Dream of building a house 2025/26 realistic? Currently hardly any equity, but we are fighting!

  • Erstellt am 2023-03-06 11:07:21

EB_Hausbau2025

2023-03-06 11:07:21
  • #1
Hello everyone!

We (F27 + M31) have been dreaming for some time of owning our own home, even though life has thrown numerous obstacles in our way so far. A brief introduction about us:

I am currently 31 years old, have completed a Bachelor’s and Master's degree in Marketing/PM, and have been employed since 2018 at the same employer. I currently work in project management, net salary currently 3,000 €, from 2024 3,200 € (contractually agreed). In the long term (2025/2026), the plan is for me to "replace" my current supervisor and take over as team lead, but that is future talk and cannot be included as long as nothing is in writing. Once a year, every April, I also receive a bonus of 1,100 euros gross, of which about half remains.

My fiancée is 27 years old and is currently doing a traineeship in the press office of a district after completing her Bachelor’s and Master's degree in social sciences/public relations, net salary still 1,900 € (private health insurance already deducted). The traineeship is planned to end in August this year, her boss would like to retain her as a full-time employee, but unfortunately has not yet received budget approval from the state/district – so there is still a question mark here about where and how her professional future will develop.

Our wedding is scheduled for August 2024; until then, we want to save the necessary money. We want children (1, maximum 2), but only after a possible house is standing and we have lived in it for 1–2 years – if finances permit.

Why "obstacles"? Unfortunately, I inherited a large pile of debt from my father, who passed away in 2017 (as his only child), which has really made things difficult for me/us over the past few years. With strong support from my family, my partner, and a private savings plan, I will have managed at the beginning of 2024 to have fully repaid the debt mountain and am really looking forward to that day. Therefore, it has been absolutely impossible for us to accumulate equity in recent years – here I have the big fear that this could or will negatively affect us during the planned home construction. I don’t want to go into more detail here, it’s a difficult topic – just background information before questions like "Why is no equity available?" come up.

Nevertheless, we have always held on to our dream and in May 2022 bought a plot of land from the municipality in the new development area here in the village, financed variably to avoid dependence on a bank: 700 sqm at €90/sqm, all incidental costs such as property tax and notary fees have been paid out of our own pocket, the monthly installment is currently set at €600, so we have already repaid about €6,000 – more is currently not possible due to the debt repayment. We absolutely want to stay here in the village because we really feel comfortable and have met many friends since our move in 2016. With 350 inhabitants, it will unfortunately be difficult to impossible to find a suitable existing property here in the future. Free special repayments are possible and have been agreed with the bank, but because of the above points, this is not an option until mid-2024.

Originally, the contract stipulated a building obligation until May 2027 (house + garage/carport & garden), but we have already received written notification from the municipality that this has been suspended and initially extended until 2030.

Fixed costs currently:

    [*]700 € warm rent
    [*]700 € plot repayment (600 € principal + 100 € interest)
    [*]1 leasing vehicle (mine) – 350 €/month, ends end of 2023, then we want to get something cheaper if possible
    [*]1 car financing VW Golf 7 (my partner) – 250 €/month, fully repaid mid-2025
    [*]60 € dog food/month
    [*]600 € ETF savings plan (primarily for the planned wedding), more is currently not possible
    [*]+ the repayment of my father’s debts until end of 2023/early 2024 at the latest
    [*]+ food, clothes, gas, insurance, dog tax…

Otherwise, we live quite frugally, try to turn every cent multiple times and avoid unnecessary expenses. We are happy with what we have – without the inherited debts, it could be much more and much more relaxed, but that’s just how life is. I am not angry at my father and would be glad if he were still here today – but it’s certainly a very strange feeling at first – originally debt-free and then suddenly you are surprised. We have no personal debts, no negative credit bureau entries, own 2 credit cards, and have a joint checking account.

We have already said goodbye to our original dream of 160–170 sqm including garage, photovoltaic system, and all the trimmings. We would simply be happy to be able to build about 140 sqm standard sometime in the future – without fancy extras. The question will be where interest rates stand in 2024/2025 and how everything will generally change by then (living costs, construction costs, labor costs, salaries, etc.).

What does the forum think? Should we hold on to our dream? Or do you see no chance at all over a 3–5 year horizon? This is certainly not the most common request, but I discovered this forum about 3 weeks ago and just wanted to know how you see it – I have read really good and competent statements and advice in many threads. :)

Best regards Eric
 

Nida35a

2023-03-06 11:22:38
  • #2
Welcome to the forum, you have your life planned out so thoroughly, respect. If everything goes as planned, it will be good for you. I would follow the plan and keep an eye out for good opportunities on the side, [there will also be good established properties available] over the years.
 

markusla

2023-03-06 11:24:26
  • #3
Without equity, I believe it is unrealistic under the current market conditions.
 

SoL

2023-03-06 11:28:12
  • #4
You would probably have to budget around €500k for 140m² including incidental construction costs. With 4% interest and 2% repayment, that would be €30k per year = €2.5k per month in addition to the land loan. Unfortunately, I do not consider that realistic.
 

Caudaequina

2023-03-06 11:29:20
  • #5
Overall currently and in the future difficult without real certainty who earns what when except for yourself.

Quick question about the debts… why are you paying them off? You could have rejected the inheritance? That would certainly make everything simpler now.

For a standard - 140sqm you are already at about €420,000 (3k construction costs - if you don’t do anything yourself) and on top of that there are still a lot of additional costs for incidental building expenses, kitchen etc. Conservatively estimate about 100k. Then it’s €520,000.

As I understand it, only debt freedom will be on the other side and no equity?!

With assumed 4% interest and 2% repayment that’s €2600 per month without ancillary costs on an income currently just over €5000. That would be more than 50% of the income (calculated without ancillary costs). Then there are the cars as expenses which will eventually disappear but at least for you will reappear as a new leased vehicle.

In summary: That would be too much monthly burden for me based on the current financial situation. If you earn about 4k and your future wife maybe 3k, then it would certainly be easier and also manageable. Currently, I think any bank would decline.

But hey, in the future more money might be available monthly… then it might look better, if interest rates don’t land at 6% or higher.

Best regards

Philipp
 

EB_Hausbau2025

2023-03-06 11:35:25
  • #6

Thank you!


Thanks to you!


Thanks for your opinion! It’s just the question of where we will stand in 2024/2025/2026 – unfortunately, my crystal ball is currently out of order. A couple of friends - as a comparison - just closed. 147 sqm prefabricated house, 500k€ loan amount at 3.7% and 2,050€ monthly rate (for land + house), they contributed about 50,000 euros in equity – I have to say I don't find that particularly much equity either.


Thank you, Philipp! Declining the inheritance was not possible in that form, we also were in contact with our lawyer about it. As I said, I don’t want to go into the background here, I’m just glad when the topic is over and I can close it. My mother has already promised to gift us 25,000€ equity, presumably by the end of 2024 we would then have 30-40k € equity, but that’s all still a crystal ball at the moment. The repayment of the land until then is also equity in that sense.
 

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