Assessment New Construction 2025/2026 - BW Rural Area

Hello dear forum members,

in the past weeks, we have spoken with a construction financer, subsequently held several conversations, and obtained offers from different providers here in our region. Now we have reached the point where we need to decide whether we want to/can realize the construction project or not. We would appreciate assessments as to whether this is realistic. Thank you for your expertise and time!

General information about us:

[*]Young couple from Baden-Württemberg (rural area)
[*]32 and 29 years old; no children; desire to have children
[*]He 32 - industrial engineer (works in a corporation), she 29 civil servant
[*]Both have permanent employment; side business with additional income; we both work full-time 100%
[*]Land plot available, but the barn standing on it still needs to be demolished by us

Income and asset situation:

[*]Income €7,550 net per month; he €3,800 net; she €3,000 net; €750 net from side business;
[*]We plan to rent out our current apartment (we currently live with parents in a converted floor) as a holiday apartment when we move out (attractive location in the Black Forest) - this could generate additional income (which we have not included in our plans).
[*]Equity (€75,000 through the land plot - which is already available, €80,000 in gold, stocks, ETFs, etc.)
[*]We want to invest about €80,000 in equity into the project (including land).

Expense situation:
We have joint fixed monthly expenses totaling about €3,000 (we have broken this down in detail in an Excel table; everything is included such as insurance, vacation, car, groceries, etc.).

Savings:

[*]Currently about €2,000 per month; however, if we decide to go ahead with the construction project, we still want to invest at least €0.5 thousand per month

Income and expense totals:

Status quo (no children)

[*]Total income: €7,550
[*]Total expenses: €3,000
[*]Balance: €4,550

Prospective (with 1 child) - for at least 3 years

[*]Total income: €6,000
[*]Total expenses: €3,500
[*]Balance: €2,500

General information about the property:

[*]How large is the plot? 750 m²
[*]New building, old building (year built), house type? New building
[*]Garages? Double garage or garage + carport
[*]How large is the house? 158 m²

Construction or purchase costs:

[*]see screenshot (our calculation) maybe we have forgotten something? In principle, we have planned a buffer of 10% and in positions where we have no offer yet, we have preferably set a higher amount.

Cost breakdown:

[*]Total costs: approx. €750,000
[*]Deductible equity: approx. €80,000
[*]Financing amount: approx. €670,000

Questions:

[*]Are the items for the construction project realistic, or do you think we have calculated too high/too low somewhere?
[*]Is the construction project financially realistic? We would like to pay a maximum of €2,400 per month in installments
[*]Comments, questions, etc.?

Otherwise, many thanks for your assessment, we are curious.

I am by no means a financial expert but that.....

Savings performance:

[*]Currently about 2,000 EUR per month; however, if we decide on the construction project, we would still like to invest at least 0.5 TEUR per month every month

does not fit with:

Income and expense totals:

Status quo (no children)

[*]Total income: €7,550 [*]Total expenses: €3,000 [*]Balance: €4,550

Where has the difference between 2,000 EUR savings and the planned €4,550 gone?

A few of your cost items seem questionable:
- Insect screens €10,000.-
- No controlled residential ventilation?
etc.
- but you will read more about this here.

Income 7,550 € net per month

Savings achievements:

[*]Currently about 2,000 € per month

Where did the rest go if you have 3,000 € in costs? It’s not important for the financing now, but somehow it is, because you apparently have a "gap" or a cost trap of about 2,500 € that you seem to be overlooking.

Let’s calculate for a house with a child and less income:

[*]Total income: 6,000 €
[*]Total expenses: 3,500 €
[*]Balance: 2,500 €

.. and if I use a financing calculator for the insanely expensive house project, then with 750,000 minus equity of 80,000 €, I get nearly 2,700 € monthly rate with 1% repayment, fixed for 20 years, term of 40 years (which triggers the 1% repayment).
I don’t see any additional savings rate here. Saving twice is anyway a misconception of people who think they can continue saving and investing just as well with a big financing as before the dream house life.

You earn quite well. That must be emphasized. Also, the fact that you already have a paid-off plot is a great starting point.

But the construction or house costs are really a big deal. I would cut a lot there first. Because many questionable items are not included but rather to be provided by the builder. All permission and application costs related to the plot.
In addition, this table – honestly – is not suitable for comparison because the scope of work description is unknown. What the expensive provider has too much of in the scope of work description, which you cannot afford, does provider 2 have too little? Or is it equivalent? You simply don’t know.
The table also confuses me because of the arrangement of the items. What is mandatory? What is optional?
Demolition costs are added to the plot,
earthworks, utilities, permissions to ancillary construction costs,
house costs, there it would be important what you get: KfW x house, size, etc.
Exterior facilities are often cut items, at least you initially get a gravelled parking space for a fraction.
And you can save on kitchen as well as mailbox now.
The further down, the lower the prioritization.

Construction project financially realistic? We would like to pay a maximum of €2,400 per month as an installment

With a 5% annuity, however, that will be €2,800. That is realistic. Manageable, but - what happens with the child? - what if additional costs arise?

I am by no means a financial expert but that..... does not fit together: Where has the difference gone between 2k savings and the planned €4550.- A few of your cost items seem questionable: - insect screens €10,000.- - no controlled residential ventilation? etc. - but you will read more about this here.

Thank you for your feedback and the legitimate follow-up question. I had formulated that ambiguously. We invest 2k EUR, the rest stays in the account (basically also saving - but I had not mentally included this under that for myself). Regarding the insect screens? Why should €10k for that be unrealistic?

Regarding the fly screens? Why should 10,000 EUR for them be unrealistic?

Of course, you can upgrade a house expensively with all sorts of fancy features, but your salary, even if it is good, is not meant for a house with expensive special equipment, which can also be done more efficiently and cheaply. Viewed from this perspective, the "unrealistic" refers to the ratio of house building wishes to salary. It is questionable whether one needs that!