Buy the land first and then finance it?

Would you only finance the land?

If the land is in an absolute prime location, I would buy and finance it; if not, I would refrain from doing so.

And if you want to buy it, then choose a very short term or variable financing so that you are not tied to a bank later when building the house.

Whether we can build on it then is another question.

Just to be sure: The question of whether you can build on it is only financial in nature and not whether the land is basically buildable, is that correct? So it is not an open area or something similar, but intended for residential area/residential development and it is connected to utilities? I find your expenses (3.5k) compared to the calculated income next year (3.8k) quite high at first, but without a detailed breakdown of where the money goes and what might be buffer/fixed savings, it’s hard to say. You might want to keep a household budget for yourselves (or just look at last year’s spending to see where the money went). But basically, you were able to save up decent equity... Personally: I am always a bit in favor of being bold. I probably wouldn’t build now in your place either. But buying the land, I basically don’t think is unimaginable. But only if you can really imagine building on it prospectively and not just "because it will probably be worth more". (It might be, but none of this is really clear at the moment—and the incidental purchase costs in Germany are also relatively high, so you have to make that back first).

I don't see buying the property and building on it promptly. However, I also don't see a big risk in purchasing the property since your equity is almost sufficient for it. You can always still sell it. With the purchase, at least a first step towards a house would be taken. If you have the desire for a house with a garden, I wouldn't buy a condominium for rental as an investment.

If it is a buildable plot of land: Is there an obligation to build/construction requirement? If yes, you cannot wait forever to build a house and will need more income by then at the latest.

See if you qualify for subsidized loans and then calculate the payment. Without a massive subsidy that initially reduces the repayment to almost zero, you have no chance. You won’t be able to manage a loan on the open market, at least not. With a 500k loan, even with only 1% repayment, you’re paying 25k a year. You don’t have that.

I wouldn’t buy the land and then wait. You can hardly save, and construction costs will increase on you. It’s better to go all in now than to be stuck with a useless piece of land. But as I said: without subsidies, nothing can be done. With subsidies it’s still questionable, but for you it’s the chance if it barely goes through, to grow into the loan, for example if the first 2 years are repayment-free. But if the job is insecure on top of that... You really have to know if you want to take that risk.

How many children do you want, and what profession does your wife have?

The most important question is about a building obligation. This usually always applies to municipal land. If not, they have trouble getting rid of the property and it is too expensive. If it is private, why was it not sold during the 1% interest rate times? There was once a guideline of 100-110 times the monthly income as a loan. In your case, that would mean a debt limit of 400,000.--. But the myth that you cannot live in old houses for 20-30 years and that you have to renovate for at least 200,000€ probably can never be eradicated.