Is building a semi-detached house sensible despite low equity with a long loan term?

Middle Franconia is so beautiful and large, and if you are not completely tied to a specific location, there are certainly other nice spots. The property is simply too expensive for your finances, so move a bit "to the countryside" and build yourselves a nice single-family house there.

So first of all, I don't find the price per square meter for the N-FÜ-ER area unrealistic. In some nice suburbs of ER, we are now at €1000/m2. In Nürnberg Rehhof there is currently a semi-detached house built in 1998 with 250m2 of land and 160m2 of living space for €750K (Immowelt 2PCQZ43). The house price also seems very low to me in your calculation; I would rather expect >€450K in this region, so a total budget of at least €800K. Your income is good, even in the "with child" scenario €6000 net is decent. The problem is the relatively low equity, although here in the forum the statements often range between "everything I have" and equity for the property purchase with a silent reserve for furniture, kitchen, and other "special cases." I heard the latter a bit from you... Your wife will be a teacher, right? Civil-servant status in September then? I don’t know how it is in Bavaria, but in BW there were or are very cheap and long-term loans for civil servants. Maybe it’s worth waiting until September, or buying the land now and then financing the house with a civil servant loan. A teacher couple from my school days already built a house fully financed in their first year of their job. As an engineer, you could only shrug. Otherwise - well, you are two high earners. If not you, who should be able to afford a semi-detached house?

Hello,

now I had to register myself after a long passive reading phase just to encourage you a bit.

Whether there are still costs waiting at the house or not can be better assessed by others than me.

But since I am in a similar situation: All the demands for "20-30%" equity come from times with higher interest rates. With your salary, you should also be able to manage the above-mentioned "2700€ incl. additional costs." At least if not one partner wants to stay completely at home because of a child, and the other also reduces to 70%. Calculate it the other way around: How much does the same living space of the same quality cost in rent? >1500€ cold rent I would estimate now. Additional costs come on top of that - and you should still put a few hundred euros aside for retirement savings. That is then not so much less than the 2700€. As long as the 30-year interest rates currently cost as much as the 15-year ones, the risk remains – but it is manageable.

Sure, it can also go wrong: (God forbid!) a disabled child, parents in need of care, an accident, burnout or divorce. But as long as the value of the property increases, you just have to slowly sell it and buy something smaller/more suitable. Especially because the conditions change then, e.g., one salary is lost = one has to commute less = save on childcare = living further out is okay = cheaper.

In this forum many people are building their absolute dream house (I am jealous ) and can under no circumstances imagine ever leaving it. But if you think a bit more pragmatically, you can simply sell a house, painful as it may be, if really a nasty combination of misfortunes hits you.

In that sense,

your new comrade BigFoot

PS: Don’t worry, the next posts will be more technical

Thank you for your answers so far. We know that this is not exactly an optimal financing. Honestly, I was a bit surprised by the many "too expensive for you" responses – but maybe that helps to keep us a bit more grounded. Since it has been mentioned several times now, a quick follow-up: Why would one generally not put a cheap house on an expensive plot of land? We don’t live there to show off, but because this beautiful location unfortunately just costs this much here.

Hello, you have a good income, no question about that. I assume the situation is that you will have children. €6,000 income, €2,150 loan plus additional costs: €2,700 for at least 10 years. That means you have to save money for the KfW loan. From what? Nearly 50% of the income goes away. It’s all too tight for me. Also the disproportion between house and plot. Aren’t there any existing properties?

Correct, children (at least one child) are planned in the next 2-3 years. There are existing properties, but they are not very interesting for us: Many houses are from the 1970s and are regularly listed at €500,000 and above. Including renovation costs, you wouldn’t save much. Even developer offers with small gardens (plots smaller than 230 sqm) are over €600,000. It always sounds crazy, but this is unfortunately how it is here in this area, mainly because Siemens, Adidas, Schaeffler, Bosch, and other large companies act as drivers of house prices.

The low equity suggests from a distance that you either lack particular household discipline, have only recently earned these amounts, or had something else to pay off.

The low equity mainly comes from the fact that we had several expenses in the last three years (car purchase, we had to renovate our current apartment and install a new kitchen, wedding) and only for about 1.5 years have had the current income in these areas (previously significantly lower at about €3,000 net). We notice that since our wedding in mid-last year, we have been able to save over €3,000 monthly and still have more than enough money for our monthly fixed costs (as well as retirement provision). Therefore, we were actually quite optimistic that we could manage such an investment.

Why does one generally not put a cheap house on an expensive plot of land? We don’t live there to show off but because this beautiful location unfortunately simply costs that much here.

Forget the comment. People don’t cut potatoes with a knife either (and there used to be a logical reason for that)

We notice that since our wedding in the middle of last year we have been able to save over 3,000 euros monthly and still have more than enough money for our monthly fixed costs (as well as retirement provision). Therefore, we were actually optimistic that such an investment could be managed.

See, it is possible.

Here in Middle Franconia, prices have unfortunately risen extremely. We live - ideal for our needs. Outside the town, 1 km to the highway, bus stop around the corner, train station and S-Bahn are 2 km away. In the town, there is pretty much everything, including the hospital and high school. We have nature practically on our doorstep, I only have to fall over three times and I'm in the forest. Opposite, three semi-detached houses are being squeezed onto a plot of about 1,300 sqm - solid, completely without frills, in my opinion poor floor plan, bad orientation - with 220 sqm base, around 500,000 euros are asked for a 150 sqm half. And even these will find their buyers. At present, it is really almost crazy what is being built and sold.