Is the construction project feasible or are we taking on more than we can handle?

Hello,

we are a young couple from a small town in Saxony (30km from Leipzig). We have now been offered two plots of land for a new development area. Since building a house is a big deal, we are both unsure if we can manage it. It would be nice if you could help ease our concerns a little or, of course, express your concerns. These plots are interesting to us because, in our opinion, a nice residential area with a lot of green spaces is supposed to be created. In addition, the connection to the highway is ideal.
The allocation process runs under the motto, first come, first served. Therefore, we cannot inquire about everything in detail anymore.


General information about you:

[*]Who are you? M+F
[*]How old are you? 33, 28
[*]Are there children? No
[*]Are children planned? Yes, 1
[*]What do you do professionally? Technician and industrial clerk / soon business administrator
[*]Are you employed? Yes
[*]How many hours do you work? 40 each

Income and asset situation:

[*]What incomes do you have (gross/net)? approx. €4800 net
[*]How much equity do you have? €115,000
[*]How much equity do you want to put into the house project? €70,000

Housing costs:

[*]current cold rent €470
[*]current warm rent €600

According to our household overview, we have combined monthly expenses of approx. €2300.
This includes insurance, groceries, vacations, cars, rent, leisure, etc.
So everything that occurs throughout the year.


Income and expense totals:

[*]Total income €4800
[*]Total expenses: €2300
[*]Debts: 0

As described above, the choice is between two fully developed plots of land in a new development area without slopes.

606 sqm = €108,100 and 660 sqm = €117,800 prices include land registry, notary, and property transfer tax. The plot price is €170/sqm.

The plots are intended for bungalows, which is as desired by us.

We could finance the land without a loan, as one parent would provide an interest-free loan.

The building obligation will be 5 years. So we could wait out the current situation a bit, if that even makes sense.

It is still unclear to us what is roughly to be calculated for a 110 sqm bungalow at the moment. Is €2800/sqm realistic? Equipment as always not just standard, but also no luxury. Underfloor heating is desired. List prices e.g. at Town & Country are approx. €220,000.
Furniture, outdoor facilities, and a prefabricated garage would then be added.

A year ago we were at a local bank. They offered us €360,000 for a €1300 monthly rate. However, this is certainly outdated now 12 months later.


Thanks in advance.
L+C

, welcome to the forum, has had a bungalow of a similar size for half a year. Ours is 125sqm and has been standing for 3 years. I see the costs for Town & Country as the lower limit, without upgrades. If you have the plot, please upload it with a north arrow or reveal the name of the development plan or the building area. Then we can see what fits and according to the orientation. Trying to squeeze a desired floor plan onto the plot can go wrong.

Hello Nida,

Attached is an excerpt from the plan (blue X) with north at the top as well as a drawing with the dimensions at 1:10. I have sketched the standard Bungalow 110 from Town & Country with a 6sqm garage and terrace as an example. The blue line represents the building plots. With the smaller plot, the sealing area of 0.3 is also a bit of a concern for us. The larger one, of course, is more expensive again.

Hard to say. You can live with the equipment from Town & Country, but various upgrades always come on top. However, how much depends heavily on you. In addition, floors and painting are planned as your own work, so that adds something as well. Then kitchen, some furniture, lamps, and incidental construction costs, and you'll quickly be at 300k for the ready-to-move-in house. 120k for the plot, at least 20k, rather 30k for outdoor facilities and garage. Your lower budget is in the range of 450k. Minus equity plus buffer, we're talking about ~400k loan. With a term of 25 years and 3.5% interest, that comes to roughly 2000€ per month. Doable as long as both work, with some question marks once children arrive.

Hello,

we are a young couple from a small town in Saxony (30km to Leipzig). We have now been offered two plots of land for a new development area. Since building a house is a big deal, we are both unsure whether we can manage it. It would be nice if you could take away some of our concerns or, of course, express your own concerns. These plots are interesting to us because, in our opinion, a nice residential area with lots of green spaces should be created. In addition, the connection to the highway is ideal.
The allocation process runs on a first-come, first-served basis. Therefore, we can no longer inquire about every detail.

