Financing house construction - duration, feasibility, cost plan, etc.

Hello everyone!

I have been reading here for some time and would now like to know what you think about our construction project regarding its financial feasibility.

We
- My wife 32;; tenured teacher full-time; net €2700,
- Me 28y; full-time permanent employee; net €2100
would also like to build a house. :)

Currently, we are still renting (cold rent €750)
We are getting the plot as a gift from my parents, approx. 500m²; value approx. €100,000.
Additionally, we currently have available equity of approx. €60,000.
(We also have €25,000 in reserve, which we do not want to use because of an older car and desire for children)

Construction is planned to start next year around May/June.

We have already had initial appointments with our preferred architect, which were only about a preliminary design.

Since we do not have children yet and they (2 of them) will come in the next few years, I am extremely cautious about the financing.

The plan is a single-family house with approx. 160m² + a granny flat + double carport for us and 2 gravel parking spaces for the granny flat.

All included, it will probably cost us approx. €430,000.

We have set a maximum term of 32 years. Then my wife would be 65 years old and could possibly stop working earlier.

The property is to be built in Passau; due to the many students, we also want to rent out the apartment to precisely such tenants. After thorough research, I expect a cold rent of approx. €10/m²
At approx. 33m², that is €330.
Possibly, the area for the granny flat will be expanded to 40m² and divided into 2 mini-apartments of 20m² each. My parents have owned 4 of such next door for 25 years, and they have been continuously rented out, so I don’t worry about the reliability of rental income. Then the cold rent income would be approx. €450.
Since I am not very familiar with this area, we would consult our tax advisor again separately about this.

We ourselves would like to spend no more than €1,100 for interest + repayment.
Is that okay for us, or are we overstretching ourselves?

Summary:

Equity: €100,000 plot + €60,000 cash
Financing requirement: approx. €370,000
Term 30 years (at least 20 years fixed interest period aimed for – preferably longer and secure)
Monthly income: 12x €4,800 + bonuses, wife’s 13th salary, holiday pay and bonuses from me
Available rental income for repayment: €300-450
Own monthly annuity max €1,100

I would be very happy to get assessments of feasibility.

If I enter the data for the financing at Dr. Klein, I come to a monthly burden of exactly €1,450 with a 25-year fixed interest period over a term of just under 30 years. So that looks good.

Greetings Mathias

€: Could one of the moderators please move the thread to the correct section " "? I chose wrong when creating it :(

Sounds like a well-thought-out plan with a very good family income. Comments from my side: - Salary reductions due to children (parental leave, part-time work, etc.) or increased expenses - Term length acceptable for your age (I would include special repayment options or repayment changes so that you can potentially get out of debt faster if your income increases) - Split the loan and make the financing for the apartments interest-only (talk to your tax advisor about this), and repay a bit more on your private portion - What do you do with the money left over at the end of the month? You could also repay more directly (or pay off part as a full repayment over five years). Please don't set your expenses directly at T€ 3.5 p.a. now, otherwise the very good family income won’t help either ;)

No, of course we're not currently shelling out €3,500 :D Living costs with my wife's private health insurance currently amount to €1,800 (including €750 cold rent, €200 additional costs, €40 electricity, and whatever else you need, excluding food and entertainment) The car adds about €300 per month without reserves for repairs and what we need for food and entertainment. Savings rate is therefore currently about €1,700/month Although one has to say that we are living quite well, often eating out and among other things were on vacation three times this year... ^^

looks GREAT.

Why don’t you calculate a 20-year financing? Maybe there's still some room with the interest rate. Otherwise, [Sondertilgungsrechte] would be a must-have for you.