, and from the start, it was absolutely clear that we would stay right here. So it’s not a compromise for us, even if for many others it would be unthinkable to build here 😉. That the land and construction costs are significantly lower here than in the city is just a positive side effect. We’re also not high earners; a city house simply wouldn’t have been financially possible for us. But we had other priorities: a plot of at least 600 cm² (approximately 6460 square feet), certain must-have extras (e.g., controlled residential ventilation, external blinds in the living area, double garage, etc.), and a maximum loan limit we wouldn’t exceed. It wasn’t always easy to bring it all together, but right now, it looks like we’ll manage to do it 🙂. But: if that hadn’t been possible, I’d rather not have built at all than to make compromises we’d never be fully happy with. We would have preferred to keep renting and saving, hoping our dream would come true in a few years... or to buy an existing property, which are still cheaper here than new builds.
We ourselves will be building in a completely rural area. There’s no tram or anything like that—just a small village, deep in the countryside. So, an absolute nightmare for you 😀. But for us, it was never a compromise. We’re “country folk”; I grew up here, our friends and families live here (or at least in neighboring villages), our workplaces are nearby, and we feel comfortable here. Moving to the city was never an option for me—that’s just not my thing. For me and my husband, there was never any question of building a house in a city, and from the start, it was absolutely clear that we would stay right here. So it’s not a compromise for us, even if for many others it would be unthinkable to build here 😉. That the land and construction costs are significantly lower here than in the city is just a positive side effect. We’re also not high earners; a city house simply wouldn’t have been financially possible for us. But we had other priorities: a plot of at least 600 cm² (approximately 6460 square feet), certain must-have extras (e.g., controlled residential ventilation, external blinds in the living area, double garage, etc.), and a maximum loan limit we wouldn’t exceed. It wasn’t always easy to bring it all together, but right now, it looks like we’ll manage to do it 🙂. But: if that hadn’t been possible, I’d rather not have built at all than to make compromises we’d never be fully happy with. We would have preferred to keep renting and saving, hoping our dream would come true in a few years... or to buy an existing property, which are still cheaper here than new builds.
You can certainly decide in favor of the city, and I understand that, but we have seen in our own experience and among many friends that once you have children, you no longer want to deal with searching for parking and carrying things up to the fifth floor, along with a cramped apartment and a difficult housing market when you want to move to a larger space.
If you choose to stay in the city because that is your strong preference, then you just have to accept the disadvantages. Most families with children that we know ultimately decided against the city because, although they had everything at their doorstep, they didn’t really have time to make use of it. Or they opted for townhouses on the outskirts, and so on—but that is not for everyone either.
If you simply don’t want to move away, then you need to get organized. Trying to paint a small town in a better light doesn’t make sense, although I personally don’t miss anything in LP. Of course, a big city offers a wider range of options for almost everything, but first, you need to be able to use them, and secondly, the transport connections in the commuter belt can be good enough as well.
In the end, everyone has to make that decision for themselves.
Best regards,
Dirk Grafe
If you choose to stay in the city because that is your strong preference, then you just have to accept the disadvantages. Most families with children that we know ultimately decided against the city because, although they had everything at their doorstep, they didn’t really have time to make use of it. Or they opted for townhouses on the outskirts, and so on—but that is not for everyone either.
If you simply don’t want to move away, then you need to get organized. Trying to paint a small town in a better light doesn’t make sense, although I personally don’t miss anything in LP. Of course, a big city offers a wider range of options for almost everything, but first, you need to be able to use them, and secondly, the transport connections in the commuter belt can be good enough as well.
In the end, everyone has to make that decision for themselves.
Best regards,
Dirk Grafe