Is our life project of a semi-detached house realistic?

Hello everyone,

I would like to share my idea here with a request for honest comments.

We (my wife and I) are considering building a house in 3-4 years. Since we would like to save costs (who wouldn’t want that?) and at the same time have security for old age, we came up with the idea of building a duplex and renting out one half.

The following considerations:

1. Plot of land for up to 150,000€ including development
2. Duplex shell construction up to 180,000€ by a German construction company
3. Complete interior finishing up to 120,000€ as follows:
- 4 craftsmen from abroad (Poland, partly family, with experience in construction) for about 1,500€ gross per month (I plan 2-3 months for finishing)
- Expensive materials (such as tiles, windows, doors, etc.) I would also like to buy in Poland, with high quality
- Plumbing I get from a good friend who works in a German plumbing wholesale company at purchase price – I would also choose higher quality products here
- currently I am thinking about a micro CHP system
4. Additional construction costs + surveyor approx. 50,000€

All in all, we would be at about 500,000€ for the finished duplex. Equity 80,000-100,000€. Rest KfW + bank. Our net income currently amounts to about 5,000€ without child benefits (3 children). We would build in Rösrath (near Cologne) with good infrastructure.

I could rent out such a duplex half for 1,200-1,400€ net cold rent.

Does this project make sense? Of course, these are only rough considerations. I would of course have to plan and list everything in detail to convince the bank.

Looking forward to your comments...

Best regards
Robert

With a semi-detached house, however, you only save on one wall, which does not need to be plastered or insulated. And also on the plot of land, if you were to build only one half.

The bank will view the personal contributions critically.

I think it will not be worth it, depending on how the financing looks.

I think you will build your house most cheaply if you build a single-family house, with a relatively small plot of land and use your equity fully for it.

Hello,

so if you can really rent out one half for at least 1,200 euros and have 100,000 euros ready now, I think the idea is not so bad. But I would consider whether

a) it has to be a semi-detached house or maybe a granny flat would be more sensible (lower rent or also lower costs) and
b) this kind of own work is really sensible/works or whether you put a little more money into it and have it built turnkey by a general contractor right away

I mean, if the project ends up costing 600,000 euros - 100,000 euros as equity and you get 800 euros rent, then you are probably looking at a rate of around 2,000 euros/month - rent = 1,200 euros (roughly estimated) - of course depending on the term! That is fantastic with a net income of 5,000 euros and a secure job, because you still have 3,800 euros + child benefit and salary increases left. But the own work you mentioned I would call "bold" and I agree with backbone23, who says the bank probably sees it that way too.

Just some thoughts...

This won’t work. Despite having 4 craftsmen in the family, I also wanted to do a lot myself, but no chance. The requirements due to the energy saving ordinance and all that stuff make a construction project so complex these days that you need people who know what they’re doing and do it every day. In your situation, the construction could take a good 3 years and might still be really “well” done afterward.
Expensive things like heating, etc. should not be underestimated; for that you definitely need the heating engineer again. The same goes for many other trades.

Then you end up with “bad” tenants next door and have to renovate extensively again a few years later. Why have your own house only to get “strangers” right next door again? From my personal point of view, a semi-detached house is a necessary compromise if you absolutely must have a house but financial resources are very limited. With such a good salary you can easily set up a little house somewhere alone and have your peace.

For investments, I’d rather choose an apartment in a very sought-after area of a city, have a property manager, and have no work with it.

Hello and thank you to all involved,

I should mention that I have a business. My wife is permanently and securely employed. However, since I am more highly qualified (IT sector), I should have no problems finding a position even if I give up my business. My wife and I are now in our mid-30s.

I would also consider a house with a granny flat, and I already have tenants for it - my parents. But renting out a granny flat to strangers later on (may my parents live long) seems much more problematic to me than a semi-detached house, right?

As long as I have a business, many tax opportunities open up for me. In addition, I have not yet made private provisions for my retirement, and it is slowly becoming time, hence this idea of the semi-detached house instead of a private pension insurance. Well - I would also take out a private pension insurance, but to a lesser extent...

Certainly, my plan also involves many risks - but NO RISK NO FUN! The risk of rogue tenants can never be completely ruled out, but can be largely minimized. For example, a friend of mine has a Bundeswehr officer as a tenant - so the risk should be very low.

With an investment of €500,000 and equity of about €100,000, the loan installment would be around €2,000 monthly at 3.5% interest and 2% repayment annually - under 2% repayment I am not willing to consider. Early repayment is also a prerequisite for me! Of course, several KfW loans and additional subsidies (e.g., for a micro CHP) are also possible.

These are, however, initial considerations that are still being optimized...

Thank you and best regards
Robert

Hello Robert,

However, since I am more highly qualified (IT industry) ....

In your profession, in my opinion, lies your fundamental misunderstanding ... building a house, in its trades, is not comparable to the "normalities" of IT; in software, you find many similar programs, but when building a house, you pay the price if standards are not adhered to => for example requirements of the Energy Saving Ordinance or the EEWärmG.

I will not comment on your price estimates;

but:

- 4 craftsmen from abroad (Poland, partly family, experienced in construction) for about €1500 gross per month (I plan 2-3 months for the expansion)

I do not want to dispute that these people know their trade, but you need two certified masters here for electrical and sanitary work, who will approve both trades. Who do you think you will find willing to put their name on a warranty for work they neither performed nor supervised?

What about compliance with the Energy Saving Ordinance => KfW 70 or below, which also includes insulation, for example? After completion of the construction project, the structural engineer (Energy Saving Ordinance verification) will calculate again to see whether the materials used are sufficient.

We would build in Rösrath (near Cologne) with good infrastructure.

The place where people are annoyed about having to have a GL instead of a K on their license plates. A beautiful and also expensive area; one of our most beautiful houses is located there.

I could rent out such a semi-detached house for €1200-1400 net cold rent.

That decisively depends on where exactly in Rösrath you want to build.

Rhineland regards