Building a house without equity?

Hello everyone, I am new to the forum and look forward to an honest discussion. My situation: I live in the Eichstätt district in a semi-detached house. Quite affordable for this area (850€ warm, 120m² with garden, two parking spaces). Was arranged through acquaintances. 30km to work. Now the previous owners have sold both semi-detached houses and the new owners will register owner-occupation next year. Consultation has already taken place. My research in recent months has shown that if I want a property (regardless of whether house or apartment) with 4+ rooms and garden use, I end up at at least 1000€ (warm). Mostly at 1100€ (warm). I have two children and a car. Our net income is 3500€ every month. We might also want a third child. My question: After the last few months, I have come to the thought that maybe buying a property would be worthwhile at these rents. Unfortunately, I have the problem that I have only been working for a few years, so I have no equity. Borrowing from relatives is also not possible. Financing without equity is possible in that sense. Of course, with somewhat worse conditions. I played around with the numbers and calculated how much it would cost me if I lived in rent until retirement. Of course roughly, depending on the trend of rent increases and rising ancillary costs in my area. I ended up at about 480,000€. That naturally raises the question for me whether it might be more sensible to build a house!? New build! No purchase of an old building. I would probably end up somewhere in the same range or maybe even below after 30/35 years with the higher interest rates. How do you see it? Has anyone here ever built without equity? Experience reports??? I would appreciate honest answers. Thanks to everyone in advance! Regards Alex

A household net income of 3.5k and a loan of 480k and possibly another child, meaning loss of income... take the rental option.

Everyone pays for a house in life - some their own, others their landlord's.

Nevertheless, one should keep the following in mind: Building a house involves high, initially not precisely definable costs, carries risks, is usually associated with a lot of work and stress, and building a house makes spatial life planning inflexible.

Ultimately, one must be passionate about and want to build a house; alternatively, buying a house is much easier!

Thank you for the answers.

@ ...3500€ net is currently during my wife's parental leave.
When she goes back to work, probably part-time, we will have around 4000€ net.

Regards

Net income is 3500 every month

plus or including child benefit?

850€ warm

Unfortunately, I have the problem that I have only been working for a few years, so I have no equity

So more than the 850€ warm is not possible as a burden for loan + additional house costs + maintenance reserve?

I landed at about 480,000€.
Of course, the question for me is whether it might be more sensible to build a house!? New build! No purchase of an old building.

I would probably end up somewhere in the same range after 30/35 years with the higher interest rates, maybe even below that.

Assuming 2.5% interest (which is very optimistic) and 850€ available (with 120sqm 300EUR additional costs + maintenance reserve) still 550€ left for the loan payment. Assuming a 30 year term (2.2% amortization), you can borrow 140,000€...

Yes, in principle you can buy without equity (but you need a certain amount of disposable income for that). Building without equity is quite a different matter.

But I don’t think the question of equity is decisive for you.

We might also want a 3rd child.

@ ...3500€ net is currently during my wife’s parental leave.
When she works, probably part-time, we have about 4000€ net.

That still sounds quite far off.

@ ...I think especially when buying an old property, you will be overwhelmed by unforeseen costs.

Therefore also the construction of a new property. I think you can calculate 98% of the costs here. Of course, the aim with a new build would be... practical and compact. We wouldn’t need 200m² of living space. Eventually, the kids will be gone anyway!

Regards