Rough planning house construction - financially feasible?

  • Erstellt am 2016-01-03 20:21:54

Veltins

2016-01-03 20:21:54
  • #1
Hello everyone,

the topic of property ownership is currently occupying us a lot, and after observing the market for about three quarters of a year, we have realized that buying is hardly an option anymore and that we cannot avoid the topic of building. In the past few weeks, we have therefore created a list of requirements, categorizing what is mandatory, nice to have, and not feasible, and outlined the framework conditions. The question is whether a) we were perhaps too naive on some points and b) we might have forgotten to consider some things. Important: the plot of land and the house to be built on it are not yet fixed, but even if it doesn’t become concrete, we remain exactly in this league.

Regarding the house details:

Location: Hagen, Westphalia
Plot: 520 sqm
Price: 115,000 EUR fully developed
House: 140 sqm solid construction, turnkey, garage. KfW40
Price: 285,000 EUR including garage

Total: roughly 400,000 plus additional building costs such as notary fees etc.
The calculation is roughly rounded up; overall, it is a few thousand less, but it’s more about the general framework conditions.

Current situation: rental apartment, 800 EUR cold rent.

On the financial side:

Family, 2 children, 1.5 and 0 years (coming in spring). He: public service, permanent contract, 2,700 net, additionally freelance, annual income approx. 15,000 EUR extra. She: childcare until spring 2018, parental allowance 950 EUR for 2 years. Afterwards part-time employment at a similar level. Additionally child benefit 2 x 188 EUR plus childcare allowance 150 EUR. (I always leave out the last amounts in calculations since a) they are not endless and b) children simply cost money). My freelance work is still cautiously estimated as this only reflects the annual surplus after all costs, including calculated expenses and travel costs.

Equity capital:

50,000 EUR as a mature building savings contract (possibility of 50,000 as a loan option at 1.99%)
35,000 EUR liquid funds in a daily allowance account
20,000 EUR in stocks and funds (can be liquidated anytime with a profit, but I wouldn’t want to do that right now)
8,000 EUR in physical precious metals
10,000 EUR as a claim, which is currently repaid monthly
10,000 EUR as liquid funds in old savings plans, cancellable quarterly but not clever given the conditions.

I rarely include last positions such as gold or the claim currently being repaid in my calculation because they always represent a buffer. The default risk of the claim is by the way 0.

Roughly summarized: good 100,000 equity immediately available. If needed, somewhat more as well. However, due to the earnings opportunities in relation to favorable construction financing, liquidation does not really make sense.

The question is: Originally, I thought I could manage with 350k all in (friends of ours did it like this), but one or the other wish quickly pushes you higher. How is the assessment of equity, income in relation to the purchase price? Feasible? KFW funding at 0.75% would be possible up to 100,000 from 03/16 plus 10,000 premium.

We want to maintain our carefree standard of living (2 new cars at the moment, vacation 1-2 times a year) without indulging in luxury. A complete renunciation just for the house would not be an option. The idea looks like this:

100,000 equity plus incidental costs paid from equity, 300,000 loan as a mix of KfW and loan with special repayment option annually, since I in particular have irregular income due to my self-employment, which should be used for additional repayment. I have deliberately excluded own work on the house because I can only manage simple tasks like wallpapering myself. The above offer would be all inclusive.

I look forward to your assessment and thank you in advance for the valuable tips!
 

lastdrop

2016-01-03 20:29:05
  • #2
You only have 85k liquid equity, right?

And how will all the additional construction costs be financed?
 

Legurit

2016-01-03 20:29:41
  • #3
Feasible indeed... however, the question is somewhat when you want to have paid off the house - roughly you have about 4,000 € net per month. You will need 1,200 € for the financing, 400 € for additional costs... leaving 2,400 € - you have to decide if that is enough for the four of you - I doubt there will be many new cars.
 

Veltins

2016-01-03 20:39:03
  • #4
Sorry, a bit unfortunately expressed. 2 new cars means peace in the coming years, not a new one every year. If I distribute all income monthly, it’s more like 5 net than 4 due to self-employment. The included buffer is supposed to cover property transfer tax, notary, registrations, etc. Of course not the entire ancillary construction costs, if we comfortably end up over 40,000 EUR all in.

Last drop: I only listed the major items. The smaller amounts (savings account 2,000 etc.) are all not listed. Therefore, this is also a rough plan. Initial talks with financiers ended with "no problem," but I am rather cautious and 400,000 is no small matter.
 

Saruss

2016-01-03 23:00:58
  • #5
The land price for Hagen is normal, you just have to be careful about things like [Grundungsmehrkosten]. Most plots of land are (even if it sometimes doesn't look like it at first) not completely straight.
 

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