I am getting a plot of land as a gift. How do I finance the construction?

  • Erstellt am 2013-05-22 19:03:17

Riftayl

2013-05-24 11:17:02
  • #1
I would get the loan in the amount of €250,000 with a monthly installment of €1,000. As mentioned above, I have equity of about €35,000. I actually do not want to put this money into the house construction; I use it as a reserve in case of a rental default. In an emergency, I can easily save €300 from the €1,500 I have per month. Of course, I also want to maintain my standard of living. My job is secure as well. Regarding my family, I perhaps should have described in more detail: No one says that I should abandon my project. Everyone just wants to interfere. My grandmother assumes that I want to live in the house myself, which I cannot afford. Another part of the family owns various businesses or works in construction themselves – they would prefer to work "at a friendly price" and take on some of the tasks for me. Since we are not a picture-perfect family and frequent disputes arise, I believe I have to do my own thing so that no one can meddle.
 

Riftayl

2013-05-24 11:20:40
  • #2


What do my parents say?
How much money would it cost me?
 

Riftayl

2013-05-24 12:02:16
  • #3


I am dependent on rental income. Without rent, I could pay for about 3 years.

In the event of my grandparents’ death, my compulsory portion would be so high that I could pay off the house with it. The only downside is if my grandfather lives to be over 100 years old.
Should the worst case happen, of course, I would receive support from my family. So the project won't completely ruin me. If necessary, I'll have to sell the house.

I also don't want to rush into something completely blindly that I have no knowledge of. That's why I'm going through everything step-by-step that I have to take care of before I even start building.
Land: Still has to be transferred to me.
Bank: €250,000 at €1000 per month - done.
House construction: Plan is finalized, companies are finalized, costs are finalized.
Garden, sewer connection, terrace, garden: Plan is finalized, companies are finalized, costs are finalized.
Rent: How high should I set it?
Insurances: Fire protection, elemental insurance, legal protection insurance - tenancy law - all still needed.
Taxes: How much will I have to pay from the rent? I don’t know yet either.

I am aware that I still have a long way to go. That’s why I consciously said I will start building at the earliest in 2014.
I would be very grateful if you could help me with the missing information.

Regards :)
 

Musketier

2013-05-24 12:21:48
  • #4


Building a single-family house to be able to extract additional money from it monthly will not be possible. As already mentioned, you also have to pay taxes on the profits (if any). If you initially make losses from the rental, you can’t even save much on taxes. What about repairs to the house? What about non-recoverable ancillary costs? What happens after 10 years when interest rates have risen? With 1000€/month, you haven’t paid off much yet.

I assume that you don’t want to stay single forever. What if you want to support a family with the 1500€? Then there won’t be 300€/month left.

If I were you, I would first see how life progresses. At 24 years old, nothing is decided yet regarding how things will develop in your private and professional life. You can always build later. Maybe then also for your family.
 

lastdrop

2013-05-24 12:35:24
  • #5
Agree with Musketier. At that age, I wouldn’t tie a pain in the neck to my leg if I don’t even want to live in it.
 

perlenmann

2013-05-24 12:37:41
  • #6


I also consider your plan very risky. But costs are NEVER fixed in construction. Even if you have a fixed price for many things, something always comes up!
But still, I think rental income can be offset against the loan for tax purposes. Ask a tax advisor!

But the most important thing: What do you get out of it? Building a house is no picnic. What do you get out of it if in the end it doesn’t belong to you? Calculate what happens after the 10 years fixed interest period?
 

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