First an apartment, then build a house?

Hello!

I am reaching out here for the first time because we two always go around in circles otherwise, and opinions from your side might possibly help us.

Situation: We (31 and 34, no children) live in the outskirts of Stuttgart renting for 950 euros cold rent for 100 sqm. Both employed full-time and permanently in large companies, so no surprises are expected on that front. However, we have now reached the stage of family planning. If we have children, we want to move back to the north. Here we are initially only counting on his salary for safety, and we think that a move will only be possible professionally in about 6 years (he is in a management position and we would only move with 100% certainty and an equivalent job for him in the north). Our rental apartment is manageable with children, but actually we would like to have a small piece of garden with kids and currently we have gotten annoying neighbors, which makes us consider how to proceed with property ownership. So currently, an apartment with a terrace of similar size would be okay (300-350k here) and in the north we would want to build or buy a house that would also cost 300k-350k.

Facts: 950 cold rent currently, so about 10k per year 60k equity now, per year + at least 20k equity (besides rent, even if I do not work)

Question: Does it make sense to buy an apartment here for about 6 years and then sell it again (not fully paid off) or do banks allow this if it is rented out while we take out a new loan on it? The additional costs would be roughly offset by the rent so that we would only have an added value for the family, which would also be fine.

I thank you in advance for many opinions and experiences. We would prefer to have everything in the north already, but unfortunately, that is not so easy and we do not want to stay stuck.

Thank you!

We wanted to do it that way too and it would not have been a problem. But our problem was that we found neither a house nor a plot of land, and we liked the apartment as a temporary solution. Shortly before the purchase, however, we did find a plot of land. We had agreed with the bank on 10 years. We had factored in the prepayment penalty.

in the North, we would want to build or buy a house that would also cost 300k-350k.

A construction project for €300,000-€350,000 (land/construction costs/extras/outdoor facilities/kitchen/purchase & ancillary building costs) can only be accomplished with a lot of personal contribution. Also in the North.

A construction project for €300,000-€350,000 (land/construction costs/extras/outdoor facilities/kitchen/purchase & ancillary building costs) can only be accomplished with a lot of personal effort. Even in the north.

No, that is already realistic in the area, several friends have built or bought well and normally and have already considered a house for that price. The kitchen is not included at all and personal effort, if any, will be in the new build flooring, doors, electrical work, etc. Not because we have to, but because we can and have help. We would also pay more for the house there, but always take the smallest risk and can also limit ourselves well. My additional earnings basically make the surplus in the north, and we keep ourselves open whether I am "just" a mom or earn a little on the side or soon earn well again. The amounts here are only given to say: for 6 years only the minimum and necessary things one needs with one child here, and then properly but frugally there.

We also wanted to do it that way and it wouldn’t have been a problem. But our problem was that we couldn’t find a house or plot and we liked the apartment as a temporary solution. Shortly before purchase, we did find a plot after all.

We agreed with the bank on 10 years. We had factored in the prepayment penalty.

Sorry, I have not yet looked into the prepayment penalty in detail, how high the amount could be. We are just beginning to get detailed information and weigh the pros and cons. Can you roughly tell me in percentage terms what one can expect at most? And capital gains tax is only due if you haven’t lived in the apartment yourself and want to sell within 10 years, right? But only if there is a profit?

Do I see it correctly: after 6 years we run the risk that the value of the property has not increased, and that, besides the ancillary costs, would be our loss if we sell at the same purchase price. Right? We are at least calculating with that based on the current situation and the prognosis for the area.

And now again the greatest risk in detail: if we’re unlucky, we rent out after, for example, 6 years and rent in the north for 4 years so that we don’t have to pay capital gains tax or because we haven’t found a purchase property yet, etc., right? How high is our risk aside from all these changes and the worst-case scenarios?

Crucial point of your planning: Find a managerial position in rural Lower Saxony with the same good pay as in the Stuttgart metropolitan area. This will be at least a challenge.

No, that is already realistic in the area, have some friends who have built or bought well and normally and have also already considered a house for the price.

In which district would the Lower Saxony countryside be, where it is supposed to be so cheap?