House building: sensible/realistic?

Hello everyone,

My wife and I unexpectedly came into €80,000 in equity for a property at the beginning of the year. Immediately afterward, we checked whether we were sufficiently liquid to build ourselves, but we quickly discarded that idea because it was too expensive for us. We have spent the last few months trying to find a suitable existing house, but so far none has appealed to us, and those that would appeal are simply too expensive, at least too expensive for what you get.

Together, we earn about €3,900 net (I earn €2,150, my wife €1,750), we have no children yet (2 children planned in the near future) and we actually do not want to spend more than €1,200 monthly on housing. We have estimated a flat €400 for additional costs and €150 for reserves. Additionally, we would choose a long fixed interest rate (20 years) and with a loan of about €160,000 would have a monthly installment of €650, making a total monthly burden of €1,200 for a house that would cost around €240,000 including incidental costs.

As already mentioned, we will not find anything in this price range. A house according to our idea would be a simple, detached single-family house, KfW 70, preferably 40 with about 140 sqm living space, 600 sqm plot, and roughly speaking medium equipment (underfloor heating, electric shutters, etc.). Such a house might be found in our region with some luck for €320,000, more likely €380,000 or more.

Our equity has meanwhile increased; we now have €100,000 available. Possibly there will be further support from the family in the order of €20,000, but definitely no more after that. Our consideration now is, since the prices of adequate houses are so high, whether we should build ourselves after all?

On the other hand, we do not want to stretch the monthly burden too much; €50 - €100 more would still be okay, but more than that would simply restrict us too much from our point of view, especially since children are still expected and unforeseeable events must at least be manageable to a certain extent.

For a loan of about €200,000 with a fixed interest rate of 20 years and a repayment of 2%, we would arrive at an installment of about €850, i.e. we would then have only €350 to a max of €450 left for additional costs/reserves.

Accordingly, we would have a range of €300,000 to €320,000 for a possible property. Since prices on the internet are unrealistic, we do not know whether the price lists of the construction companies are similarly unrealistic or which services are included in them, or in other words, which hidden costs there are, it is extremely difficult for us to estimate what kind of house we can get for that.

Unfortunately, we also do not yet have a plot of land in sight; here, I would roughly estimate €80,000 including acquisition costs. If you now assume ancillary construction costs of €40,000 and still need a kitchen, floor coverings, painting, and outdoor facilities, that makes €80,000 in incidental costs, i.e. only €140,000 - €160,000 remain.

The question now is, what kind of house can you get for that? How big and what kind of equipment will it roughly have? Are things like underfloor heating, electric shutters possible or pure utopia in that price range? Is a KfW 40 standard house conceivable in that price range? And if not, how much would that roughly cost?

I know these questions are difficult to answer because many aspects still play a role; for us, it is first about a rough overview of whether the project is at all feasible, and we have some reservations about having ourselves advised on such strategic questions by an alleged “advisor” (more likely a salesman) of a general contractor.

For your information: we live in the Hanover region.

Thank you very much

Meini

We have just built in Burgdorf for almost 310,000 EUR. 140 sqm Kfw 70 house, plot 570 sqm. Realistically, the price is therefore reasonable in my opinion.

: Presumably, you didn’t pay €80,000 for the plot either.

No idea what the land price is in the Hanover region, or rather, the question is whether you want to build close to the city or in the countryside.
In principle, something could certainly be done with a total budget of €320,000, but not with €80,000 for the plot + €80,000 for incidental costs/furnishing/flooring/painting/outdoor facilities. Because for €140-160k, a 140 sqm house turnkey is not realistic, let alone a KfW 40 house.

Maybe a somewhat smaller or cheaper plot would do, maybe you’re lucky that the building ancillary costs aren’t that high and maybe you can also save a bit on kitchen/floor coverings/painting and do the outdoor facilities gradually, once the first financial bottleneck is over. Then you can certainly recalculate.

In principle, however, I think it’s good that you’re thinking about your financial possibilities like this and want to build on security. And if it’s not possible now, then maybe just wait a few more years until the desired children are there and you have a secure financial basis. Meanwhile, you could still look for existing properties, maybe you’ll find one or two.

Or you buy a plot of land first and save for a few more years. The plot of land is not gone. Perhaps your circumstances will change then.

I received a brochure from a prefab house builder where the model houses have a specific and fixed price, which gives you a great rough overview of what your own wishes in terms of size and equipment would approximately cost. The same house is always offered with different KFW levels. I don't know if advertising is allowed here, so I won't mention the manufacturer's name. But you can find it if you search for wooden prefab houses. It is a regional provider based in northern Germany. The houses bear (German) women’s names.

Until you have found a plot or a house, you can definitely continue to increase your equity.

Hello,

Unfortunately, we do not have a plot in sight yet; I would generally estimate €80,000 including acquisition costs.

That depends on where you want to build. I just opened a real estate portal and quickly found plots of about 500-600 sqm (Lehrte) starting at €35,000.

... meaning there is now only €140,000 - €160,000 left.

The question now is, what kind of house can you get for that? How big and what kind of features will it approximately have? Are things like underfloor heating, electric shutters possible or pure utopia in this price range? Is a house built to the KfW-40 standard conceivable in this price range? And if not, how much would that roughly cost?

About 110/120 sqm as a KfW 70 efficiency house should be possible in the region (depending on land costs, of course, even larger); electric shutters maybe not (no one wants shutters in the North, I am always told) You won’t be able to afford KfW 40 with this budget. Why even aim for KfW 40?

... and are a bit reluctant to let ourselves be advised on such strategic questions by a supposed "advisor" (more likely a seller) of a general contractor.

Sellers are no different than the rest of the population: there are good ones and unscrupulous characters. But you only know that once you have formed a personal impression. By the way – the gut feeling is still the best indicator! Therefore, it is not very productive for you to seek substitute help via a forum, because the forum cannot provide that.

To me, you seem to have almost no idea what you and your wife want to take on; for example, the question about the possibilities of KfW 40 shows this. The forum can give you initial guidance if you spend some time reading here. However, you will not find “THE” seller or “THE” provider here, because your requirements are too varied and individual. But you will become somewhat more confident in dealing with house sellers. If you also keep in mind that “not” the price at the bottom right is the “measure of all things,” you are on a good path ;)

Rhenish greetings