Is financing representable like this?

Hello everyone,
my wife and I have found our dream house. A detached house built in solid construction according to Kfw70 standard, built in 2000. 210 sqm living space, of which 60 sqm in the basement can be separated as a granny flat. Only the installation of a shower bathroom would be necessary for this. All connections for this are already laid.

A short introduction about us: We are both 29 years old, he has been fully employed with a permanent contract for 10 years. She has been working part-time for 3 years in the public sector.

Since we have not been dealing with the topic of construction financing for very long, we would like to get some opinions here on whether this is even possible.

Here are the key data:

Purchase price: 275,000 Euro
Ancillary costs: approx. 25,000 Euro
Equity: approx. 50,000 Euro (varies somewhat depending on the form of investment)

Monthly income him: 1650 Euro net
Monthly income her: 700 Euro net
Allowance from the parents-in-law: 500 Euro per month
Total makes: 2850 Euro per month
In addition, after the purchase, rental income from the granny flat (conservatively estimated): 250 Euro cold rent.

Monthly expenses:
550 Euro warm rent (will cease after purchase)
450 Euro car financing (still running exactly 5 years, no balloon payment)
400 Euro shopping (food, clothing, other ongoing needs)
500 Euro car costs (diesel, insurance, tax, maintenance)
150 Euro Riester pension contract
100 Euro electricity / telecommunications / [GEZ]
100 Euro other insurances (disability insurance, household contents, additional health insurance)
100 Euro miscellaneous (going out, occasionally a CD, etc.)
Total: 2350 Euro per month
500 Euro surplus monthly

The surplus is currently being saved completely. We do not indulge in great luxury, vacation for us is an extended weekend per year and otherwise staycation or visiting parents / parents-in-law.

Here are our thoughts on financing:

200,000 Euro via a Wohnriester loan
75,000 Euro via the Kfw home ownership program 5 years interest-free (after that the car financing will be gone and these 470 Euro will be free)
We would cover the ancillary costs and the conversion of the granny flat with the equity. If something remains afterwards, we would like to keep it as a reserve.

The money available for the house is calculated as follows:

550 Euro rent
150 Riester pension
500 Euro surplus
250 Euro rental income from the granny flat

Total: 1450 Euro.

From this the operating costs of the house (according to the owner approx. 260 Euro monthly) and the loan would have to be paid.

Is all of this realistic? Or are we taking on too much with a property in this price range?

My current impression: It will be tight, but could be doable.

Best regards
Starlight82

So I also believe it will be tight. We keep recalculating and I can only advise you.

For the sake of your future, calculate only with what you have (so leave out the 250 € rental income). Because the apartment must also be rented out. If it is, fine. Then put that aside because as a landlord you also have to carry out repairs from time to time.

Otherwise, the numbers (especially insurance, GEZ, ...) seem very estimated to me.

As a tip: Take some time. Open an Excel spreadsheet and go through the bank statements of the last 12 months. Then sift through these and list all regular expenses. I was shocked at what adds up.

I am in the same situation and think you are overextending yourselves. We have €3600 net, €60,000 equity, and for us, the €215,000 for the house was the pain threshold.

a) don’t count on the rent - if the money _additionally_ comes in, it makes your life easier, but you shouldn’t see it as more than that.
b) 150 Wohnriester is yearly, right?
c) can you assume that the €500 from the parents will flow in for the next 20 years?

Have you calculated how long you would be paying off? 5 years without repayment cost money!

Edit: €260 ancillary costs are quite low. We still live in an energy-saving house from 2009. Mid-terrace house – so even less energy costs. We pay €300 all-inclusive in addition to the cold rent.