Buying a house as a single person? Various questions!

Hey!

I am now 28 years old, live in Münster, have been single for a long time, and am considering buying a condominium or a house. I have been a civil servant for life for 3 years and currently earn about €1800 net (contributions for private health insurance and the like have already been deducted). I have saved about €36,000-40,000 in equity so far in my life (among other things, I have one building savings contract running and I am not quite sure about the current amount – hence the vague savings data. The building savings contract will run for another 2-3 years). I know that I want to spend my life in my current place of residence and, to be honest, I am slowly tired of throwing a lot of money (€630!!!) into a landlord’s pocket every month. So far, I have waited to buy a condominium/a house because I thought that maybe someday I would get married and have children – but is that a reason not to finally realize my "dream of owning a home"? Who knows, maybe I will never marry or have children! Or maybe I will have a child but live with no man – nowadays everything is possible *g* I would prefer to buy a small, own house (3-5 rooms) because I really want to have a garden and there are unfortunately very, very few offers of suitable condominiums with garden shares. Besides, I find it quite nice to have a bit of distance to the neighbors *g* I would even like to move a bit to the countryside or a suburb to have it a bit quieter and greener there.

What has so far kept me from really starting to look is the fear of such an enormous financial burden! I am simply afraid that the costs could overwhelm me and that I will one day be left with nothing and a pile of debt! Also, I have no idea at all what kinds of costs will actually come up or what I should expect! If I buy a condominium – do I only have to pay the stated price for the apartment or do I have to expect other costs as well? And if I buy a house – in addition to the actual price of the house, the costs for the land surely come on top, right? And some one-time, monthly, or yearly costs/taxes (I am thinking right now of the "real estate transfer tax" or the "property tax")? And what about the famous "single houses" – I have heard of them several times but never seen one. Why are they so rare even though there are supposedly more and more singles?

What do you think about this? And how would you assess my financial situation or do you have a tip where I can get more concrete information (other than from a bank)?

I don’t know the prices in and around Münster. So you should take a look at the real estate listings to see what roughly matches your wishes.

For additional purchase costs with existing properties, you need to add about 12 to 15%. Depending on the age of the property, more or less renovation/repair work will be necessary. From this, you subtract your equity minus your cushion and the remaining costs for furnishing. For the amount to be financed, you should calculate at least 5%, preferably 6%, interest and repayment.

In general, you must consider that with a condominium you still have monthly service charges, and with a house, you need to keep reserves for repairs. Of course, you also have costs for electricity, water, sewage, heating, chimney sweep, property tax, home insurance, etc.

When building a house, you should calculate about €1500 per m² for a simple house. In addition, there are about €30-35K additional construction costs and the costs for buying the plot of land.

On the other hand, you should determine what remains of the €1800 monthly.

A rough estimate, if that is even possible with these prices: If you take out about €200K credit for a house/condominium with 100m²:
Interest + repayment: monthly €900
Additional costs approx. €2.5-3/m² monthly: monthly €275
Service charges/repairs: monthly €200

Plus the costs for
Food/drugstore items
Clothing
Car (gas/taxes/insurance/replacement)
Insurances
Going out/movies
Gifts
Broadcast license fee (GEZ)
Membership fees
Reserves for replacement/repairs of household appliances
Miscellaneous

That will never work with €1800 net. I think even with a loan > €150K it is not manageable with your income alone, unless your career as a civil servant sees enormous salary increases in the coming years and you start with only 1% repayment and can increase later or make special repayments.

My personal opinion: If you pay €630 warm rent, then stay in a rented apartment. If that is the cold rent and you still have at least €500 left each month, then you can consider the topic further.

Since your life planning is still unclear, you should pay particular attention to ensuring that the house/apartment can always be rented out or sold again.

It wouldn’t be my thing, but maybe founding a shared flat [WG] in your own apartment/house could be an alternative?

First of all, you should be sure that you want something of your own. What happens if you meet someone who lives at some distance? What if that person already owns a house?

Building a single house when you are not sure you want to stay single is also not a good plan.

What you have to be clear about is that ownership comes with obligations. And buying an apartment is not everything. Usually, additional costs suddenly appear that you don’t have at the moment, which your landlord currently spreads across all tenants.

