Finance big, wait, or think smaller?

At this salary, I would not accept any tenant in the house or a direct neighbor. Either buy a detached single-family house directly or build one yourself.

All variants are definitely feasible. As others have already written, it is a personal preference what one wants. I would always prefer sole use of a house. I know both variants from experience myself.

But please let go of the thought that half a million in debt is too much. The amount of the loan does not matter at all. You forget that you can offset an asset of the same amount against it, namely the house. You have just as much debt (as a balance) as without buying a house. You just have to get used to it.

P.S. With creativity, a lot of work and materials can be assigned to the rented unit. Also, with the correct allocation of financing, quite a lot is possible (assign purchase prices in the purchase contract to both the land and each of the apartments respectively. And then of course fully finance the rented apartment and keep repayments as low as possible – high repayments for the owner-occupied part).

Thank you all for the responses! I take away that so far, no one has supported our actual approach (Plan A), and I am therefore already grateful to you for reflecting this mood.

Dear – the considerations regarding the tax allocation to the rented unit were also a reason for seriously considering Variant A. We pay 42% tax plus solidarity surcharge, and I would be happy to have more room for maneuver here. I understand that this can also work as a capital investment in another property. But this way, as a landlord, you are always on site, have direct contact with the tenants, and could of course get to know them somewhat. The plan would not necessarily be to keep it this way forever, but after possibly 5 years, the property could then be converted entirely to sole use, for the time when a) we can afford it and b) the children enjoy a lot of space. Possibly then the parents or parents-in-law (if ever in need of care) could move in with us or we could move back into the ground floor in old age and supplement our pension with the rental of the first floor.

It may be that we could possibly afford a "bigger" house directly, but I want to consider a thoughtful wealth-building strategy right from the start. We actually do not need an increase in the standard of living.

But that way, as a landlord, one would always be on site, have direct contact with the tenants, and could of course also get to know them somewhat.

I am always glad when I have peace and quiet from my tenant. That can sometimes be annoying. Consideration is also always a MUST. Really loud music, children’s parties, movie nights with action blockbusters, sitting outside in the summer, etc. The other way around, of course too – who wants to be annoyed by the tenant. Apart from the tax issue and rental income or maybe having an apartment for the children once in a while, I actually only see disadvantages.

Are the apartments properly separated (e.g. in terms of access), so you don’t have to go through one living unit to get to the other? For renting out, this is basically an absolute must. For "we want to use this as a family as 'more space' with our 6-year-old and (let’s say) 2-year-old child" it’s rather impractical. Do the parking spaces somehow fit? Do the tenants also somehow have an outdoor area or do you say "no, there just isn’t one. Period." (Not so unusual for rental apartments nowadays, even if most tenants would probably wish for at least a small terrace or balcony if they had the choice – but there are also plenty of rental apartments without one)

Personally, if you actually get along reasonably well with the tenants, I’d also feel a bit guilty about giving them notice due to personal use (and it would sort of be like "actually the 100 sqm we have is enough…") But of course, it always depends. It can also simply happen that they want to look for something new anyway (e.g. because of family growth) and that would not be a problem at all.

Otherwise, this is roughly how I grew up: an old farmhouse where at some point the barn was converted into living space. It was then basically 3 living units and over the years we (or at some point just my parents) moved around a bit (at first the family lived in one, then more or less two and made a connecting doorway. Meanwhile the connection is closed again, the two living units are now rented out and my parents have moved into the third). You can do it, but somehow it’s always a bit stressful. Since it wasn’t all planned that way from the start, there was always something to organize and since it is ultimately an old big house, quite a bit has gone into renovation and renewal over the years. Which is still always a bit more than with a smaller single-family house.

Having a living unit for ourselves as teenagers was definitely a huge luxury, but it also meant that we kind of became the youth hangout for the neighborhood. And I’d say the consequences of that were not always positive, without wanting to go into all the youthful misdeeds of my brother and me here ;)

With 300 k equity, the whole thing is no problem. However, I would rather plan without a granny flat. Less credit.