House Construction Cost and Financing Assessment

Hello everyone,

I became aware of this forum a few days ago because we are currently planning to buy a plot of land and build on it as soon as my wife returns from parental leave (2024). First of all, we are complete beginners when it comes to building.

The plot is located in a district of Heilbronn (BaWü). The plot is 575 sqm and we could purchase it for 520€/sqm2 (fully developed). The plan is a house with approximately 180 sqm2 (gable roof with 38°) with a double garage and, if possible, fully basemented.

General information about you:

[*]Who are you? Married couple
[*]How old are you? me: 40 / her: 32
[*]Are there children? yes, 3. 17 years old (from a previous relationship, does not live with us in the household), 1 year old and the third will be born in June 22
[*]Are more children planned?
[*]What do you do professionally? me: managing director / her: journalist (on parental leave)
[*]Are you employed, self-employed, retired, housewife, househusband etc...? me: self-employed / her: employed
[*]How many hours do you work? me: 45+ / her: currently parental leave until approx. 2024

Income and asset situation:

[*]What income do you have (gross/net)? me: 7,650 / her: approx. 2,200 net from 2024
[*]How much child benefit is there? €219 - however, this should not be considered.
[*]Other transfer payments such as parental allowance, sick pay, etc...? no
[*]How much equity do you have? €350,000 in a property which is currently owner-occupied but is to be sold after the house is built.
[*]How much equity do you want to invest in the house project? all

Total income and expenses:

[*]Total income: currently €7,650 net / from 2024 at the start of the construction project €9,600
[*]Total expenses: €4,500
[*]Balance: currently €3,150

General information about the property:

[*]How large is the plot? approx. 575 sqm2
[*]What are its dimensions? approx. 25 m x 23 m
[*]New build, old building (year built), house type? new build planned
[*]Garages? double garage
[*]How large is the house? approx. 180 sqm2

Construction or purchase costs:

[*]Plot costs 297,440 (fully developed)
[*]Construction costs €540,000
[*]Additional construction costs 25.000 €
[*]Outdoor facilities/terrace, paths, garden design, fences etc... 30.000 €

[*]Plot costs: 297,440
[*]Development costs: fully developed
[*]Additional acquisition costs (notary, court, property transfer tax, broker) €19,334
[*]Construction or purchase costs (incl. architect, structural engineer): €540,000 (estimated)
[*]Additional construction costs (e.g. house connections, soil surveyor, construction power etc.): 30,000
[*]Outdoor facilities/terrace, paths, garden design, fences etc...: 25,000 €
[*]Total costs: approx. €912,000

Other costs:

[*]Kitchen costs €45,000
[*]furniture, lamps, decoration €20,000
[*]Miscellaneous / buffer 50,000

Cost summary:

[*]Total costs: approx. €1,030,000
[*]Deductible equity: 350,000
[*]Financing amount: €680,000

Is this cost breakdown for the house realistic? Is such a project feasible with our financial means or should a smaller size (for example, 160 sqm2) be built instead?

Thank you in advance for your assessment.

Hello,

Buying land is OK, building in 2024 a lot can still change. You would apply for financing in 2023/2024 anyway. But basically, I would discuss it with your house bank. They know your business best.

House costs for the desired options will rather be between 600 - 650 K€. The question is why wait? Even with your salary + parental allowance, you will easily manage the financing. The problem later is: - higher construction costs - probably higher interest rates.

I would also raise the pure costs for the house to 600,000, and I strongly doubt that you will get away with 25,000 in earthworks with a basement. I would rather lean towards 50,000 there.

I would also raise the pure costs for the house to 600,000, and I strongly doubt whether you'll get away with 25,000 earthworks including the basement. I would rather aim towards 50,000 there.

I have read it 3 times now and find nothing about a basement *QuestionMarkOverHead*

Income and asset situation:

[*]What income do you have (gross/net)? me: 7,650 / her: from 2024 approx. 2,200 net
[*]How much child benefit is there? 219 € – but it should not be considered.
[*]Other transfer payments like parental allowance, sick pay, etc.? no
[*]How much equity do you have? 350,000 € in a property currently self-occupied, but to be sold after the house is built.
[*]How much equity do you want to put into the house project? all

Total income and expenses:

[*]Total income: currently 7,650 € net / from 2024 at the start of the construction project 9,600
[*]Total expenses: 4,500 €
[*]Balance: currently 3,150 €

One thing puzzles me, though. With such high income, you have exactly 0 equity? So “only” the property. Also, the costs seem very high. As a managing director, the car will surely be eliminated, since you have a company car including a fuel card. That removes a big item. Probably the 17-year-old child is still financed and also the ex-wife? Sorry for the direct questions, but this is not unimportant for assessing the financing possibility.

I have read it through 3 times now and find nothing about a basement *QuestionMarkOverHead*

Give it all, by the fourth (or at the latest fifth) time you'll definitely find it. ;) A morning hidden object picture! (It's there, I've checked again.)