Financing check - Is house construction possible?

Hello everyone and happy 4th Advent :)

We (he 26, she 24) are currently renting a 72sqm apartment. We are gathering information in all directions and are still at the very beginning. We imagine a 130-150sqm single-family house or a semi-detached house. A basement would of course be nice, but it is questionable whether it is even feasible. We don’t have a plot of land yet, as mentioned we are just at the beginning. The whole thing is planned to take place in the Rhineland/Bergisches Land. Of course, these are not the cheapest conditions and location, so we first want to scout the area in advance – what is possible and what is not.

We have an appointment at the house bank in January.

Do you think a financing amount of 400,000 euros is realistic? Are the ideas we have realistic or far from reality?

As mentioned, we are just at the beginning and are therefore extremely grateful for any input and advice!


General information about you

[*]How old are you? see above
[*]Are there children? No.
[*]Are children planned? Yes, but we still have some time for that.
[*]What do you do professionally? Both work permanently in sales. He in wholesale, she at a financial service provider.
[*]How many hours do you work? Both about 38.5 hours each.

Income and asset situation:

[*]What income do you have (gross/net)? He 2,100 net and she 1,730 net. Total 3,830 net + 13th salary and bonus at the end of the year. Since we are (still) quite young, we of course expect corresponding increases, but these are not contractually or collectively agreed.
[*]How much equity do you have? Together a total of 85,000 euros.
[*]How much equity do you want to put into the house project? Maximum 40,000 euros.

Expense situation:

Housing costs:

[*]current cold rent - 624 euros
[*]current warm rent - 910 euros
[*]electricity - 70 euros
[*]phone, internet, mobile - 50 euros

Mobility costs:-

Currently we have two medium/small cars available, which are paid off. We do not have a loan for a new car, so we do not want to put all the equity into the project. We only pay one car insurance; the insurance for the smaller car is kindly still paid by the parents.

[*]insurance - 50 euros
[*]taxes - 6 euros
[*]fuel - 150 euros (currently long commuting distances and trips to the parents, etc.)

Insurance costs:

[*]liability insurance, household contents, supplementary health insurance approx. 20 euros

Living expenses:

[*]groceries - 250 euros
[*]hobby (club fee) - 35 euros
[*]miscellaneous, Spotify, pay TV etc. - 40 euros

Income and expense totals:

[*]total income - 3,830 euros
[*]total expenses - 1,561 euros
[*]balance - 2,268 euros
[*]of which cold rent and dispensable savings - 624 euros dispensable cold rent
[*]balance sounds great of course, although general consumption, vacation etc. still has to be added. Nevertheless, we manage to save about 700-1000 euros on average per month.

In the future, part of us will receive additional income in the form of rental income (3x apartments + semi-detached house). This has already been notarized as a gift.

Thank you for your time, please be kind and have a nice Sunday!

PS: Please be kind :)

Your income does not necessarily support a loan of 400k.
The costs also seem very understated.
For example, with 150€ fuel costs, no repairs and so on, no retirement provision, few insurances, no clothes, vacation, etc. etc.

Is the equity saved by yourselves or from your parents?

With the gifted apartments and [Doppelhaushälfte] it can work.
But it also depends a lot on condition and location, you don't want to end up putting in more than you get out. ;-)
Why don't you move into the gifted [Doppelhaushälfte]?

The equity is already good. Just keep saving as much as you can for now. With a 400,000 loan, you won't get far. At least, you won't be able to build a house with that. Saving 40,000€ for cars when you have 85,000€ is a mistake. With 85,000€, you should also put 70,000€ into equity. You are young and still have plenty of time. Therefore: look around the market, don't believe every listing that claims to be the total of all expenses. Check out the construction cost subforum. Keep a household budget with all expenses: where do you see gaps, where do you see potential. For me personally, the income threshold on the downside is always 4000€. Keep in mind that one salary will disappear when planning for children. And pay attention to new development areas nearby... possibly also look further out (consider infrastructure and your own living conditions).

Good morning,

Rental income is nice, but you surely have obligations arising from it, right?

Otherwise, did you save equity yourself or receive it as a gift?

How does the real estate area look for you? What do you want/can you manage with the 400k? New construction, purchase of a new condominium or existing one? Purchase of an existing house including renovation?

Of course, you can do that at a young age if the budget and the object fit. You should definitely keep the 400k.

Everything is on a good path. Stay on it. If a super property comes along, you can go ahead and snap it up. The cost calculation leaves no room for unforeseen expenses and is quite optimistic but feasible for very disciplined people. (For me, that would hopelessly go wrong). Watch how well the rental property performs - you need reserves for the building and rental defaults - these are available in the form of equity. Impatient people would start immediately with this assumption. Patient ones wait a little. Impatient people need a lot of focus and discipline with this assumption - which is usually not the first virtue of the impatient.