Financing a house with a company as tenant of one half

Hello,

I am new here, but I have tried to memorize the rules of this forum, so please forgive me if I make a mistake.

My girlfriend and I will soon take the next step after 5 years of being together. We have already been living together for the full 5 years and currently have an apartment in a city with relatively high rents.

We are therefore considering whether we might purchase a home - however, I want to inform myself as comprehensively as possible before naively and unpreparedly going to the house bank.

I will now structure my explanations:

1. Financial situation

My girlfriend has a permanent contract with about 2200€ net income per month in a solid industry. I run a small company myself, which has existed since 2010. For a long time, I did not pay myself a salary and financed the fixed income through a side job, which brought me about 800€ net.
This may now change, as my company is growing strongly and my girlfriend is also now employed on a minor basis.

We therefore have the following income (each net):

2200€ salary girlfriend
300€ salary 2 girlfriend (minor employment)
800€ side job

= 3,300€


We currently have the following fixed costs:

Privately paid (each gross):
650€ cold rent
100€ additional costs
70€ garage
70€ electricity
350€ living expenses
50€ insurances

= 1,290€

Company pays (each gross):
100€ DSL connection
100€ mobile contracts
17.50€ broadcasting fee

= 217.50€

Private + commercial
= 1,507.50€

Our equity currently amounts to about 40,000€

2. Company as tenant

As I have already indicated, my company keeps growing. Therefore, I am constantly looking for office space that is affordable but still presentable. Under 800€ (cold) is hardly possible here.
That would be manageable, but then we would have about 1,500€ rent per month plus additional costs privately and on the company side. The idea was therefore to possibly build bigger or to include an option to design a separate entrance for separate company rooms and charge a fixed rent that the company would have to pay.


My questions are therefore:

[*]Do you consider our plan sensible or feasible at all?
[*]How much house could we roughly afford? There are some calculators on the internet, but I doubt whether these calculators take into account everything that experienced home builders have already experienced.
[*]How should we prepare for a conversation with the bank?
[*]Chicken or egg: Should we first clarify the financing and present a "desired property" to the bank, or does the bank expect us to provide more concrete information (possibly already having spoken to an architect, even though the financing is not yet clarified)?
[*]How will the bank view the idea of renting? I can of course provide the balance sheets of the last 5 years, that is no problem - but will the bank perhaps still see that as a risk?

I look forward to your feedback!

I think the issue with the "rental" is practically irrelevant for the bank, as they will probably lump you and your company together anyway, and you have to set up the whole thing either as a private real estate financing or as a commercial one with a personal guarantee.

Not so great for the bank is that practically 100% of the risk is the success of your enterprise, since you are self-employed, your girlfriend is employed, and the company anyway.

Hello lastdrop,

thank you very much for your answer.

Maybe I did not make it clear enough: My girlfriend is not only employed by me. The bulk of her income comes from a permanent position in an established and solid company. I only pay her €300 for helping me with the monthly preparation of the documents for the tax advisor.

The company and me as a private person cannot really be lumped together, since the company is a legal entity. That means the money that belongs to the company belongs to the company. Not to me.

Sorry, overlooked, fair point.

No problem, happens :-)

Considering this correction: How would you see the matter? Please also take into account that my company is legally a separate entity for the time being. So all the money that belongs to the company does not belong to me. I only decide on the use of the money, but my assets and those of the company are strictly separated, and I cannot use them at will. Therefore, I would be surprised if the bank tried to lump them together.

I would prefer not to buy the property through the company, as this could cause tax issues according to the tax advisor.

It would probably be important if you build a kind of semi-detached house, in which one half is initially designed as an office but can also be relatively easily converted into living space.

If your girlfriend acquires a part of the property, then you must ensure protection (purchase option) in case you separate. Otherwise, too much potential for conflict!

With your own office, you can establish a tax-related business split.

The establishment of such is unproblematic; it becomes problematic if you should give up your office location. Then hidden reserves have to be taxed!