Would you build yourself again or use a developer?

Hello everyone,

due to an early inheritance, we got a plot of land in Frankfurt relatively cheaply for 140k€. Our general contractor (GU) estimated the house construction at 450k€ in 2020. We made the financing with some buffer based on that.

Now the shell construction phase has started and we are already 40,000€ over what was estimated. With today's prices, it will probably be 80k - 90k€ additional costs when the outdoor facilities and network/water connections come in. We will then have to apply for additional financing. Unfortunately, we don’t know anyone in our circle who has built through a GU, only through a developer.

The house construction will then cost us about 700k€. Our equity was 200k€.

I know it's relatively cheap when building here in Frankfurt, where new builds start at 1 million €, but from an initial repayment rate of 1300€, we would reach 1800€ after additional financing.

With a net household income of 4000€, we are slowly reaching our limits as long as my wife is not a civil servant.

Now I keep wondering if our house construction is worth it when I think that with the repayment rate, I could comfortably live in a bigger apartment without being tied to anything? Additionally, all the stress with the building authority, building supervision, neighbors, and utilities, through which we had to make many compromises during planning.

We actually commissioned the GU to organize the whole thing, but in the end, we are still the first point of contact (soil survey, unexploded ordnance investigation, network/water connections, road closure, portable toilet).

I would most like to sell the house in 3 years and start over again and buy directly from a developer. I really have no more desire for the stress of being a builder.

I would no longer build new but buy an existing house, then renovate or refurbish it.

Sure that you are building with a general contractor (GU) and not with an architect or similar? With a GU, you basically already have the all-round carefree package except for the plot of land. Of course, price increases can still occur with one or the other upgrade due to special requests, but if the budget is tight, you simply leave those out. How can the shell construction be 40k€ more expensive with a GU?

I didn’t build, but renovated extensively on my own. It was also stressful, maybe even more stressful than building with a general contractor. To answer your main question: I would do it again.

I think your problem is the long time delay: planning in 2020, construction in 2021/22 combined with the extreme price increases that your salary can’t really absorb.

If you had bought directly from the developer, it would have been just as expensive. The prices called for would have deterred you in 2020, even more so in 2022. They have to factor in all costs just the same. And even with a developer, you have to take care of a lot and make compromises. Just like with a renovation or just like in a rental apartment or rental house.

When you’re finished, you’ll probably be able to relax a bit more again, don’t worry too much.

Are you sure you are building with a general contractor (GC) and not with an architect or similar?
With a GC, you usually have the all-around carefree package except for the land.
Of course, price increases can still occur with certain upgrades due to special requests, but if the budget is tight, you simply leave these out.

How can the shell construction already become €40k more expensive with a GC?

The GC only sets a fixed price for the house.
Additional construction costs such as earthworks, landscaping, and connections are no longer the GC’s responsibility. These costs were estimated far too low.

I can understand you, because ultimately the quality of life should be higher after the construction than before. Nevertheless, I don’t believe you can solve this issue on your own without or even with a general contractor. We used to have a house and at some point everything was finished (significantly more expensive, especially due to our own whims), but then it also felt good. Later in life I lived in a rental from time to time, but what I didn’t like there was that the owners/property management often had little interest in maintaining or improving quality, even when we would have financed it. I lacked the freedom to do at my place what I wanted. But that comes at the price that it also has to be your own property (preferably a single-family house); in turn, this brings you to the point where you have to decide between a general contractor, property developer, or self-management. Good preparation, an awareness of your own priorities/needs, and a bit of luck can then significantly influence the project. We had to decide quite quickly and after two houses we had already reserved were bought away from us at the beginning of Corona, we decided to build ourselves. We were supposedly careful but only within the possibilities which were quite limited due to time pressure, spatial constraints, and busy providers. Now we built with a small general contractor, which is often seen as a good decision, but in the end was a deep dive into the toilet. My self-managed build many years ago was, on the other hand, a piece of cake or my memory is fooling me there. What I mean to say: The security you want hardly exists, here also applies: no risk, no fun. I have an acquaintance in Sweden who is already quite fed up with sometimes having to take care of the house. He has (hopefully) learned for himself that he never wants to own a property again; at least that’s what he says... now :D I think you rather should look within yourself to find which package suits you best and which stress you don’t want to have again. Whether general contractor or self-management seems to me not decisive. If someone is an idiot, it doesn’t matter where he comes from, said a former boss of mine. It’s always an individual decision and for each project it can be better for you one way or another. I know terrible property developer stories, I can tell you an unpleasant one about a general contractor, just as I know bad stories about owner-managed buildings. There is no general right or wrong. It’s probably like in a partnership; the partner who suits you can make life nice and easy. For another person, that partner wouldn’t fit at all.