Costs & Funding Assessment

Hello!

I live in Northern Germany, in the Weser Ems region.
I own an old house from 1959 with 1800m2 in a residential area.

Typical plaster house from the post-war period. A front house with a later added, smaller annex.
Total living area approx. 130m2.
Now I want to completely renovate the house. My ideas are as follows:

New roofing for the front house. Dismantling old chimney.
New stairs, completely new doors and windows. All wiring, both electrical and (waste) water.
Remove screed, completely new including underfloor heating.
New heating system (gas, since current Broetje is from 1994).
Replace rear house roof with flat roof.
Side 50m2 annex to the rear house (resulting L-shape).

Of course, I would do as much as possible myself. Things like breaking up screed, tearing out wiring and completely planning and installing anew are no problem. Flooring as well.
Roof, masonry and windows/doors must of course be done professionally.

The question is simply: What could it cost?
My rough estimates:

Front house roof €20,000
Doors & windows (complete) €20,000
Electrical & water €10,000
Heating system €10,000
Stairs ???
Flat roof rear house ???
Side annex €50-80,000 including interior finishing

Of course, these amounts could be totally unrealistic, which is why I’m asking here. I imagine a rough total of €150,000.

Now to the financing:

No equity is available. Only the land with existing building. Valuation is difficult for me. Behind the house, a new development area is currently being built, where 500-800m2 plots have gone through bidding for €40-80/m2.

So €100,000 for the plot + house should be realistic?

Income: €1600 net

Additional costs (electricity/gas, garbage, insurance, chimney, property tax, etc.) €440
Car €0 (company car)
Internet €50
Sky €17
Loan €30
Mobile €10
Groceries & household €200
Personal care/clothes €50
Fun €100

That makes €900 fixed expenses, leaving €700 for savings and loan repayment.
Do you think such financing is reasonably feasible nowadays with low interest rates?

Important detail: I’m alone. No wife or child to support or consider.

Financing would of course have to run for 30-35 years and would be estimated at an interest rate of 2.7% with full repayment at €613/month. That would already be too much given the €700 leftover.

But maybe I’m also misestimating the construction costs. (?)

Would be nice if someone could take a look at this. :)

Hi, I consider your estimate quite realistic. But why do you want to add 50m² if you live alone? 130m² is more than enough.

Hello,

I can't say anything about the costs. With 1,600 net and 150k loan, it will be tight, probably the knockout criterion. Especially since you need the 150k for a complete renovation + extension

I personally don’t see 150k€ here. But I can only report from a friend who similarly converted his parents’ house, however without new roofing, without stairs, etc., with an extension. This cost him quite a bit more than 150k€, but he also didn’t do any work himself.

In addition, positions like architect, structural engineer, permits, stairs (steel/wood) min. 7k€ are missing. The estimate for the flat roof, etc. is also still missing. Just with the additional positions, you are already above your estimate of what’s feasible.

So I wouldn’t be surprised if it goes towards 200k€. At your income, however, as you correctly saw, 150k€ would already be the limit. The bank doesn’t care that you have 100k€ in equity in the form of house and land if the payment cannot be calculated. Also, banks have their own flat rates for living expenses. As far as I know, these are between 800-1000€ for a single person.

Therefore, I think your idea won’t even get through the door at the bank and that will be the end of it.

I also find the 150,000 set too low.

And with your income of 700 euros (were those left over in the past? Then why is there a loan installment of 50 euros???)? And are reserves (at least 1 euro/sqm/month) supposed to be included as well? Financing for 30-35 years?

Setting the car at 0 euros is total nonsense! It has to be taxed, is that taken into account? And if in 3 years there has to be a new job without a company car - where then come the 400-500 euros monthly (purchase, maintenance, fuel...) from?

Hi, I consider your estimate quite realistic. But why do you want to add 50m² if you live alone? 130m² are more than enough, aren’t they?

That is probably the question I get asked most often. "Because I can" is already off the table due to finances. But seriously: house from ’59, cramped, small rooms and walk-through rooms. The load-bearing walls run across the house. Thus, it is not possible to realize an airy living/dining kitchen, which I would have simply loved. Paradoxically, I was living in a 43m² apartment two years ago and got along well. But here in the house I simply want (finally) some space.
Of the 130m², for example, 13m² belong to the terrace, which will be completely torn down. Another 10m² are lost, currently housing the WC (passage to the shed). That leaves "only" about 105m².
The upper floor (30m²) is intended mainly for office and guests.
The lower floor minus the kitchen area (which is to be combined with the extension) then has "only" 70m² left, on which bathroom, guest bathroom, bedroom, dressing/fitness and entrance area have to be divided.

Hi,

I can’t say anything about the costs. With a net 1,600 and 150k loan it will be tight, probably the knockout criterion. Especially since you need the 150k for a full renovation + extension

That’s what I unfortunately think as well. :-/

Personally, I don’t see 150k€. But I can only report from a friend who renovated his parents’ house similarly.
However, without new roof covering, without stairs, etc., with an extension. This cost him quite a bit more than 150k€, but he had no DIY contribution.

Also missing are items like architect, structural engineer, permits, stairs (steel/wood) at least 7k€. The estimate for the flat roof, etc. is still missing. With these additional items alone you are over your estimate of what’s feasible.

I wouldn’t be surprised if it went toward 200k€.
At your income, as you rightly noticed, it would already be over at 150k€. The bank doesn’t care that you have 100k€ equity in the form of house and land if the installment can’t be serviced mathematically. Furthermore, banks have their own flat rates for living expenses. To my knowledge these are 800-1000€ for a single person.

Therefore, I think your idea won’t get past the bank and that’s where it will end.

I myself say that I won’t get financed for 150k. Regarding your friend, one should actually consider the location. Building here is still somewhat affordable, and through a lot of DIY there is simply enormous saving potential, since labor costs are mostly the exorbitant cost of the matter.

I also find 150,000 too low.

And with your income 700 euros (were those available in the past? Why then is there a credit installment of 50 euro???)? And there are supposed to be reserves (at least 1 euro/sqm/month) included? Financing 30-35 years?

Setting the car value at 0 euro is total nonsense! It has to be taxed, has that been considered? And if in 3 years a new job without company car must be found – where will the 400-500 euros per month (purchase, maintenance, fuel...) come from?

Yes, the 700€ were left over every month and were regularly put into retirement provisions. But since these are subject to speculation and fluctuations, I completely left that amount out.

There is no credit installment over 50€. Only over 30€. ;-)
It has existed for quite a while and will be paid off in 1 year. Sometimes a consumer loan simply makes more sense than financing in cash. (Why? Because this way I didn’t have to burden my cash reserves at that time with 2k€ and could invest them elsewhere, which will bring me more returns over the years.)

Why exactly should the 0€ for the car be nonsense? All that is already deducted in the net amounts mentioned, that’s why we are talking net.
Whether in 3 years it has to be a new job with a car is just as speculative as the possibility of a wife and 2 children. That is probably a matter of personal responsibility.
I just say: I am the longest-serving employee and will remain so for a long time.

(Otherwise I jump on the speculation train and say: In 3 years my salary will have increased, plus 400€ is already a very high estimate.)

I will probably urgently have to make appointments with the bank for a non-binding meeting as well as with a builder to get more precise key data.
Maybe the amount can still be lowered. Especially items like stairs (don’t necessarily have to be done), as well as the extension, which could possibly be smaller.

What is the situation like with KFW subsidies at the moment? Is anything worthwhile in that direction?