House building realistic? Young family seeking advice

Sorry if Off Topic: Where in the Stuttgart region are plots available for €350/sqm? I’m really curious...

Gotcha. Replace region with area and it fits. Living near Ludwigsburg and there €350/sqm is quite possible. Directly in Stuttgart or in the sub-areas, of course, unrealistic.

Parental leave should also be taken into account when a new child arrives and the question of whether one wants to return to full-time work afterwards.
How is the care of the older child handled in secondary schools? Homework, studying, etc. becomes more difficult and time-consuming.
At your "current" salary, I don’t see a problem with the loan. Of course, it would be better to bring in as much equity as possible, but it could work this way too.

We have naturally considered this in advance. If anything, we want another child only after my partner has finished his studies and has found a new, better-paid position in the company as he wishes. By then, I should also have reached my target classification, so financially we’ll be better off than now. The older child will then be at least 11, probably 12. Parental leave of one year is planned. Afterwards, part-time with 20-25 hours (currently I work 35) and a few years later full-time again. In my company, and especially in my department (IT), it is common for women to return to work promptly. We have flexible working time models and the option to work from home. Therefore, managing child and household “works well” at the moment.

Regarding childcare costs, I see that these will then drop for child 1 and instead arise for child 2. One reason we want to build in this town is because grandma and great-grandma also live here (yes, the whole family started family planning very early).

So overall, I assume that if anything, slightly less net income will be available than is currently the case.

I’m glad we are building in the Rhineland.
For us, those are moon prices that are accepted in southern metropolitan areas.

I advise saving up equity and cutting down luxury expenses, because that is somewhat safer.
Equity should be brought into a financing, otherwise there could be a nasty awakening.
With your income, nothing except the currently low equity will speak against your wish.

I expected responses like that. Until we heard about the building plots, the plan was also to build in 2-3 years because we wouldn’t be as time-restricted then.
Assuming we wait another 2-3 years, we could surely set aside €1,200 monthly + €10,000/year through special payments and tax refunds. That makes €40,000 in two years and €73,000 in three years. When I then read that 20%, better 30% equity is necessary, we would still be quite far from €500,000 for a prefab house including land. And the incidental costs and kitchen are not even included, which can/cannot be included in the financing sum(?).
With a start of construction in one year or later, saving for incidental costs and a kitchen would not be a problem.

In my research, I have always encountered the statement that building without equity only pays off for those who earn a lot and can afford a high monthly amount. I would have counted us among those.

Then there is also the unjustifiably high rent, which is also part of the reason it’s itching for us right now. Our previous tenants had half a zoo in the apartment. Accordingly, the entire floor is scratched and partly stained, which I interpret as animal urine. The electrical appliances in the kitchen that we took over also had to be replaced by us because they were damaged and partly broken from overuse. Moving now would mean we would have to shell out a hefty amount again.

Dilemma. Reason says wait but the heart says why wait another 3 years if we could have our own home earlier. And what if there are no new building plots in 3 years—will we then regret the missed chance?

So here in NRW Heiligenhaus or also Oberhausen, the price per square meter in new development areas is also between 300 and 350 euros per square meter.

But now to your situation. I do think that the bank would approve a loan of that amount despite the low equity capital. However, I would first keep a household budget book for several months to see how much the fixed expenses (mobile phone, electricity, insurance, tickets or fuel costs, ...) actually add up to. Banks always apply flat rates, which can vary greatly depending on lifestyle.

You said that you just finished your studies and now you are treating yourselves. You need to find a healthy middle ground for yourselves. I also wouldn’t give up too much. But since you also know the other side, it shouldn’t be a problem for you.

As an IT specialist and mechatronics engineer, one has very good chances on the job market and also enough alternatives in the Stuttgart area.

If you secure the conditions for 20 years or possibly even longer and additionally take out a disability insurance and/or life insurance for 20 years, you will be well covered for the amount. By then, a large chunk should also be paid off.

Hello,

purely in terms of income, it of course looks good. If you decide to purchase the property next year, you should still start now to get your expenses under control. On the one hand - one gets used very quickly to being able to spend higher amounts. And - it is actually difficult to reduce this again, even if you lived differently before. On the other hand - you can still build up some equity over the course of next year.

If you start now, you can see in the next few months whether it works as you imagine. For this, you should also keep the already mentioned household book. If it doesn’t work - you still have the option to withdraw from the purchase.

I grabbed the calculator and added up your figures.

Income approx. 6,000 euros (special payments and bonuses are not included) - rent (warm) 1,100 - savings (you) 650 - savings (he) 450 - car (you) 250 - car (he) ??? 250 - childcare 350 - living expenses 1,000 flat rate (in my opinion relatively high) - car loan (he) ???

In the end, there remain 1,950 euros per month (excluding car loan), which disappear into other channels. You now have to determine where this money goes (e.g. necessary insurances, mobile phone, pay-TV, clothes, vacations, eating out, etc.). Afterwards, you have to find out how much you can and want to restrict yourself (after all, you don’t want to sacrifice everything for the dream). Then carry out these restrictions until the potential purchase date.

The rent as well as your savings amount to 2,200 euros per month - savings would then be added here and you can already increase your equity.

By the way, there are still a few months between the land purchase and the start of construction. Thus, your boyfriend could almost be finished with his studies before you start building.

Think about the topic of a second child again calmly (no - don’t abandon the wish). Consider that you will only have about 60% parental allowance left. The rate remains the same. You have to cover this gap either with saved capital or with restrictions in living expenses.

If I were you, I would definitely apply for a plot of land! That doesn’t mean you will actually get one or that it will be a parcel according to your wishes. But let's be optimistic, if it fits, you should also buy it. It could be that you have to wait several years for the next good plot (and whether it will be cheaper then?).

Hello,

I also think that you can manage the corresponding monthly burden.

Therefore, I definitely recommend that you apply for a plot of land. From my experience, it is unfortunately no longer certain that you will actually be "allocated" a plot of land on the first attempt.

We also have some families in our circle of acquaintances who have come up empty up to three times.

It is definitely useful in the current situation to keep a household budget and separate necessary from "unnecessary" expenses - this can also immediately increase the monthly savings performance to grow the equity faster.

Have you already looked around at the prefabricated house providers?

If interested, I would be happy to send you the link to our construction blog ([individuelles Holzständerfertighaus im Kreis Böblingen]) - maybe you can get one or two ideas from it.

Best regards,

Dirk

Think again calmly about the topic of a second child (no - don't give up the desire). Keep in mind that you will only have about 60% of the parental allowance. However, the rate remains the same. You will have to compensate for this gap either with saved capital or by making restrictions in your lifestyle.

Special payments and performance-related payments are not included in the calculation of the parental allowance. In addition, tax repayments may have to be made. All of this should be taken into account.