Looking for a good mix.

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MegaRigger
Posts: 16
Joined: Fri Feb 09, 2018 5:43 am

Looking for a good mix.

Post by MegaRigger »

Hey there, MegaRigger from Belgium here.

My situation: 30 years old, married, two kids (1 and 3).

I'm currently having a house built on a piece of land I got from my parents.

We will pay 50k ourselves (we already have this in the bank) and borrow 250k. Since the land's worth is about 250k as well we should get a good rate on the mortgage. Depending on the mortgage this would be a monthly payment of about €1000-1200. Our current takehome income is:
-€3400 net salary
-€150-€250 lunch vouchers (depends on the days worked)
-€250 child support

This makes €3800 on average.

Other investments: about 12k in index funds, 5k in retirement funds

At the moment we don't have housing costs so we try to live of €1000/month. Biggest cost is daycare (about€200/month).

Biggest ERE realizations: we live without a car but use a car sharing service (last year paid €850 for car usage including the €200 cost of an accident I had) and are limiting eating out as much as we can.

Skills I'm investing in: bike repair.

FrugalPatat
Posts: 64
Joined: Sun Dec 03, 2017 6:22 am
Location: Europe

Re: Looking for a good mix.

Post by FrugalPatat »

Welcome to you as well ;)

It am too curious not to ask this obvious but maybe offensive question: You talk about bike repair and going carless, but why are you constructing a 300k house on a 250k piece of land? (given that 250k alone would buy a house big enough for a family of 4 on a smaller piece of land)

MegaRigger
Posts: 16
Joined: Fri Feb 09, 2018 5:43 am

Re: Looking for a good mix.

Post by MegaRigger »

Fair question :D.

The value of the land is actually irrelevant. I got this land, owned by family, to build a house on. I cannot sell this land or do anything else with it. This piece of land is in a very good location, a location where I would really like to live and in a region where housing is very expensive (close to public transport etc.).

Then the house itself. I want a very good quality house. A house that I can live in the next 20 years without having to do any serious investments. Therefore I chose to work with an independent architect and different contractors. This is more expensive than working with picking the house from a catalogue and having it built with complete finishing by the same company. But it gives you better quality, this is what I've learned from reading different sources. The house will also be close to energy-neutral. I don't know if energy costs will rise in the future, but I believe chances are that they will and probably very strongly. So I consider this partially as an investment to save money in the future. Then, I must admit, that we chose a design that is not the most cost-efficient. I estimate that with the most efficient design (basically building a cube) we could have saved about 20k in costs.

All these things taken into account, this is the price you pay in Belgium for a newly built house. If I bought a house for 300k (and not using the land and just leaving it idle) I would either live in a (for me) uninteresting location or in a house with very significant costs in the near future.

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