Is building a house feasible with my budget? Or should I give up the dream?

Hello everyone,

I really appreciate the forum, have read a lot, and the feedback comes from practical experience and is unvarnished. Thank you for that. That’s why I’m posting my question here, to ask for advice.

I am currently in a dilemma with my dream of owning a house. First of all, I am quite a cautious person who prefers to avoid financial risks and calculates everything a hundred times over. I have been keeping a household budget for almost a year now to avoid overestimating myself. On average, I have €800 left over per month (after deducting rent of €1400) for my project. My monthly net income is around €3100-3200. During this time, I have lived quite normally, without restrictions.

I own a plot of land in a good location, without any remaining debt, which I estimate to be worth at least €100k (a conservative estimate).
My equity amounts to about €60k, but at least half of that should remain as a buffer.

Very roughly asked, is it possible to make something happen with this?
I was actually quite optimistic about it. But the currently steeply rising prices and responses to inquiries, at least from prefab house providers, give me a very different impression.
My idea was actually to build a turnkey house, except for painting, flooring, 110 m2 of living space, 2 full floors, simple square shape, no basement, no dormers, balconies, projections, normal standard by today’s standards, no smart home or anything like that, with a slab foundation for significantly under €300k. So a price per square meter of around €2300-2500. Isn’t that doable nowadays?

So that with incidental costs such as earthworks, connection fees, architect fees, paving the access road, etc., the total volume would not exceed €350k. Furniture, kitchen, etc. are not included.
I set this amount as a limit and trusted myself with my savings rate.

Unfortunately, it no longer seems to me at all that I can get something for that. Do you confirm this? Or is there still some hope?
The house is to be built in RLP.

I am currently living cheaply!! renting, sometimes I wonder why I am driving myself crazy day and night, considering selling the plot and living a nice life. But then there is that spark again that just won’t let me go, that doesn’t want to give up the dream.

Can you give me advice?

With a lot of personal effort, it will probably be possible. However, the bank alone will not give you the money. They want security that you alone cannot provide. My opinion. You haven't written anything about your age yet…

In advance: didn't your thread actually belong more in the financing section (even though I wouldn't have come across you there, but that doesn't have to be a bad thing)?
You already own a plot of land - did you only inherit it or did you buy and pay it off yourself (which would be a plus for your creditworthiness)?; and: what would be allowed to be built on it?

My idea was actually to build a house, turnkey, except for painting, floor coverings, 110m2 of living space, 2 full floors, simple square shape, no basement, no dormers, balconies, projections, normal standard for today, no smart home or similar, with a slab-on-grade

That sounds largely like reasonable and down-to-earth demands. Rectangular shape without frills is good, but square is rather bad, and two full floors are not worthwhile. At this size, you are on the borderline between a "bungalow" and a "one-and-a-half-story house". What does the plot say about that (total area, floor area ratio / floor space index)?
If you can do it based on the plot, then possibly even build as a "bungalow", otherwise as a "one-and-a-half-story house". If you instead choose a "city villa" plus square floor plan and worst case add a single-flight straight staircase on top, you end up with 140 sqm (to have exactly as much space as 110 sqm without these three space drivers).

If I were alone, I would take a closer look at the Tiny-House approach. If I expected to live in the house as a couple, I would find it worthwhile to look into vacation home floor plans. If the possibility of starting a family were on the table, I would reconsider my expenses and keep a low profile without an earning partner.

The critical point is certainly the issue of construction costs. The stated price range of under €2500 per sqm is often hard to achieve today. I would look less at the big companies and more at smaller businesses from the region. There, tens of thousands of euros for a show house and sales commission can be saved.

I see fewer problems with financing now. If you manage to stay within the budget of €350k for the house and contribute a plot of land worth €100k, then you have already put in more than 20% equity. You should be able to find a bank that finances this for about €1500 monthly payment. Although this is above the recommended 35% of net income, I still consider it manageable if you compare it with the current €1400 rent plus €800 savings rate. Financing on my own was never an issue for me, and the banks have always calculated much less conservatively than I did myself.

....if you compare the previous €1400 rent plus €800 savings rate.

I understood it a bit differently:

Hello everyone, On average I have €800 left per month (after deducting the rent of €1400) for my project.

€1,400 consists of €800 savings rate + €600 rent. So €1,500 loan costs would definitely be too much. Or does the OP actually pay €1,400 rent alone??