Land is in sight - Financing feasible?

2015-11-19 11:18:55

Hello everyone,

I am new to the forum and have mostly been silently reading for information so far. With the birth of our second child, our apartment in Frankfurt is becoming too small for my husband and me, and we want to move out of the city into our own home.

We searched for a long time for an existing property, which is very difficult right now in the Rhine-Main area. Hence the decision to build ourselves.

A bit about us:
We are both 30 years old, and I earn about €2,850 net in a secure job, while my husband is a stay-at-home dad. Unfortunately, due to past commitments abroad, we only have around €10,000 saved as equity. Currently, we pay a rent of around €990 (cold rent). Our repayment should remain within this range so that we still have enough for living expenses, retirement savings, and the children.

We could get a plot of land for around €140,000 in a good location. We want to keep the house (we haven’t decided yet whether prefabricated or solid construction) as cheap as possible through as much personal work as possible (craftsmen in our circle of acquaintances, etc.). We envision about 4 rooms with at least 100 sqm of living space.

Is this realistic, or do you think we should let the dream of owning a house remain just a dream? I just thought I’d ask the experts here before wasting a lot of time and energy...

Many thanks.
Sonja

Hello!

Rhine-Main has become very expensive. €140,000 for a plot must be very far from RM and/or the plot is very small.

€2,850 net + child benefit or is that already included?

How high is the current savings rate after paying off old debts?

How high are the childcare costs or does the husband take care of it?

So I see a very, very high risk in starting a build with very little or no equity. You have no buffer if something happens.

Better to save diligently, and see that the husband goes to work (that is his responsibility)?

2015-11-19 11:23:32

Hello.

Wow... thank you very much for the quick responses. The [Kindergeld] is not yet taken into account. We are currently setting that aside as a savings rate. At the moment, we are saving about €250-300 per month. As the previous poster already mentioned, the Rhein-Main district is very expensive and I still have to commute to Frankfurt every day. That means going too far out is no longer worthwhile for a cheaper plot of land.

I didn't expect the investment need for the property to be so high after all :(

My husband looks after the children, so we don't have any childcare costs. My husband will return to part-time work after parental leave and earns about €1000 net here.

2015-11-19 11:26:33

Hello.

Wow... thank you very much for the quick responses. The child benefit has not been taken into account yet. We are currently setting it aside as a savings rate. At the moment, we are saving about €250-300 per month. As the previous poster already mentioned, the Rhein-Main district is very expensive and I still have to commute to Frankfurt every day. That means moving too far out is not worthwhile anymore for a cheaper plot of land.

I wouldn't have thought that the investment needed for the property would be this high :(

My husband takes care of the children, so we have no childcare costs. My husband will work part-time again after parental leave and earns about €1000 net here.

then I would advise you to only start such a project when your husband goes back to work and you significantly increase your savings rate.

There probably aren't any interesting existing properties where you are? A larger condominium often works toooooo

2015-11-19 11:28:34

Unfortunately not. We have been looking for quite some time but especially here around Frankfurt am Main it is really almost hopeless to find something suitable and affordable for a family. We actually wanted to avoid [ETW] due to negative experiences with children in apartment buildings (our current neighbors already complain when the little one falls on their bottom while learning to walk and the noise carries through).

2015-11-19 14:20:14

Maybe build a townhouse? There are always new areas coming up here with us. A lot is happening towards the east (Hanau, etc.). I think the investment volume is smaller with a townhouse?

For your info. I also built here, the plot was actually 140,000€ (600 sqm), which is very moderate for the area here. Our total investment volume was now 450,000€ all in but without garage and without a basement. 150 sqm bungalow.

Never underestimate the additional costs and the landscaping. Even just "the essentials" cost a lot of money. For example, we first had to make the ground stable (cost an extra 15K). If you go in without a buffer, you'll quickly be at your limit.

2015-11-19 14:29:37

Maybe build a townhouse? There are always new areas popping up here. Towards the east (Hanau, etc.) a lot is happening. I think the investment volume is smaller for a townhouse?

Thanks for the tip. We haven't looked in that area yet, I will do some research there as well.

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Land is in sight - Financing feasible?

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