Confront or better stay away?

Hello everyone.

I’m not entirely sure whether I should simply use an existing similar thread or if that would just be annoying there and I should rather write my own. If a new one is wrong, please let me know or move it. Thanks.

About the situation: We (married, both 31 years old, currently living in Munich) have been looking for a change of living space for quite some time. Everything that is available in the greater Munich area for “affordable” pennies is, to put it mildly, not really our thing. Either completely run-down or way too small or too far “out there” or something like that.

So I have spent the last few weeks wading through numerous “Building for Dummies” guides and property exchanges / house provider websites.

Now the question arises, build our own house or are our price expectations completely unrealistic and we should rather forget it, and that’s exactly where I hope for helpful advice from you.

Current situation:

* Him: net income approx. €3700
* Her: net income approx. €1400
* Loans etc.: none
* Equity (have not really started “saving” yet): approx. €30,000
* Special income: €10,000 per year from 2012 to 2015 (we can count on this from a land sale back home for sure)

Desired situation:

* Land purchase (around 400-500m²) with some distance to the city for about €100,000 (+ additional costs), a corresponding plot would be in prospect, fully developed with development plan (basement + ground floor + 1 + attic and either folding or hipped roof)
* (Finished) house construction (about 120-150m² living space + attached garage, ready to move in, but no “luxury” demands) with a provider with fixed price guarantee / corresponding developer for €180,000 - 200,000 (+ additional costs). I have at least found corresponding offers, for example at Weberhaus or Schwörerhaus.

Questions:

What do you think? I actually want to keep the special income of €10,000/year + the €30,000 equity as a “reserve”, precisely for incidental costs such as double rent, notaries, etc. According to the above calculation, I reckon about €300,000 for land and house (excluding additional costs) and another approx. €50,000 for “other”. Is that “other” too low? Or is it unrealistic to expect to get a corresponding house at those prices?

Would be grateful for any input / tips!
Regards
Andi

Hello Andi!

The income looks quite good in the described case and the mentioned construction volume. However, in the risk assessment by banks, employment situations (civil servant, permanent/temporary employee, self-employed, etc.) are evaluated, which also affects the interest rate. An optimal basis for financing is always a high equity ratio. A good equity framework is at least 1/3 of the total investment. A poor equity ratio results in a higher interest rate and also limits the possibility of a high repayment rate. High repayment is the be-all and end-all in financing; it leads to a rapid reduction of debt and shortens the term. With a high repayment rate, it is possible, in a favorable case, to complete the financing period in under 20 years. A loan term of 25 to 35 years is not recommended and also involves greater risks.

Regards

Thank you for the information.

Putting financing aside for now (I know what I need to work on before I can even seriously "get started"), is it even possible to put together a house with approximately 120-150 m² of living space including a basement and garage for 200k + about 50k incidental costs, mostly "move-in ready" (all costs already included), or is that completely unrealistic?

Thanks for the info.

Putting financing aside (here I know what I have to work on before I can even seriously "get started"), is it even possible to set up a roughly 120-150 m² living space house including a basement and garage mostly "ready to move in" for 200k + about 50k incidental costs (with all costs already included) or is that completely unrealistic?

I think that is too little. However, if you can live with the often offered "standard equipment," such as the cheapest DIY store tiles, the cheapest spiral staircase, manual shutters, laminate for 10 EUR/m², etc., it might be enough.

Calculate with 1,600-1,800 EUR per m² of living space for good to high-end equipment. I think with your salary, one also has certain standards and does not want to live worse in their own house than in the rental apartment. 1,800 x 150 m² = 270,000

Planning 50,000 EUR for additional building costs is almost a bit much. Many here in the forum recommend 20,000-35,000 EUR.

Hello back, Andi,

that pretty much covers my knowledge of the Bavarian language :)

* Land purchase (around 400-500m²) with some distance from the city around 100,000 € (+ additional costs), corresponding land would be in sight, fully developed with development plan (UG + E + 1 + D and folding or hip roof)

Does the land have a slope? What is meant by folding roof?

Kind regards

Thanks for the info.

I’m just trying to inform myself accordingly in advance and to secure against possible risks, that’s why, for example, the "high" value for additional costs ... I don’t want to have to pay extra afterwards, and I also factor in things like a kitchen or a second small car for the lady (cheap, of course :-) ).

We also want to build and I feel the same way. I want to plan everything in advance and know exactly. Unfortunately, I have already met with some surprise here. My architect, on the other hand, welcomes this very much.

It would of course be important for us to have the construction process as quick as possible, since the double financing of the apartment and loan repayment during the time from loan start to move-in can become quite significant.

Can you make general statements like "For the desired size and standard features this takes x weeks" ... so depending on the type of construction? Or is that something only Nostradamus and the like can answer?

Most general contractors offer a construction time guarantee. With a basement, it’s 7 months for me, without a basement 6 months. If the construction time is exceeded, the GC has to pay contractual penalties. Except during Christmas holidays, times when construction cannot take place (weather), etc.

As I have also read here, "worry-free packages" are largely discouraged due to dependency on one party, etc. Aren’t there any reliable reputable providers for such projects? I don’t think with our limited experience we have any chance with other solutions ;)

There are many reputable companies. I have also seen many unreliable ones. But you can quickly spot those. What was funny: there was even one who had their building owner disputes handled on 123recht. That was probably the most unprofessional thing I have seen so far. As a company, you should at least have the money for a lawyer ;)

Oh, one more thing ... if I now assume 270k as suggested, is some kind of government subsidy possible given the family income or is that rather unlikely to impossible?

There are offers from KfW and additionally a lot of regional offers. It’s best to ask your municipality or your bank. There are also things for young families, but you and the building project must meet certain criteria. This varies from federal state to federal state.