Does my budget fit the construction project?

Hello everyone,

I want to get an assessment of whether I can manage with the budget as I imagine it and whether it fits our financial capabilities. We have been looking for a long time and were several times close to committing. Now there is a 95% certain opportunity to buy a plot of land. We live in Bavaria, in the triangle Munich - Augsburg - Ingolstadt, but in a small town. The price per square meter is not fully settled yet; I am currently calculating with €300, which would be rather cheap for the area. With 500 sqm that makes 150K + notary and GES = approx. 157K. The house still needs to be planned, this is just about the rough feasibility. 150 sqm * 2000€ = 300K + basement = 350K. Additional construction costs about 35K. Outdoor facilities: there is already a fence, remaining e.g. driveway, terrace: 15K. Double garage: 20K. Kitchen, lamps, some furniture: 20K. If I add that up, I come to a total investment of approx. €600,000. Could that be about right?

If the seller of the plot still sets the price at 400€ per sqm, the sum would increase by about 50K, but I am not counting on that for now.

Our finances will follow in the next post for clarity.

My wife and I are both 35, have very secure jobs, and we have a 9-month-old son. I currently earn €3260 per month, my wife receives €1800 parental allowance + €190 child benefit. Additionally, there are €290 per month rental income from a small apartment in a student dormitory that belongs to my wife. When our son is 1 year old, we will switch; I will stay at home for half a year and receive about €900 parental allowance 2, after that I will work 75% for another half year. During this time, my wife earns about €3200 per month again. Annual bonuses etc. are not included here. The master plan would then be to have a second child, so that I work full time again (about €3400/month) and my wife receives the maximum amount of €1800 parental allowance + €380 child benefit again. Of course, this is not really fixed or predictable. Through this arrangement, we only have a few months in which one salary falls away completely and we get the full parental allowance again with the second child. We have about €220,000 equity when you count cash available and building savings together. If we sell the apartment, that would add about €90,000 more. However, we can only sell it in about 2 years if we want to avoid speculation tax. Ideally, we would like to keep it for now and possibly sell it when the fixed interest period of the first financing expires. To what extent we bring in all our capital immediately or keep some in reserve would have to be planned. Actually, we could imagine a monthly installment of about €1400 to €1700. Is all of this realistically thought through? Does anyone have an opinion on the whole matter? Best regards, Tobias

You have a simple case.
A lot of equity, an additional apartment, everything is great.
Income is also great, only the parental leave needs to be bridged, but that doesn't matter given the amount of reserves. Even if afterwards only a part-time job for you or your wife is planned, the income is sufficient.

A loan amount of approximately €400,000 with a desired maximum installment of €1,700 I see as very realistic.

Everything very solid. What do the banks say?

also the full parental allowance again for the second child.

Plus sibling bonus.

The basement with 50 thousand will not be sufficient. The offers I have seen in recent months were around 900 Eur /m2 for a utility basement. Otherwise, the calculation fits for a level plot.

I'll keep it brief as well. For the budget, there is a house, but whether it is your house, I would discuss with a construction company or an architect. You wrote very little about your ideas.

Financially, it is certainly doable, you just have to get through the parental leave.

I would hold back around €50k as a buffer or for things like a kitchen, etc. The loan would then be around ~€430,000, which fits the rate you were considering.

As mentioned at the beginning, I would try to get reasonably reliable numbers for the house and then calculate with those.

EDIT: I think the basement wasn't in the first thread at the beginning, right? I would question the basement and rather plan with ~160m².