With a single-family house, you have to expect additional costs of about 300 € every month. That includes property taxes, insurance, garbage, electricity, water, etc. Then you also have to build reserves, because eventually something breaks on the roof, or the heating stops working, or the municipality builds a new sewer or tears up the street to lay cables. Whenever that happens, you as the owner will have to pay.

I would estimate a small house with 110 sqm at about 250,000 including additional costs. There is no luxury in that, and no big technical gadgets. In addition comes the price of the land. I see 400 sqm as the minimum.

1,800 net is not much, but especially as a single, something like that can work, since you only have to limit yourself, and don’t force your family to restrictions. However, 28 is not an age either. You still have plenty of time for such projects...

Difficult to advise on this. I would get an independent financial advisor to outline your financial framework. Maybe he also knows ways to steer the money you have so far in such a way that in 2-3 years it will work out well to build something of your own.

Renting is not bad per se. If that’s how you want it, you can just as well save the 600 € you currently save by not investing in your own property every month for your retirement. Your monthly burden with a house will most likely be 1,200 €. And so that the house will not have cost 600,000 when you painstakingly pay it off, your salary should also grow significantly, or a second earner should come along.

Well, no one here can rule that out... first of all, hardly anyone knows the prices in Münster, and secondly, it also depends on the credit conditions you get.

Let's assume you get an apartment for €150,000. Then you can probably finance it. I don't actually know, you'd need a professional for that. But what about resale, does that work well in the region? Does an apartment in Münster perhaps even have potential for appreciation? Could or would you possibly rent it out later?

It's about a lot of money, so you really have to think a lot.

You either get such sums through inheritance, a very good job, or, like most people, through a loan. And that requires good income conditions. If someone dies or becomes unable to work, hopefully they have provided for that through appropriate insurance. These term life insurances and disability insurances should, in my opinion, be almost mandatory. They cost a chunk of money per month (about €100 for both in our case, with decreasing premiums), and if you grow old in good health, that money is gone, but in the worst case, this insurance saves your house and your livelihood.

Even if you build together as a couple, the house must be financeable with one income. The costs for children are also often underestimated.

If you now ask yourself, as we do, how others manage with significantly less net income, I can tell you. They finance at the limit, give up every luxury and vacation, and pay off the house over 40 years. In the end, they pay the bank nearly €800,000 for a €300,000 loan and then have to sell the house for retirement because the pension is not enough.

Or have to give the house to the bank at the first big mishap. If you see how recklessly banks grant 100% financing today, you can be sure that in a few years many houses will be on the market, depressing the prices for second-hand properties.

Anyway, that's my opinion.

Thanks for your answers! Now I’m really down. I had hoped that at least a condominium would be possible, but apparently my salary or equity is nowhere near enough for that. But what I’m wondering now: how does one even come up with such a pile of money to buy an apartment or a house? Can you really only afford that barely as a couple? What if one of the two dies early or can no longer work??? Or if the relationship breaks up? Or if you have 2-3 kids who also need to be provided for and cause expenses?

So a good friend of mine also bought a condo as a single person... but it only cost 80,000 (80 sqm + garden plot) and she renovated it with her equity. It works perfectly for her...

We planned our house financing in such a way that my husband could bear it alone if I didn’t have a job, and conversely took out a term life insurance for him according to the repayment plan, in case something happened to him (additionally, of course, disability insurance/regular life insurances for both of us/occupational disability insurance for my husband - he is a civil servant, etc...)... so everything possible is covered by insurance. We don’t want kids and if the marriage fails, the house will just be sold (but honestly, after going through thick and thin for 10 years, we don’t expect that).

If you now ask yourself what we do, compared to others who manage with significantly less net income, I can tell you. They finance at the limit, forego every luxury and vacation, and pay off the house over 40 years. In the end, they pay the bank almost €800,000 for a €300,000 loan, and then have to sell the house for retirement because their pension is not enough.

Or they have to hand over the house to the bank at the first major mishap.
If you see how recklessly banks are granting 100% financing today, you can be sure that in a few years many houses on the market will depress the prices for used properties.

Anyway, that’s my opinion.

I have said exactly the same thing many times before... Maybe you’re stupid if you build or buy now, because in 10-15 years there will surely be many relatively new houses on the market, as people miscalculate today, can’t handle rising interest rates, children cost more than expected, and jobs are no longer as secure as they were decades ago...

@ Der Da: We seem to be on the same wavelength mentally