New Construction: Assessment of Our Project

Hello everyone,

we are currently considering starting the house construction. The trigger for this is a plot of land that has been made available to us. I get quite dizzy with the high amounts (especially the loan). Therefore, I wanted to get your opinion on our situation. Basically, hardly any personal contribution is possible.

General information about you:

[*]Who are you? Couple
[*]How old are you? Both 25
[*]Are there children? No
[*]Are children planned? Yes, two, around 30
[*]What do you do professionally? [B]Employed engineer (m), civil servant (f)[/B]
[*]How many hours do you work? Both full time

Income and asset situation:

[*]What income do you have (gross/net)? 2400 € (m), 2000 € (f)
[*]How much equity do you have? [B]120,000 € + plot (80,000 €)[/B]
[*]How much equity do you want to invest in the house project? All

Total income and expenses:

[*]Total income 4,400 €
[*]Total expenses 1,500 € (since no rent, no utilities)
[*]Balance 2,900 €

General information about the property:

[*]How large is the plot? Approx. 650 m2
[*]What are its dimensions? Approx. 25 m x 25 m
[*]New build, old building (year of construction), house type? New build planned
[*]Garages? Double garage
[*]How large is the house? Approx. 150 m2

Construction or purchase costs:

[*]Plot cost 80,000 € (fully developed, already owned)
[*]Construction costs 350,000 € (turnkey, including interior finishing, floor coverings…)
[*]Additional construction costs 15,000 €
[*]Outdoor facilities/terrace, paths, garden design, fences, etc.… 20,000 €

Other costs:

[*]Kitchen costs 15,000 €
[*]Furniture, lamps, decoration 10,000 €
[*]Miscellaneous / buffer 10,000 €

Cost summary:

[*]Total costs 80,000 € (plot) + 420,000 € (house all inclusive) = 500,000 €
[*]Deductible equity 200,000 €
[*]Financing amount 300,000 €

Since certainly quite some time will pass until the start of construction (at least 1 year), more equity can certainly be saved by then.
Thank you very much for your assessment.

Best regards
Sebastian

Because of a measly 300,000 loan, you don’t need to get dizzy. You have good incomes that will still increase significantly. The project has a very good foundation.

I am an amateur, but to me it also sounds good. Solid income, no children planned for now, high equity. I wouldn’t call €300,000 trivial, but it should be manageable for you. Stay grounded during the construction and don’t throw money away pointlessly on an oversized house with many extras, then it will work out well – but also start thinking now about how you will manage the times with children (parental leave, daycare costs, income losses due to a possible permanent reduction in hours of one partner because of the children, etc.) and whether you will still be able to comfortably afford the installments or whether you may have to reduce the repayment – I would already consider this when signing the contract because providers offer different options regarding free repayment adjustments, etc.

I’m curious to hear what others with more expertise say about this.

I get quite dizzy looking at the high amounts (especially the loan).

It's just a number. You get used to it quickly. More interesting than the debt amount is the monthly installment. This should be very manageable with the equity, but not too high for the parental leave. You could already make a rough calculation. Overall, your situation is excellent: plenty of equity, solid income, good jobs, and even a plot of land available. A truly optimal start. I also like the cost calculation. This way your construction project can start relaxed.

You don't have to get dizzy over a measly 300,000 loan. You have good incomes that will still increase significantly. The project has a very solid foundation.

measly is a good word

but yes, it fits so far.

The "läppisch" referred on one hand to the young age, plenty of time to pay it back. Likewise, 300,000 as a loan amount for a single-family house is very good in current times. I know many who have taken out 500,000 under similar conditions.

Therefore, all lights are green.