Hello everyone,
I had to think everything over again yesterday and sleep on it overnight, which did me good.
So, our conversation went very well with Allkauf Haus. We went there with building plans and soil survey.
Unfortunately, I have to keep it brief as I have to leave soon:
In advance, we will withdraw here.
- Building a house (including access road) would cost roughly* 320K EUR for one unit, without attic conversion, which would be too small and would only be suitable as storage space.
(Included would be the all-inclusive package including the additional FreeTime service.) This would really cover all further services such as sanitary, kitchen, tiles, floors, walls, ... Of course, during the selection of fittings it would be higher, as we would certainly want more power outlets, higher windows, etc.
* About the rough estimate: According to the soil survey, the ground has been filled up to a depth of 1.5 meters. He said that whether it's a slab foundation or a basement, the fill would have to be removed anyway, so significant additional costs even with the slab. Therefore, the price gap between slab foundation and basement would not be that extreme.
About the house: 127 m² on 2 floors. But there is only a small, insignificant attic space left with a room height of 2.75 m, which cannot be changed.
For additional expenses, garden and carport or parking spaces would be options
Briefly about the allocation procedure:
- Construction must begin within 5 years after development, so by mid-2027 at the latest
- Obligation to use the property for own use for 10 years.
So we could also just buy the land first and then wait and save more, but that is too risky for us; we don't want to rely on chance.
I will also briefly answer some questions:
...
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?
...
What about vacations?
Are there any special features on the property that could cause you additional costs? That probably only becomes clear after the soil survey, or do you have a slope on the property?
...
- We currently save 20K per year (but this includes variable bonuses from the employer, which I didn’t consider in the first post as they are not fixed.)
- We pay no daycare fees for the children
- Vacation costs us 3K EUR every two years
- The plot is level but filled. Soil survey available.
Good morning,
Regarding income/expenses, one could still “comfortably” finance about €400,000 here.
At €530,000 it’s very tight and doesn’t fit the current income situation at all.
On the other hand, when else do you get the chance in the Stuttgart area to buy a new property for €600,000, or let’s say €650,000?
(Currently, you probably have to calculate more like €800,000, where you still have to invest money.)
So you should really think this through carefully.
The “only” thing you could still do here is try to shift the repayment “backwards,” i.e., if you say: the wife will soon start working and bring in €1,000 monthly = that relaxes everything.
But as long as she doesn’t work, such a burden would be hard to manage.
Meaning, for the bank, you’d have to present a repayment plan until retirement and exclude interest rate change risk!
The good thing is, you still have 37/38 years until retirement.
So you have to create a plan where the loan repayment is completed within those 37/38 years.
And also cover the risk of interest rate changes.
If planned well, you might manage initially with €1,800 (possibly even less). Afterwards, the rate would be €2,200-2,400 in 15-20 years (when hopefully the wife starts working and the income is about €1,000 higher...)
Only something like this would likely work from today’s perspective.
If you have questions, I’m available.
Thank you very much! Especially because you know the local situation here. For us, it was primarily about "Will there be another opportunity like this?" We know that we currently don’t have the best conditions. Unfortunately, everything else speaks clearly against it (construction costs, interest, ...), meaning our savings on the land would get eaten up elsewhere.
Aha, and where does this €200,000 difference come from? That alone should make you suspicious. You are neither buying below the official land value nor buying an existing house below market value. Where is the money gain coming from?
(Sarcasm: Buy and build all four semi-detached houses and then sell three again, then your remaining half is almost free ;) )
That would explain the difference very well compared to local price levels.
Because only a certain circle has access to the plots here. The land is subsidized and therefore significantly cheaper. Just calculate it: a few streets away, plots were sold in top bid procedures between €1,100-1,200/m². That’s roughly €200k difference. However, we have restrictions regarding resale, see above.
How big is the apartment?
If too small, is there perhaps a bigger alternative through the employer?
Because I think you can hardly live cheaper in the Stuttgart area.
Our apartment is 75 sqm, 3 rooms. Unfortunately, there is no bigger one; my employer has kindly left me the best apartment location-wise...
On first glance, conditions are okay... but in the USA there is no fixed interest rate, meaning rates are adjusted quarterly... so if the bank rate is at 1.50%, then everyone can pay nicely... if it then rises quickly (within a few months or 1-2 years) to 3.0% or more, then everyone has a problem.
In Germany, this can be neutralized with fixed interest rates.
Besides, they are creating value here if the house is worth €200,000 more after completion (current market price) due to land price (probably subsidized in the region) as well as some sweat equity.
As a counter-question, one can ask: what about rent in the coming years if we have inflation here?
If you'd have to pay 2.50% interest to the bank right now, that would probably be below inflation... and the question is when inflation drops below this?
From these perspectives, they would probably build assets (even if they repay little here).
And then they have the option to sell the house in 20 years or whenever the children have left the house and buy a 2-room apartment.
I think then they would have enough capital for the condominium and a goal like living in fully paid owner-occupied housing in retirement.
I don’t know how big their current apartment is. The children are still small, so demands are probably still low. But in a few years they will probably need something bigger, then the question is:
- Will they find something?
- What does a bigger apartment cost? €1500 cold? Or more? (considering tight housing market + rising prices!)
You can forget about a bigger rental apartment here... My “neighbor across the house” pays €1.4k cold rent for 85 m² and 4 rooms... That’s outrageous... o_O So we will stay here a while longer...
Well, expenses + rate - old rent > income.
(Higher ancillary housing costs and savings rate for a new car not even considered.)
Actually, the only help is to increase income, e.g., through changing jobs?
Yes, it would be financially worthwhile to stay as long as possible in your current cheap apartment.
Since the land is subsidized, there is certainly a build obligation. So if you only buy the plot now, how much time do you have?
Sure, you see now the rising interest rates and costs, but that will stabilize again at some point.
So just buy the plot now and build in three years. Would that be possible?
We don’t plan to buy a new car; ours is only 2 years old.
A job change is basically out of the question because otherwise the cheap apartment would no longer be available and I would additionally have daycare costs.
Career prospects are relatively good and the salary also rises annually. What extra costs that alone would cause me, I can’t even imagine. :)