General information about you:

[*]Who are you? M+F
[*]How old are you? 33, 28
[*]Do you have children? No
[*]Are children planned? Yes, 1
[*]What do you do professionally? Technician and industrial clerk/soon business economist
[*]Are you employed? Yes
[*]How many hours do you work? 40 each

Income and asset situation:

[*]What income do you have (gross/net)? approx. €4800 net
[*]How much equity do you have? 115,000
[*]How much equity do you want to invest in the house project? 70,000

Housing costs:

[*]current cold rent 470
[*]current warm rent 600

According to our household overview, we have total monthly expenses of about €2300.
This includes insurance, food, vacations, cars, rent, leisure, etc.
So everything that arises over the course of the year.

Income and expenditure totals:

[*]Total income €4800
[*]Total expenses: €2300
[*]Debt: 0

As described above, the choice is between two fully developed plots in a new development area without slopes.

606 sqm = €108,100 and 660 sqm = €117,800 prices include land registry, notary, and property transfer tax. Land price is €170/sqm.

The plots are intended for bungalows, which is also what we want.

We could finance the plot without a loan, as a parent would give an interest-free loan.

The construction obligation will be 5 years. So we could wait out the current situation a bit, if that makes any sense.

We are still unclear about what a roughly 110 sqm bungalow currently costs to calculate. Is €2800/sqm realistic? Specification as always not just standard, but also no luxury. Underfloor heating is desired. List prices, for example at Town & Country, are around €220,000.
On top of that, furniture, outdoor area, and a prefabricated garage would come.

A year ago, we were at a local bank. They offered us €360,000 for a €1300 installment. But by now, 12 months later, that is certainly no longer valid.

Thank you in advance.
L+C

With a €1300 installment, everything would certainly be great. But you will certainly no longer get that. Assuming you could manage with the €360,000, which I can hardly imagine, you would have €10,800 interest in the first year at a 3% interest rate. That means €900 per month. Then you could only pay off €400, which corresponds to just over 1%. That would certainly be too little.

However, I basically see it as realistic that with your income you can easily manage €1500-€1800. You are also still young.
However, you also have to think about parental leave. It will be a bit tighter for some time then. It is also a question of how the woman wants to go back to work once the child is there.

We have almost exactly the same income and also 1 child. We are just 10 years older than you and are already halfway through the financing (we built in 2016) and have never had problems with our €1200 installment, even when we earned significantly less or during parental leave.

Since then, however, a lot has happened: plots are more expensive, construction costs significantly more expensive, interest rates higher, supply chains broken, energy and thus ancillary and living costs significantly higher,... so it is certainly not quite comparable, but still somehow possible. You have also saved up a decent amount of equity and are not excessive with 110 sqm of living space.

A 5-year construction obligation is also a buyer-friendly solution, so I would probably secure the plot in your place (if it is certain that a bungalow may be built there). You don’t even need to take much credit for that.

We have been building a 138 sqm living space + 12 sqm roof terrace bungalow since November 2021. Our total house costs amount to €440,000, plus an additional €55,000 for outdoor facilities and conversion of the plot (from forest to building land). However, the price includes many things:
- Photovoltaic system 13.26 kwp
- Controlled residential ventilation with heat recovery
- Geothermal heat pump with surface collectors
- Raising the house by one brick
- Complete earthworks
- Fireplace
- Painting + flooring work
- Electric shutters including app control
- LED spots
- Expensive window sills
- Boarding of the attic
- Complete incidental construction costs (approx. €50,000)

What is not included and paid from the remaining €55,000 financing or equity is:
- Drainage system
- Kitchen + built-in cabinets + bathroom furniture
- Outdoor facilities (fence total almost 100m + driveway + terrace 45 sqm)
- Reinforcement + plastering of the entrance columns, as well as the column of the roof terrace
- Water and electricity installation in the garden
- Earthworks for the outdoor facilities
- Conversion of the plot

First see what you really want. For the bungalow, you can safely calculate €3,000 per sqm for the standard. In addition, there are €50,000 incidental construction costs.