Building a house or buying a condominium and then building a house later?

Thank you very much for your answers.

The Stiftung Warentest provides a calculator (Excel) with which buying and renting can be compared. You should be able to answer question 2 with it. Unfortunately, linking is not allowed here, but those who search will find.

Option 1: You only have €30,000 available. When buying a house and land from the developer or similar, in Lower Saxony you have to expect 7% acquisition incidental costs on the total price. With a purchase price of €350,000, that would be €24,500. That is roughly a 100% financing with the thumb rule. I would advise against that. You should save an additional €20,000, then the situation looks a bit better.

I found the calculator and ran it once with the following values:

Purchase price: €210k
Incidental costs: €15k
Equity: 20 out of 30k are contributed
Interest rate 2.3% / Repayment: 3.5%
Maintenance and administration with €2.4k.
I indicated cost increases per year at 1%.
Rent increase 0%, since the rental agreement states that there will be no increase for the next 10 years! Value increase even in the worst case with 0%.

The result is that one has an advantage after 5 years.

With a value increase of 1% of the property already in the third year.

Hmm difficult... in 5-10 years interest rates could increase or you will automatically need more because you have a child.

I would always want to build without children first and only then start family planning.

Correct, that’s why the consideration of how to best approach this and ideally even build up the rent partly as equity (purchase of the apartment and later sale).

Option 2 only makes sense if the apartment is also somewhat occupied and not sold again after 2 years. You are 26 & 29, so children are probably not too far away.

I would have calculated with 5 years now, but it’s pure speculation with many IFs. (Does the property price remain the same or even rise?...)
The pure incidental purchase costs of 7% (€14,700) would be covered by the elimination of the cold rent of €850 in about 18 months. However, maintenance costs and further expenses are not included then...

I would only buy the apartment if it were big enough for your family planning. Otherwise, it makes little sense.

There is space for one child. Well... 85 sqm on 3 rooms. Own garden share.

Option 1 is a shell house. Correct me if I am wrong, but that is then only the shell with roof and possibly windows. You can then do the rest yourself with the supplied material.

Correct. It is a shell house. What is included in material is listed above in my post. The costs of €350k for the finished house is an estimate. Please feel free to tell me if I am roughly right or completely wrong.

Hi, buying a condominium is uneconomical for a short period due to the real estate transfer tax of 3.45%, plus of course notary and land registry fees. If you sell the apartment for a profit after a few years, a speculation tax is due. You also have to pay a monthly reserve for the apartment, which transfers to the new owner upon sale. Then there is the risk of special assessments for renovation and repair. You must not forget the monthly management fee, etc. Terminating a rental apartment is easier than selling a condominium, because if you are under pressure due to an upcoming house construction, problems begin and if you are unlucky, you have to sell below price. In my many years of experience with real estate, this issue is not uncommon. Sometimes it is better to wait a little longer than to get entangled. Important when buying a house: get many offers and if you want to sign a contract, have it checked beforehand by a building expert. You should invest the few euros to gain the greatest possible security. In forums, there are many laypeople who have heard something somewhere and recommend it without sufficient expertise. Even I, as a professional in construction matters, regularly consult other experts to largely exclude risks. By the way, a high-quality house does not have to be expensive. Be cautious with very small companies and always ask for references. With a prefabricated house, you are well off regarding short construction time and excellent insulation; today’s prefabricated exteriors cannot be compared to those from 30 years ago. A solid house has on average 23 defects after completion, a prefabricated house only 4 defects. The large prefabricated house companies are all on almost the same quality standard. When it comes to own work, the time factor must not be underestimated and if you have someone helping you, it is important that they can perform the respective trade properly. As a tip, question everything and always compare. Good luck with your house planning and never let yourself be pressured.

It turns out that after 5 years you have an advantage.

If you can also manage with two children in this apartment, then I would buy (as long as your calculation is correct)! Especially since you know the property.

By the way, you can still move into your own home shortly before school enrollment, which I personally consider a good time. By then, many things have settled and you know your needs better. Today, you don’t really know whether you will have children at all or how many . Also, you will have more equity and higher income ("career").

With a prefabricated house you have a short construction time

Due to the long "delivery time", the prefabricated house builder nowadays does not save any time. Besides, we are talking about a shell-and-core house ...

A solid house has on average 23 defects after completion, a prefabricated house only 4 defects.

Whether that is true is questionable, but the average doesn’t help anyone here and ... shell-and-core house .

Construction time means starting with the house setup about 8-12 weeks until completion or handover for self-performance. As for the defects, there are indeed plenty in solid houses, the statistics from my offices clearly prove that, and buying a condominium for such a short period is economically nonsense. I have known the real estate market for over 40 years, I have met many who went bankrupt with such experiments, but it was good for me to get access to cheap properties, that’s how the market works, no bank cares regardless of how many children someone has. The prices of condominiums are sometimes totally crazy and not reliably predictable, I can only advise the person seeking advice here in the forum against it and to rather take some time and continue renting, with zero risk. Most apartments go for significantly below market value at auctions, and what remains are debts, debts, and more debts.

Hi, buying a condominium is uneconomical for a short period due to the real estate transfer tax of 3.45%, not to mention the notary and land registry fees. If you sell the apartment for a profit after a few years, a speculation tax is due. You also have to pay a monthly reserve for the apartment, which transfers to the new owner upon sale. Then there is the risk of special assessments for renovations and repairs. Also, you must not forget the monthly management fee, etc.

5% real estate transfer tax in Lower Saxony, so 7% additional purchase costs. Doesn’t the speculation tax only apply if the apartment is owned for less than 10 years and rented out? According to my information, no speculation tax should be due if it is owner-occupied at the time of purchase and for at least 2 years before sale. Since we want to live in the apartment ourselves, this would at least rule that out...

Yes, but I am aware (I already wrote this above) that selling with the intention to do so in about 5 - 7 years is very speculative and associated with many IFs.

If you can manage living in this apartment with two children, then I would buy (as long as your calculation is correct)! Especially since you know the property.

By the way, you can still move into your own home just before school enrollment, which I personally think is a good time. By then, many things have settled and you know your needs better. Today you don’t really know whether you will have children at all or how many . Also, by then you have more equity and higher income ("career").

Thanks also for your opinion. Yes, one could manage with two children for the first few years. It would be a compromise though. By school enrollment at the latest, however, there would need to be a house of one’s own. That brings us back to about 5 - 7 years. I know everything can turn out differently (as you wrote), but this is the "plan" for now. That means you should only take an interest rate fixed for this period to avoid the “penalty.” I assume the calculation is correct, or I trust the calculator from Stiftung Warentest?!

Although of course you cannot make the decision for me, I find it good to discuss it here with you to get various opinions or suggestions. That helps! Thanks for that. Now I’ll see what comes out of the sales meeting on Saturday. Then one can probably specify the house price a bit and maybe consider this again.

350,000 is realistic, but the existing equity appears to me to be currently too low for that. I still clearly remember the words of our bank advisor, that on the one hand the financing of the kitchen must be clarified and on the other hand a reserve of 5,000 euros per person must remain. I don't know if that was already taken into account with the 30k € equity, but with your salaries it should be possible for you to save the necessary remainder in the next 2 years with disciplined spending behavior. Then you would be just 31 and 28.

I would refrain from buying the condominium, the incidental costs due cannot be recovered upon sale and selling it itself is not as easy as currently with a single-family house. I would not do something like that.