Single-family house in 5-6 years.

Hello everyone,

I want to build a single-family house (150-160m²) together with my girlfriend in 5-6 years. I have been carrying the idea of building since I was 23 and have been making sure everything is heading in the right direction since then. Today I am 29 years old, and the equity capital is almost exactly 100,000 EUR.
Question1:
Is it realistic to say the house costs 160m² x 1700€/m² = 272,000 €? Are incidental construction costs included in this calculation, or do they come on TOP?

Question2: There is no plot yet, I assume 100,000 EUR for that. Is it sensible to buy the plot today, or would you wait until the actual construction is about to start?
In my opinion, you can also get a bargain on the plot if you have time to look for a cheap one (and actually I still have 5-6 years for that now).
Honestly, I am a bit afraid that the 100K already saved in the bank will lose value, see the Euro crisis :/ and the interest rates I currently get are not so great. Buy the plot today or wait?

Question3: Equity share
If I were to build today, I would have 100,000 EUR of the needed 400,000 EUR (house + plot). That is an equity share of 25%, I think that would be enough to get the financing up and running.
However, if I spend the 100,000 EUR on a plot today, I would have 0 at first and only need 300,000 EUR for the house construction. How would the bank see the equity share now? Would I have 0% equity share for a loan of 300,000 EUR? Or would the plot be credited as equity?

Question4:
Is there a rule of thumb for calculating the amount of loan to be taken? Salary * years * factor X, or something like that?

Question5: Maybe a bit off-topic in this forum, but well...
With a developer or architect?
It is always said that building with your own architect is much more expensive than with a developer. Is that true? Some comments here in the forum rather say the opposite.
I am a person who dislikes being ripped off very much :) And I have the feeling that the profit margin of developers is quite high. Therefore, I tend to build with my own architect. It might cost about the same, but it is exactly how I want it.
Besides, with a good architect, you immediately have someone who represents your interests on the construction site. A developer probably hardly cares because the price is already fixed and for the developer, it is only about building the house for which the price is already set as cheaply as possible... (in other words, to make as much profit as possible)
Are my thoughts correct here?

Question 6:
Interest rates are extremely low today. Would you conclude a building savings contract maturing in 6 years today, say for 50,000 EUR - 100,000 EUR, to secure the low interest? Or should I just continue saving on a daily savings account like the past 6 years?

Best regards and thanks in advance for your answers...
Buggix

Hello Buggix,

a few ideas regarding your questions:

1) The values of €1,500 - €2,000 gross floor area strongly depend on the type and equipment of your dream property. Do you want an affordable prefabricated house or a modern passive house?

2) It depends on the region, take a look at the official land value map of the municipality; there you can see the purchase price development of the plots. If you buy now and don’t build, you have no interest income and additionally public charges.

3) Here too, the location or value of the plot decides. What does your house bank say? A general formula is: 1/3 cash, 1/3 building savings contract, 1/3 bank loan.

4) Depending on your income, minus your living expenses, calculate with 3% interest + 2% repayment….

5) A developer has a relatively high risk, hence the profit…. An architect is paid according to HOAI…. Get a few offers.

6) A building savings contract is never wrong… Overnight money is max. 2% and with an inflation of 2% you have no interest or even lose money.

Have you ever thought about buying a used house?

Best regards

But you have many questions, and I am still a "beginner" myself. However, I can still give you a few tips. First: Wait and see what Bauexperte says, she has a great overview regarding [Nebenkosten].

Just for that alone, you will have to budget around 40,000. The kitchen is an additional cost, as is the garage. The price you pay for the plot depends on where you want to build. I know building plots that currently cost 800. Others that have increased by 50 with each new development area. But there is also land that costs only 15 euros/sqm. To say how it will look in x years would be presumptuous... Likewise, you cannot predict the loan interest rates. In addition to the land purchase, about 7% for tax and notary fees will be added.

Then it depends on whether you contribute your own labor – however, you should not overestimate that; you can't save that much, and the risk is also high. If you get injured or sick, it can end up costing more!

Prefab house or architect... a matter of belief. An architect can probably build more individually – but developers can also change many things!! When you buy from a developer, you generally buy the house and know the final price; with an architect, a few "forgotten" costs may crop up here and there. Who is really cheaper cannot really be said. Of course, in my opinion, an architect takes longer until the house is finished (additional costs due to double burden). While you can furnish more individually with the developer, you have to do exactly that with the architect. On the one hand, that is very nice, on the other hand, it can be very time-consuming. It is also interesting that not every prefab house provider who offers you a low price is actually cheaper in the end than an expensive provider. Besides, the additional costs for the different offers (whether architect or developer) vary greatly. Well, they want to win you as a customer for the house – whether the terrace, garden, and other items are already finished at the end... who cares, except you? Although, to be fair, not everyone works like that – fortunately! If you choose an architect, I would want to include at least 20,000 as a reserve.

By the way, the plot counts as equity. Regarding the loan, it depends on your personal situation, what can you save? If you start building in about 5 years, you can still pay off for about 30 years until retirement (if nothing else happens!!). But no one can tell you how it will look in 5 years. Therefore, the location is more than crucial in pricing. By the way, if you don’t build but buy and renovate, the approx. 7% for tax and notary are calculated on the entire property. Not insignificant to know....

