Thank you first of all for the many helpful answers!
To address a few points:
In general, you have very solid ideas and you can tell that you’ve already dealt with numbers a bit. The insight "the first property doesn’t have to be the last one" is already worth a lot. The income is good; the interest rates are just difficult at the moment because prices have not dropped proportionally. No one has a crystal ball, but personally, I’m rather pessimistic at the moment. As long as building does not become significantly cheaper, existing properties won’t become cheaper either. The economy has been in better shape before; energy is expensive, and I see little room for improvement before the war ends. Further increases in interest rates have already been hinted at; experts at least seem to think that is more likely than the opposite. I’ve read on Tagesschau that 5% construction interest rates are expected during the course of 2023. But half of that year is already over and so far nothing of that kind is visible.
But that’s all speculation – that means there’s only so much the forum can help you with.
What made the project more "concrete" for you recently? Do you have something in sight?
If you really have a timeframe/by when you know, I would possibly transfer the capital for the house from ETFs to a savings account if it looks good right now.
That’s already reassuring that we’re not completely going off track. Because exactly, we’ve already done a lot of back and forth with numbers, but a few more perspectives are always quite helpful :)
The crystal ball would really be perfect, but precisely because of the reasons you mentioned, we have even started thinking about building savings (Bausparen) again. Until six months ago I was totally against it because in the situation back then it simply wouldn’t have paid off at all, but now it seems to be getting lucrative again. Maybe one question here: are there building savings contracts that could become allocatable within a short time (under 5 years)?
It became more "concrete" because we’ve had more frequent stress with our landlord lately and we’ve both been working for a year now. So nothing urgent, but now it is possible for both of us to actively work on it and the desire has been growing stronger.
The timeframe is a tricky thing; in the next 1-3 years would be nice, but who knows when you actually find something suitable… but sure, part of it could definitely be shifted to the TGK (savings account).
You certainly still have potential with your salary. We’re also both in IT and I don’t see our industry slowing down anytime soon, rather the opposite. I wouldn’t want to restrict the standard of living for the property too much. Maybe in the first few years because you really have a lot of expenses during construction. But for a while, the joy of the new house can make up for a missed vacation. In the medium term, I would plan the financing so that you can still live happily with it. We were lucky to have everything fixed at the beginning of 2022. We were right in the middle of the rising interest rate spiral but still caught a mid-level point. Therefore, our rate is well under 2k. That would have been our pain threshold; anything above that would have made us uncomfortable.
I wouldn’t do a 1% repayment rate. Then you mostly pay interest but hardly reduce the loan.
But keep in mind, if you buy an affordable property now where you make compromises, with the plan to sell it again in a few years and buy a better property: if the conditions for buying later are better, then the conditions for selling your first property are worse. You buy even a currently affordable property at the current price level. If prices or interest rates drop, you probably won’t get what you once paid for the first property, or at least won’t make a big profit. Still, with a somewhat solid repayment rate, you should have built up capital, which I’d find better than renting. ;)
On the subject of IT / salary / off-topic just very briefly: we really don’t worry at all that things will go downhill for us in the next 5-10 years. There are so so many IT positions that need to be filled first. And additionally, we don’t rest on our positions but continually educate ourselves and actively work on advancing professionally.
I would also prefer to stick to the pain threshold of 2k … but that really becomes difficult with repayment. And you’re of course right, 1% is very low; what would your personal minimum repayment be with, say, 4% interest? 1.5% or 2%?
Regarding selling the "intermediate property": if it’s not financially worthwhile to sell it again, then renting it out would basically also be an option for us. Although the rate should then actually be designed in such a way that it can be covered by potential rent. Which probably brings us back to around 1% repayment or possible repayment changes. Maybe that’s an option .. :)
Whether it’s worthwhile regarding capital accumulation, I’d personally prefer to calculate current cold rent vs. interest burden. So if we pay more interest than the current cold rent (1.4k), then there would have to be positive value appreciation for it to be worthwhile. Especially since additional purchase costs come with it. But again, if only one had a crystal ball here.
Regarding expenses: you have a company car including taxation and you have to pay electricity for it yourself? Regarding the 300 € pension insurance: at that age you don’t need pension insurance. Interest rates are currently already over 4% with 100% financing. If you scale up from rent, that means a property value of over 500,000 €. The rented apartment belongs in the overall consideration; everything else is mental bookkeeping.
I have the option to order the company car with or without a fuel card. With it, it would have been 400€, without it is 200€ plus the 100€ for private electricity.
Regarding pension insurance: especially at a young age I find it important because through compound interest and relatively low rates you can achieve quite a lot.
And for completeness: the rented property was financed in 2020 at 1.3% interest with 110% financing. Currently, almost the incidental purchase costs are paid off. Purchase price and outstanding loan about 100k€, current value (?).
It seems the OP is already doing that ;)
Exactly, one apartment is already owned. We are always looking again, but these apartments never pay off at 4% interest and 3% rental yield, and until now we did not want to top up ourselves because then you are completely dependent on value appreciation … would you still consider it sensible currently?