Feasibility financing new construction (land + semi-detached house or semi-detached half)

Personally, I would have concerns with a rate of over €2000 with your salary, you also have to consider the monthly additional costs for the house, which easily puts you at €2300+ for the house. After your current salary, that leaves about €1000 for everything else, which would be too little for me. I simply think the plot of land is too expensive for you. I don’t think your dream house has to be buried, but you’re not doing yourselves a favor sinking so much money into building land and then having to cut back on the house or life itself in the end.

Total income: Currently 4,113 EUR

I am usually not that strict about financing either, because we ourselves can save excessively (if needed).

How much equity can you continue to save monthly?

You have 3 children; will there be daycare costs for the two younger ones in the future?

You want to put all the equity into the financing; what about the costs for painting and flooring, possibly additional furniture (garden furniture, for example), outdoor facilities (e.g. paving, terrace, drainage)? Do you want/can you basically stay outside on a construction site until you have enough money again?

Often the basic equipment, especially in the electrics, is rather sparse, so what about additional upgrades (more sockets, ceiling spots, etc.)?

What about holidays?

Are there any special features on the property that could cause you additional costs? That probably only comes out after the soil survey, or do you have a slope on the property?

I can think of things like fees for permits, construction site crossings, everything (also) small stuff that adds up...

If you don’t have a reliable background who can financially support you if necessary (gift or long-term loan), I would keep my hands off it.

Good morning,

regarding the income/expenses, one could still comfortably finance about €400,000 here.

€530,000 is very ambitious, and that does not fit the current income situation at all.

On the other hand, when do you get the opportunity in the Stuttgart area to acquire a new property for €600,000, or let’s say €650,000.
(currently, one would probably have to calculate about €800,000, where you still need to invest money)

Therefore, you should consider this carefully.

The "only" thing one could still do here is to try to delay the repayment, i.e., if you say: the woman will start working soon, bringing in €1,000 per month = that relaxes everything.
But as long as she doesn’t work, such a burden would be difficult to manage.

That means you would have to present the bank with a repayment plan until retirement + exclude interest rate change risk!
The good thing is, you still have 37/38 years until retirement.

So you have to set up a plan here where the loan repayment is completed within those 37/38 years.
And you also cover the interest rate risk.
If planned well, you could probably manage at the beginning with €1,800 (possibly even less). Then you would calculate with a rate of €2,200-2,400 in 15-20 years (when hopefully the woman starts working, and accordingly the income is €1,000 higher...)
Only something like this could work from today’s perspective.

If you have any questions, I am happy to assist.

What is the market value of the land and house after completion? In my estimate 800,000 EUR [..] Total costs: ~611,000€

Aha, and where does this 200,000€ difference come from? That alone should raise suspicion. Neither are you buying below the standard land value, nor are you buying an existing house below value. Where does this money increase come from? (Sarcasm: Buy and build all four semi-detached houses and sell three of them again, then your remaining half is almost free ;) )

Allkauf house? Those are shell houses, right? There are still finishing costs to come,... all the interior finishing in DIY. Or am I mistaken? Price-wise that would fit: 100,000€ in labor... is that doable?

That would very well explain this difference compared to the local price structure.

Regarding selling immediately again.
In our municipality, you have to live there for 15 years; otherwise, you have to pay the difference to the standard land value as a penalty. That can also end badly.

As far as I know, the municipality can refrain from imposing the penalty in individual cases. They only want to prevent speculation. If a family is forced to sell because they are collapsing under the financial burden, the municipality surely won’t add a penalty on top of that. And even if they did, you would probably still break even more or less, even with the penalty.

As I said, it’s really challenging, and I probably overlooked that your own contributions were already included, but on the other hand, this is probably the only chance for the OP to build a house in this area. And if they had more income/equity, the plot might not have even been offered to them.

I would probably give it a try, even if it’s very tight. But this is an opportunity you might only get once in a lifetime. If you don’t do it, you might always wonder whether you should have taken the chance. If you do it and it goes wrong, it’s unlikely that you’d be financially worse off than you are now.

But maybe just discuss how catastrophic it would be for you if you actually had to sell the house again in the worst case – so regardless of the financial aspect, because of course, the time investment must not be overlooked. Ultimately, you have to decide for yourselves how much risk and sacrifice you are willing to accept.

And maybe you can also talk to your employer and explain your situation. Even if you probably won’t get a raise immediately, you can make a plan on how you can develop in the future to maybe earn more money in a year.

Aha, and where does this €200,000 difference come from?

Presumably because the property would be worth significantly more on the open market.