So, that’s it from me – as a beginner and only with currently theoretical experience. Surely the experts here will soon respond with harder facts. I hope I was not too far off.

Question 1:
Is it realistic to say the house costs 160m² x 1700€/m² = 272,000 €. Are ancillary construction costs included in the calculation, or are they still on TOP?

That is too individual to say in general. The plot of land, personal needs, and much more play a role here.

Question 2: There is no plot of land, I assume 100K EUR for that. Is it sensible to buy the land already today, or would you wait until the construction actually starts?
I think you can also find bargains on plots if you have time to look for a cheap one (and actually I still have 5-6 years now)
Honestly, I'm a bit afraid that the 100K already saved up in the bank will lose value, see Euro crisis :/ and the interest rates I get now are not that great. Buy the plot today or wait?

Buying a plot today and building in 5-6 years also depends on several factors.
One is ability, the other is willingness.
In quite a few building areas, it is the case that you have to start building within 2 years after purchasing the plot. Eventually, the area is supposed to be fully developed and not have one house here, then some gaps because the owners want/can only build in 5 years.

Question 3: Equity share
If I were to build today, I would have 100K EUR of the required 400K EUR (house + land). That is an equity share of 25%. I think that would be enough to get the financing on track.
If I spend the 100K EUR on a plot today, I have 0 initially and need only 300K EUR for the house construction. How would the bank see the equity share now? Would I have 0% equity share for a loan of 300K EUR? Or would the land be credited as equity?

25% is okay if the remaining financing can be sensibly managed.
The value of the plot (standard land value) is usually credited as equity by the bank/savings bank.

Question 4:
Is there a rule of thumb to calculate the amount of loan to be taken? Salary * years * factor X, or something like that?

I still like to calculate with 500€ monthly burden per 100,000€ loan.
The interest rates are low, but the loan should also be amortized.

Question 5: Maybe a bit wrong in this forum, but well...
With a developer or an architect?
It is always said that building with your own architect is much more expensive than with a developer. Is that true? Some comments here in the forum say the opposite.
I am a person who really doesn't like being cheated :) And I have the feeling that the profit margin with developers is quite high. Therefore I tend more to building with my own architect. It might then cost about the same, but it really is as I want it.
Also, with a good architect you immediately have someone who represents your interests on the construction site. A developer probably cares little about that, since the price is already fixed and for the developer it’s only about building the house for which the price is fixed as cheaply as possible... (meaning squeezing out as much profit as possible)
Are my thoughts correct here?

A good prefabricated house provider is not significantly cheaper than an architect. It also depends on which service phases of the architect are used. Ideally all of them. Savings could be made – as unfortunately most do with prefab houses – in the phase of construction supervision. This is the most expensive one (often well over 10,000€). Many forego this with prefab houses, or seem to be satisfied if someone just drops by every 2 weeks.

Question 6:
Interest rates are extremely low today. Would you conclude a building savings contract with maturity in 6 years today, let’s say for 50K EUR - 100K EUR to secure the low interest rate? Or should I simply continue saving on a daily allowance account like in the past 6 years?

My personal opinion: amortize, amortize, amortize...

So we first dealt with the plot of land. Everything else depends on that. Development plan, location, neighbors, etc. You can later change almost everything about your single-family house again and again. But never the location of your plot. For us, it was also clear that we wanted to stay in our home municipality... Buying a plot there was not that easy. The prices have also constantly risen sharply. (due to the extreme economic strength of the region). And since we are renting, I didn’t want to postpone the topic of "building a house" any longer.... Euro crisis etc. played no role for us. The low interest rates are of course also nice, but we didn’t let ourselves get crazy about them either. But of course we gladly took advantage of them.

Is there a reason why you want to wait another 5-6 years to build? Do you rent or live rent-free?

Oh yes, your plot is considered equity by the bank. Our house also has 165 sqm living space with basement and single garage. Kfw 70 house with underfloor heating. Slightly higher-quality fittings (large sliding doors in the living room, venetian blinds, underfloor heating, pellets, parquet everywhere, etc.) We pay about 320 TEU for the house. Without kitchen, lamps, furnishings, and especially without outdoor facilities. No driveway to the garage etc. We calculate about 30 TEU again for outdoor facilities. (natural stone wall etc.) In short: Plot (100 TEU) + House (320 TEU) + Kitchen (20 TEU) + Outdoor facilities (30 TEU) = 470 TEU. Costs for building permit, notary, property transfer tax, house connection, surveying, bank, construction electricity/water, etc. about 10 TEU again. I made it simple for myself: costs about 500 TEU.

For a nice building gap as a property, one should already keep an eye out now and possibly buy if one finds themselves suitable for living there in the future :)
If necessary, you can always sell again (usually at a profit, because good building land does not increase, rather decreases)
Whether factor x applies for y sqm of living space in 5-6 years, no one knows. Higher energy saving regulations and higher VAT can increase construction costs compared to today.
But I am also "just" a well-read homeowner who constantly updates her knowledge at the moment :)
I am not a fan of building savings, I prefer it simple and clear.
Everything else has already been said.
By the way: Your savings potential and ambition to save 100000 in 6 years is remarkable!