Is construction on the existing property feasible or is it better to wait?

2020-08-07 20:05:26

Well, as already mentioned, we are quite security-oriented and it is often pointed out here that building always ends up costing more than planned. Therefore, we thought it better to plan a little extra so as not to be tight at the end.

2020-08-07 22:31:42

If you have income and expenses under control and don't suddenly need liquid funds again and again, that is solid financing. How much you need to have "in the nest egg" to feel safe is individual and apparently depends on age. As a student, I felt super secure with a thousand euros in the checking account. In my late 20s, I found it okay for peaceful sleep if the overdraft limit was a thousand euros away – I had experienced a nasty bankruptcy. Today, in my early 50s, I have gotten used to other "cushions" and would feel less relaxed with only a thousand euros in the checking account. What I want to say is: orient yourself to yourself and your partner. The more anxious one sets the bar because quality of life comes first. Then you can act accordingly.

2020-08-08 09:42:59

At around 30, I also quickly use up all reserves to zero. Better than additional financing. Enough remains each month to quickly rebuild reserves that can cover all contingencies. Also, after completion, one or the other [Förderung] is paid out.

2020-08-08 18:49:05

So we actually don't want to go all the way down to zero, I can't sleep peacefully at night then.. But of course you're right, better than additional financing.

2020-08-09 07:03:33

Hello everyone,

I am Maze. So far, I have only been a silent reader. But now I would appreciate an assessment from you experts on whether our planned construction project is feasible at all or if we should wait. A few years ago, we bought a small, older house (remaining debt approx. €90k), renovated it, and now want to add an extension (age-appropriate, all on one level).

About us:
Net income together approx. €5,800 / month
No children and no more planned
Expenses:
Living costs approx. €1,000
Loan installment for remaining debt approx. €650 (still 8 years)
Insurance, gas, electricity, waste, car, fuel, phone, and all other expenses approx. €1,200
Current savings rate after deducting all ongoing costs €2,600

Equity: unfortunately not much available (approx. €15k) because we put most of it into the house and gradually renovated everything

Our construction project:

We want to build an extension on our existing house (currently 80 sqm on the ground floor) to gain an additional approx. 90 sqm of living space on this level and to make everything age-appropriate.
A quote from an architect amounts to approx. €210,000 (extension, roof, facade, windows, bathroom, new heating, etc.) plus €30,000 incidental construction costs.
Because we are quite cautious people, we have planned a buffer of approx. €30,000
amounting to a total volume of approx. €270,000.

The first offer from the bank is 0.99% for 15 years (unfortunately as a subordinated loan because the house purchase loan is not yet completely paid off). The planned monthly burden is max €1,500 (interest + repayment).

We are currently uncertain whether, due to our low equity, we should already tackle the project now or rather wait and save up a bit more equity (this was not really possible so far because we put all leftover money into the house). However, interest rates are currently very low, and nobody knows what it will look like in 2-3 years.
Thank you in advance for your advice.

How old are you? So the current house has 80 sqm on the ground floor, and is there an upper floor? Honestly, I wouldn’t do anything if you are not planning to have any more children. 80 sqm is enough, perhaps you will still have an upper floor available into old age. Or if so, then don’t extend so massively. Of course, you can do it, but the question of necessity arises immediately for me here. You have a good income and are alone; with that money, I could think of better things than shelling it out for unnecessary living space.

2020-08-09 07:59:44

We are 44 and 37 years old. Yes, the current house has about 80 m², but it is spread over 2 levels. About 50 on the ground floor (eat-in kitchen, small bathroom, small living room) and upstairs there is a bedroom with closets, storage space, etc. However, the stairs to the upper floor are quite steep, which unfortunately cannot be changed without major effort. And you definitely can’t go up and down so easily when you’re older. Hence the consideration to build an extension and use the upstairs only as an "attic" (storage room). We don’t have a basement. The property is relatively large, so space-wise the extension would not be a problem. Of course, you can probably do many other great things with the money, but for us it is important that we don’t have to move out later because we are not as mobile. At the moment we are still quite young, but we are already thinking about what will come later.

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Is construction on the existing property feasible or is it better to wait?

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