Loan amount - What is achievable?

Hello everyone,

we are a family of four. I (29 years old) work full-time and my wife (28 years old) part-time, both employed in the public sector. My net salary is currently about 2300 euros and my wife's is around 1100 euros. Additionally, we receive 2 x child benefits (children are 2 and 7). That means we have a net income of about 3800 euros.
In addition to our income, we have 2 condominiums. One is currently rented out for 550 euros cold, with a monthly installment of 300 euros and the remaining debt after the fixed interest period (2028) is still 100,000 euros. We currently live in the other apartment ourselves, which would bring in about 750 euros cold if rented out. The monthly bank installment here is 145 euros and the remaining debt after the fixed interest period (also 2028) is about 50,000 euros.
Of course, with the apartments, taxes still have to be paid on the rent and reserves must be formed for vacancies or renovation work.

My question now is, what monthly burden is reasonable in our income situation?
Is there a rule of thumb for how much should be left over or how much of the rent should be set aside for defaults/renovations?

The question first is, what are you planning? I guess you want to buy a house, otherwise you wouldn’t be asking. For that, you’d first need to know, what other equity do you have? Otherwise the discussion is pointless. You’d also need to know what the apartments are worth. I find the monthly installments you’re paying extremely low, especially for the apartment you live in yourself. You’re barely paying down anything there and will never get below that. Anyway, you’d have to carefully weigh the ratio of rental income to the value of the apartments. If you’re not already fairly well equipped with equity, I wouldn’t want to take on a third loan, but rather sell the apartments. Otherwise, you won’t get a big loan out of it. Income of €3800 (+ approx. €1000 rent, which can also sometimes fail) - €445 installment - taxes - reserves and then still €150,000 remaining debt in 10 years, I don’t see much leeway.

I would go to a tax advisor and reverse the installments. Since the interest on rented apartments is tax-deductible, I would not repay anything for the rented apartment and make sure that the owner-occupied apartment is paid off in 5-8 years. Then you can consider buying a house.

For landlords, liquidity beats profitability. You should therefore maintain a buffer that covers at least 6 months of rent loss. Reserves for renovations should be formed at about 1 - 1.50€ per sqm and month.

Regarding your other question: YOU have to decide how much you need per month after deducting all fixed costs to manage that and build reserves. We can't know how you are positioned in that regard. If you find it difficult to assess yourselves, keep a household budget book for a while.

hmm okay, the rate for the apartments is deliberately set so low because the plan was to rent them out and a) you can deduct the interest on rented apartments and b) vacancy is easy to bear. The money we saved this way we then set aside for our house project. We have therefore matured a building society savings contract (100 k building society sum, 50 k paid in), saved about 30 k in the instant access account and have already partially paid off a plot of land (remaining debt about 40 k).

But in general, would you prefer not to take out another loan as long as the others are still running? Another consideration was to sell the apartments (value about 120 k and 160 k) and then only need a "small" loan for the house, but thereby also give up the monthly rent.

These are very important pieces of information if you can still contribute a significant amount of equity. This definitely affects the terms and thus also the possible total amount.

The less risky option is definitely if you sell the apartments. More equity, no risk (rent default, renovation). Has the current debt already been deducted from the value? Otherwise, there is not much left.

Otherwise, one apartment is barely self-sustaining, the other (now yours) might maybe contribute a little net income, but you can't really rely on that, it's always nice to have...