House construction. Sell or rent out the condominium?

If a condominium (depending on the location) has already experienced a significant increase in value, I would bring the property into play as collateral with the bank. This could significantly improve the terms and thus result in better interest rates. Once the condominium is paid off, increase the repayment and additionally service the house with the income.

Paying off a rented property and the owner-occupied home only later? That makes no sense at all from an economic/tax perspective.

That's why I also said: Keep repayments to a minimum and let the tenants pay it off. Very relaxed. And this is about additional taxable income, while you are selling an additional cash flow source for many years. Doesn't anyone see that a potentially large increase in value is supposed to give way to a few euros less in taxes?

paying off a rented property and the owner-occupied home only later?
makes absolutely no sense economically/tax-wise.

What makes no sense?
Financing and paying off the property through rental income? Then please explain to me what is senseless about that.

Your suggestion was to pay off the condominium before using the income to cover the liabilities of the owner-occupied property.
It is more tax-efficient not to pay off the condominium further / as little as possible and to invest the free cash flow in the owner-occupied property.
The reason is simple: You cannot deduct the interest for the primary residence, but you can for the condominium. The amounts are not large, but still.
Specki's suggestion is a great way to solve the issue if the situation allows for this flexibility.

The problem with the property is that your rent will easily be around €1,000 including the parking spaces.
That generates income of about €12,000, plus a depreciation (AfA) of nearly €4k (200k * 0.02).
This leaves a profit of €8,000 that must be taxed, I simply assume 50% to make the calculation easier. That results in a tax back payment of €4,000 per year or €333 per month.

In fact, when your apartment is paid off, you will have just under €700 left over; you wouldn’t need to deduct allocable costs like the administrator and reserves now, so just under €600...

You could then either put this €600*12 = €7,200 as a special repayment annually into the house or reduce your monthly burden...
You must not ignore the future development of the property. Today €380k, in 10 years it could be worth €480k. Then I would have paid taxes, but after tax I generated a value of €7,200*10 years = €72k plus €100k appreciation.

Against this I have to calculate how much interest I would save on the house in 10 years if I put in the €380k directly.
You can practically do this.

€600k at 1.5% financing = €90k (yes, no repayment included here, so simplified)
€220k at 1% financing = €22k (also without repayment here)

This results in an additional interest expense of about €70k.

Tendentially I would say sell, because tenants can also be annoying, etc... and the advantage here really only lies in the value development, which is a crystal ball.

This is a simplified calculation before someone from the corner jumps in here ;)

Specki's suggestion is a great way to solve the issue if the situation allows for this scope of design.

Yes, that would really be a good idea. "Unfortunately" we are both owners of the property.