Build and rent a 3-family house?

Since the entire house construction should be paid off through rental income after about 15 years.

But you have read that your 550k will not be enough, right? In addition, you have to cover the ancillary costs from the rental income and also build reserves.

I consider 15 years to be a bit very optimistic. As already mentioned, if it were that easy, probably many more would do it.

If you look at the bare numbers like that (as a layman), the whole thing looks very tempting.

How it really looks, you will see when you have a correctly prepared and unvarnished return calculation in your hands. If you roughly combine Bauexperte's rough cost calculation and your property valuation, the project/investment amounts to about €900K-€1 million including the land. Of that, you would then be able to contribute a little more than 20% equity in the form of land and the €50K in cash, with that you would have put in everything you have.

Of course, you can do that, but I wouldn't. If you decide to keep all three apartments completely, you should at least have the sale of one apartment or even the entire property in mind for emergencies. In case of doubt, you have to look at it quite bluntly from a business perspective and unemotionally. If you cannot let go at the right (wrong) moment because you cannot handle it emotionally, then that can definitely become a problem. Unfortunately, this is observed often enough, and it might actually threaten you, because from the €2.5K income you will definitely not be able to build up any or only a small buffer.

Best regards Dirk Grafe

When I read 1 million investment here vs. 2.5k p.M. liquidity, I feel confirmed in my above statement: Too big, huge concentration risk, insufficient liquidity. In addition, there is an emotional reason why the property should not be sold. In my opinion, personal prerequisites to act economically and rationally are also missing.

When I read 1 million investment here vs. 2.5k p.m. liquidity, I feel confirmed in my above statement: Too big, huge concentration risk, poor liquidity.

How do you come to 2.5k€ monthly liquidity? Apart from the fact that he does not have a savings rate of 2.5k€, his monthly liquidity is therefore rather between 500-1000€, you have to add the rental income from the three apartments or know the gross/net yield of the property.

But no one here knows that, because reliable figures are missing, so no one can assess the risk finally.

Best regards
Dirk Grafe

Yes, correct, I was thinking more about the start-up phase. Liquidity through rental income only exists once the building is completed and occupied. Who advances operating costs when there is no tenant yet? Specifically, what is the first property tax assessment paid from? With bad luck, the power is already off ... or advance payments for the central heating.

Yes, right, I was thinking more about the startup phase. Liquidity from rental income only exists once the building is finished and occupied. Who advances operating costs when there is no tenant yet? More concretely, what is the first property tax bill paid from? With bad luck, the power is already off ... or advance payments for the central heating.

What nonsense. The OP has €50,000 in cash equity and no longer has to buy any land! Property tax payments are already due now, even though the land is not yet developed – someone has to pay them. You’re not seriously using the few pennies for heating advances to justify letting a multi-million project die?

Best regards
Dirk Grafe