First calculation - realistic?

Good morning everyone,

I registered here because we need some initial advice regarding our desire to buy a house.

Briefly about the situation
Our living conditions have deteriorated significantly in recent months and we need to look for something else.
However, the rents for something comparable are now beyond reasonable here in the area (Cologne/Bonner surrounding area).

But since we have always dreamed of owning a house, we now want to put this into practice.
My parents would also join in and co-finance the whole thing for a few years.

The plan
Our dream would be a triplex townhouse:
Left/Right: My parents/Us (left/right due to garage)
Middle: Rent out two residential units (Good friend & mother)

After some research, this will probably remain a dream (or?)

More realistic would probably be a "simple" semi-detached house without renting.

The finances
Income
Both in public service (32 and 33 years old), permanent contracts, crisis-proof jobs (emergency services / daycare)
2500€ + 2000€ (for 35h, when kids are older, then also 100%)
2x child benefit (10 and 11 years old) 408€
2x advance maintenance payments 513€

Equity capital approx. 70,000€ (in the worst case, another approx. 25,000€ can be obtained from insurance payouts, but this should be avoided if possible, as the deduction is too high).

Expenses
Rent: 530€ cold, 730€ warm + 110€ electricity
Other fixed costs carefully calculated overall: approx. 2000€
Including four loans, two car installments (approx. 400€), one consumer loan (300€, made a big mistake here, still runs for 7 years) and one KfW student loan (140€)

Shopping and fuel I calculate at about 1000€

There are still many variables (here a child’s birthday, there a new sports club, pocket money, new furniture) ~500€

The rest is then saved separately at the end of the month.

Calculation
Income: approx. 5400€
Expenses: approx. 4300€

Makes cold rent + savings = 1600€
Since I don’t want to calculate too tight, I assume a realistic rate for us alone of 1000€-1200€.

Future
Child benefit and maintenance payments will of course cease in the foreseeable future, but then all loans will also be paid off, and there will be no new ones.

Parents
My parents have a net income of about 3400€ together, but they have "only" a little over 10 years until their well-deserved retirement.
They would contribute about 600 - 700€, which is almost 150% of their current cold rent.

And now?
Well, now I stand here with my calculation and don’t really know what to do with it.
Realistically, until our retirement, our rate is 1000-1200€ + minimal salary increases over the years (TvöD), whatever inflation allows.
Whatever my parents get in pension, they can keep it and at most contribute a small part (200 - 300 euros).

Pessimistic: 1200€
Optimistic: 1500€

In any case, this still leaves enough buffer to save a little and allow some spending now and then.

Construction financing
I like Excel, so I did the math and came up with the following calculation until our retirement:

Interest 1.2%
Annuity 1200€
Approximately 470,000€ would be manageable here

Interest 1.2%
Annuity 1500€
Approximately 530,000€ would be manageable here

Renting out?
Renting out two residential units, roughly 600€ rental income after taxes.

Interest 1.2%
Annuity 2100€
Approximately 720,000€ would be manageable here

House
We are actually quite undemanding here, garden, garage and quietness are what we want. Everything else can somehow be made nice.
We don’t need anything representative, no study room, no fancy tiles, special wallpapers or expensive furniture.
We are very skilled craftsmen ourselves, also have plenty of craftsmen in the family (tilers, master electrician, painter & varnisher, landscape gardener, etc.), our time is more of a factor here.

Questions
Is the calculation even realistic?
It will probably come down to building a prefabricated house, how do you find reputable providers here?
We might possibly get a plot from the city (employees are preferred). Are there other sources than the usual known portals?
Did I forget anything?
Did I forget questions I should ask myself?

Maybe one or the other feels like having a look at it and might even have tips on how we can proceed best and put the whole thing on a secure footing.

Thank you very much!

Hello,

I have to ask what your idea is?

Either DH for 600k (530 loan + 75 equity) or for 800k 3 terraced houses with a total of 4 residential units?

That means per residential unit 200k - 300k including land, additional costs, houses, equipment, etc.?

In my opinion, that is completely unrealistic. In all variants. Honestly, I didn’t even look at the rest anymore.

So the situation with the parents, who are 10 years away from retirement + rented residential units + ancillary costs etc., will be extremely difficult with the equity.

I would recommend buying/building a house for yourselves alone without renting and without the parents. With your income, you will certainly get a €400,000 - €500,000 loan fixed for 20 years at 1.10% - 1.20%. That combined with your equity sounds like a good concept.

Best regards Sebastian

I somehow have the feeling that the equity comes from the parents and that’s why they should/must be involved, right? 70k equity and then the loans somehow don’t add up.

If you have the 70k€ without the parents as well, then build a small house for the four of you. That will definitely somehow be feasible with the income.

The big question is also where do you want to build and what do the plots cost there? When I hear Cologne/Bonner area, I feel sick and immediately picture 300 to 400 EUR/m²...

Even if you manage to build 3 terraced houses including land for so little money, I consider the 2 rented residential units for 600€ unnecessary and risky. This only unnecessarily inflates the whole construct and it is not guaranteed that you will 1. rent them out at all and 2. rent them out constantly. Then you also need maintenance reserves and so on. Even if you received 600€ for 20 years, you would have generated only 144,000 euros in income after 20 years and there would probably still be residual debt for these units alone.

Overall, there are far too many risks for me:
1. Unclear costs for land and construction. A very tight budget frame has been set here, which will hardly be met even with a lot of personal effort.
2. Parents are involved and cannot contribute much.
3. Rental income is not secure, but it has to come in otherwise there will be too little income.