New construction with single-family multi-generation house - financing realistic?

Hello everyone – in advance, a heartfelt thank you for your time and your opinions

What is planned: We currently live in a mid-terrace house and the parents-in-law in a detached house. They are now retired / pensioners. The idea – we could currently acquire a building plot due to a tender based on social points and plan a new build in order to be able to bring the parents to us in 2-3 years (40 km away) and my wife does not want to drive that far 3 times a week – besides, we would all save double expenses and the children would also benefit from it.

General information about you:

[*]Ben + S
[*]38 and 36
[*]2x – 1 year and 3 years
[*]IT + nurse (still at home 1-2 years)
[*]Parents-in-law:
[*]74 and 69

Income and asset situation:

[*]3000 net + (2200 net but not counted) + pension 2100 + retirement pay 900 + 450 job of the mother-in-law (but this will cease after moving)
[*]Child benefit 430€ and parental allowance 230€
[*]“only the 2 houses” and building savings contract with 6000, 2x Riester with 4000 and 3000 each. Reserve account with 2500. Stocks, ETFs and cryptocurrencies 20,000. (But these should not be used)
[*]Goal: Sale of both houses in order to make a new one out of it.

Outstanding loans:

[*]Loan 800€ installment for the terraced house – outstanding amount 165k.
[*]Loan 750€ installment for the detached house – outstanding amount 65k

Real estate

Terraced house – current value 450 – 500k
Parents-in-law’s house – current value approx. 200 – 240k

Proceeds from sale and debts: Assets approx. 470k from real estate.

The remaining costs with everything included (incl. loan installments) are summarized:

B: Income 3100€ Expenses 2500€ = Remaining 600€
S: Income 650€ Expenses 480€ = Remaining 170€ (parental allowance without salary)
Parents-in-law: Income 3500€ Expenses 2300€ = Remaining 1200€ (excluding “food and petrol”)

If “everyone lives under one roof in 3 years” the parents-in-law’s situation looks different:
Parents-in-law: Income 3000€ Expenses 700€ = Remaining 2300€ (excluding “food and petrol”)


Future plan:

Plot (excluding incidental costs) 180,000

General information about the property:

[*]How big is the plot? – 500sqm no slope – nothing needs to be demolished.
[*]What are the dimensions? 26m x 19m
[*]New build
[*]Garages? Double garage with storage space
[*]Planned 230sqm incl. basement
[*]Future value: Thanks to a VERY well-known company building 600m away + 30%

Listing of planned costs including buffer:



Cost summary:

[*]Total costs 830,000
[*]Deductible equity - 470k from the sale
[*]Financing amount 350,000 / Maximum monthly installment of both parties 2500€ – my wife’s salary is deliberately completely excluded from the calculation.
[*]Special repayment “left open” – if more money is available it will be used for this. (actually 400 per month is planned here – but this is a buffer)

The house should correspond to a good standard. Various trades such as photovoltaics, plastering, etc. we want to award (to friendly companies – or parents-in-law of the family) to reduce the house price slightly.
The house price is currently a “turnkey house from Bien-Zenker – incl. all painting, flooring etc. works. (Calculated without extra costs for customization.) However, there are still various considerations here. Let’s leave the price as a “basis”.

Many thanks for your time and your opinions.
Regards Ben

to be able to bring the parents to us in 2-3 years

Is that your plan or is that your joint plan?

If "everyone is living under one roof in 3 years," the situation of the parents-in-law looks different:
Parents-in-law: Income €3000 Expenses €700 = Leftover €2300 (without "groceries and gasoline)

Even if everyone lives under one roof, there are still 2 households organizing themselves?!
As far as I can see, the in-laws aren’t even getting a kitchen? :eek:

I deliberately leave out my wife’s salary entirely from the calculation.

... but you are planning the pension?

Wow, I don’t know how needy your in-laws are, but I actually only know almost active and agile seniors at this age who still plan for themselves what they spend their money on.
Is your wife an only child?

Regarding your cost breakdown: I find it a bit confusing.

The remaining costs with everything included (incl. loan installments) are summarized as follows:

B: Income €3100 Expenses €2500 = Leftover €600
S: Income €650 Expenses €480 = Leftover €170 (parental allowance without salary)
Parents-in-law: Income €3500 Expenses €2300 = Leftover €1200 (without "groceries and gasoline)

If "everyone is living under one roof in 3 years," the situation of the parents-in-law looks different:
Parents-in-law: Income €3000 Expenses €700 = Leftover €2300 (without "groceries and gasoline)

and what is the question now? Build a house and rent the granny flat to the parents-in-law. But then rent must also be paid for the tax office to recognize it as deductible. The parents-in-law live rent-free but give you the proceeds from the single-family house? What about other heirs? Or should it become a two-family house and everyone owns property?

I see that I have landed in the right place. However, I did not expect the questions.

Here are the answers:

"Is that your plan or is that your joint plan?"
Yes, joint plan. Alternatively, the condominium will be rented out if "something comes up."

Even though everyone lives under one roof, there are still 2 households that organize themselves?!
As I see it, the parents-in-law are not even getting a kitchen? :eek:

Why no kitchen? Two households – but we take on a bit more organization because unfortunately, the two are not as fit anymore. In my wife’s family, people take care more than typically might be – home care, etc. And therefore the parents-in-law should be as close as possible.

... but you are counting on the pension?
Why count on the pension? I don’t understand the question. I am currently leaving out the salary because my wife is not working due to parental leave. The start is planned at 20% and then increasing.
So in the future, the salary will be planned for repayment. We want to be done paying off in at most 15 years.

Wow, I don’t know how needy your parents-in-law are, but I actually only know mostly agile and active seniors at this age who still plan for themselves what to spend their money on.
Is your wife an only child?

No, there are 2 daughters. The proceeds go into the condominium (or if the whole project doesn’t work out, into a condominium in the area) and care. This procedure is clarified and documented.

Regarding your cost estimate: I find it a bit confusing.
That means?

---

And what is the question now? Build a house and rent the granny flat to the parents-in-law. But then rent must also be paid so that the tax office recognizes it as deductible. The parents-in-law live rent-free and give you the proceeds of the single-family house as a gift? What about other heirs? Or is it supposed to be a two-family house and everyone has ownership?

The granny flat is to be rented out and they participate in the loan. (What would be more sensible? Charging rent and declaring it to the tax office or letting them live rent-free?)

Question:
Is the construction project with the budget and situation realistic – or do you have concerns or other opinions?



Regards

Go to the bank and explain your plan to them. Then you will also get the answer you need.

Hello,

from the income and asset situation, it should work out comfortably. However, I find it morally questionable towards the siblings. I myself have siblings, one of whom doesn't care and the other is keen on care/house.

Let's stick together, you wanted to care for the parents-in-law who are selling their property, invest the equity in your (not the parents-in-law's) property, and also have to pay rent for the condominium.

In return, you take care of the house planning, house management, and care (?). Care would be shopping and hiring a nursing service? Or do you also receive the care allowance?

Interesting