Is ownership possible? Apartment / small house

Good day,

we (both mid to late 20s) have our first financing consultation next week (initially quite non-binding, we will bring along 2 properties that we could imagine, but only as examples for now). However, I wanted to clarify in advance whether we need to prepare anything else and whether our plan is even feasible. I am a bit worried that professional advisors, who make money from this, might sugarcoat things. We definitely do not want a shaky financing that will keep us awake at night.

The key data:
We currently rent a 3-room, 65 sqm renovated old building apartment + cellar on the outskirts of Berlin. The lease runs for almost another year, and we definitely want to continue living in the apartment until then.

840€ warm (incl. parking space)

Afterwards, we are slowly considering something of our own, as we are planning to have children at some point in the next few years (nothing concrete yet) and the rents in the area currently seem unaffordable for something bigger compared to what you get and the fact that you would then be paying the mortgage for someone else.

In general, we are not dissatisfied with the size at the moment. We like open living on a rather small space. Everything could be a bit bigger and one more room would be missing in the long term, but perfect for us would be about 85-120 sqm. It should not be bigger anyway. We can also imagine both a condominium and a small house. However, since we place a high value on the charm of a property and we cannot do much with new builds, we would like to look out for an existing property that is already a bit older.

Since my partner has a crafts company with his father and they do a lot of interior finishing, insulation, drywall, bathrooms, facades, window installation, etc., it would of course be optimal for us if the property still requires renovation.

Now to the finances:

Income (She) 2700€ (permanent, IT sector)
Income (He) 1550€ (permanent, crafts/family business)

Expenses:

Rent: 840€
Electricity: 53€
Internet & phone & GEZ: 55€
Mobile phones + contracts: 20€ (his company phone)
Mobility: 63€ (his company car + a train ticket)
Leisure: 148€ (Spotify, Netflix, gym, etc.)
Workshop: 130€
Cats: 70€
Insurances: 26€
Household flat rate: 1000€
Account management: 9€

1,832€ remain. Of which since this year 1,500 euros are saved, and the rest goes to vacation, larger miscellaneous purchases, flights to family.
Before, we hadn’t really been able to save much as I earned significantly less a year ago and we spent the last year assembling our inventory to be completely satisfied with it.

So next month we'll only have 10,000€ in equity and want to raise it to 20,000€ by the end of the year to eventually be able to cover the incidental purchase costs.

So far, we have found a condominium (approx. 90 sqm) in an old Art Nouveau villa. But it is VERY much in need of renovation.

Cost approx. 115,000 although apparently one could already negotiate down to 100,000 as a lot really needs to be done and you first need the imagination to even be able to picture it, so the interest is not that high (the property has been there forever).
Renovation costs would be another approx. 100,000 here, although we could do a lot ourselves. Are there banks (this apparently varies from bank to bank) that credit particularly a lot of the own labor as equity?
Another property (which is not perfect in terms of location for us, but comes close to what we are looking for) would be a small detached house with 85 sqm (700 sqm plot - we actually don’t really need that much) from 1930, however a lot has already been done in recent years (new heating, electrics, roof & insulation new, etc.) for 200,000. Since much has already been done, the effort would be limited to a maximum of 250,000. The question here would be what banks recognize as value-increasing measures and what they do not.

Would something like this be basically doable? Or better to keep saving? We know that the equity is very thin, but hope that if we cover the incidental costs and also contribute some own labor, we can still get a reasonable interest rate? And have we forgotten to list anything in the expenses?

Thanks in advance for helpful answers :)

Are your earnings gross or net? Without going into detail about your project, the question arises:

What happens when a child arrives? Your wife's income disappears and your income is unfortunately not very high.

Thank you for your reply :) And those are very valid questions that we have already thought about as well, I just didn’t want to write even more and scare off all the readers right away.

Regarding the questions:

Net.
And I am the woman and I will continue working after the maternity leave period (please no fundamental discussion about this now, it is definitely possible despite breastfeeding and since I can work very well remotely due to the IT industry – my employer is positive about it. Additionally, my partner is very, very, very good with children, probably better than me and would be happy about it). He will then stay at home during parental leave, and a daycare spot is already secured through the grandmother, so that afterwards we can both continue working calmly.
Since his company also always has a lot of weekend work, he could also work a part of that there while I can fully concentrate on the child. But the financing should not look like, for example, that we are forced to work alternately and hardly see each other anymore. That was exactly what I meant. If it doesn’t work out, then we would rather save longer and postpone everything.

But yes, definitely a factor we have to calculate in (also the daycare money then). Since we will definitely be paying off longer than children waiting on themselves. Would it therefore not be better for us because of the still young age to take a lower repayment of 1-2% with the right of special repayments? Or are there banks that reduce repayments during the parental leave period? But these are definitely also questions that I have noted down for the consultation appointments.

You can best assess your lifestyle yourselves. The fact is that the early period with a toddler puts every relationship to the test. It is advisable not to let the renovation period and the pregnancy/baby phase coincide. The temptation might be there since he will be at home anyway. Didn’t you write that you plan to do that? I wanted to mention it anyway. Otherwise, his salary roughly corresponds to your savings rate, plus parental allowance... 1000€ installments should always be manageable. In addition, the expertise gained through your own work. Sounds very solid from a distance. Best regards to Berlin.

I wrote that a bit unclearly. His salary is replaced by parental allowance. So you can calculate your cold rent plus x for the annuity. 1000€ sounds reasonable and should fit the loan framework. Here you need to set a guideline for the financing consultation.

What does the notice period for your rental contract look like after one year? 3 months?

Thank you for the reply :) From a distance and objectively, I already find it very good as a rough framework. That way I don’t have to be afraid of being sold something that would cause us problems. I also came to about 1000€ for the installment for myself. Regarding additional costs, we would have to look into it, but I estimated about 500€ (of course, it depends on the property).

And exactly for that reason, we are considering buying "in the near future," so that we basically have a comfortable nest ready when the baby comes, especially because baby + work is already stressful, and if you want to do a lot yourself on the property on top of that, it sounds like a massive double burden on the relationship. ;)

The thing with the notice period is a very good question, I will check it out this evening directly. Do you know what is allowed there? Would 2 more years theoretically be possible? Our current contract is for 2 years, and one year has passed. Because then you really have to decide what to do. Moving again just to buy something in the next few months also only costs more.