New Single-Family House Construction - Feasibility Assessment

So it’s not really difficult if you start saving at 18-19 (dual study program!) and have invested wisely. The last 10 years were free money on the stock market, with MSCI World returns of 10%-15% without much effort.

If you wanted to end up with 160,000 (untaxed) euros in 2022, you would have only had to put 713 euros per month into the MSCI World starting in 2012. It’s possible with a lower savings rate because

According to your theoretical calculation, I would recommend the OP not to build a house and to continue investing in stocks. Then he can retire at 40 and live off his returns, which exceed his full-time job income. It’s really that simple. I don’t understand why everyone doesn’t do it that way.

My practical experiences, however, are different. Most people don’t have any significant financial assets through their own work and savings (excluding money gifts from parents, etc.) even at 30. That’s how I know it from my younger colleagues and circle of acquaintances. And I’m not talking about long-term students. But probably I don’t move in the "right" circles.

I also belong to the saving fox faction, finished my studies at 22, but at 26 was far from having financial assets of 170,000 euros.

By the way, I was able to surpass your stock calculation theoretically even more by acquiring property early and the sharply rising prices. The value of the property has more than doubled for me from 2015 to 2022. But this is a lucky coincidence and was not planned. The property value also only exists virtually and does not come into play because no sale is planned.

It would be too risky for me with a temporary apprenticeship. Despite the status of civil servant on revocation, banks will not count the salary and it is also not seizable without marriage. Then there is the question why someone does an additional training only to earn less net in 3 years?

Thank you very much for the honest and critical comment. Is it really the case that the trainee salary for a civil servant on revocation is not counted by banks towards a loan?

We actually see the possibility of switching to the higher service along with civil servant status as a great long-term opportunity. Here we mainly see advantages after a few years in balancing family and career, retirement provision/pension, etc. Likewise, the 2000 euros net (after deduction of private health insurance) is merely the starting salary in the entry-level position (A9). This should ideally increase to about 2500€ net after deduction of private health insurance after about 3-4 years following completion of studies (hopefully then also with marriage and maybe 2 children).

But indeed, we are also not quite sure whether one should instead pursue a part-time business administration degree, which can be shortened to 1.5 years through prior further training. In that case, after a subsequent job change, one would presumably have a higher net salary faster and at the same time still have a net salary of about 1800€ per month.

The question here is whether one prefers to accept a reduced salary (~1250€ net) for 3 years in order to then become a civil servant in the higher service or rather pursue a part-time bachelor’s degree without major salary losses.

Based on the current numbers, I don’t see a problem. It gets tight if 3 years of study are ahead, you are not married, and then she wants to start a new job and after half a year/year kids come right away. Then you can really only count on about 4,800 euros or so, and the loan with 2k plus 400 ancillary costs is already 50% of your household income, and that for a few years because you don’t go back to full-time immediately. Challenging but doable.
If I were you, I would definitely
1) marry beforehand or sign a corresponding contract
2) either study or buy a house, in my opinion
3) wait out the studies, keep saving diligently and postpone the decision until after the studies when it’s clear where, how and what she will work

What does such a contract look like? Is there anyone here with experience on that?
With the dual degree program, it is actually quite certain that after 3 years she will work in a position at the local district authority on site, and the salary development is foreseeable.
Unfortunately, the property has a building deadline of 4 years from purchase, which means that if one were to buy this property in the near future, the decision to build could not be delayed for long.

According to your theoretical calculation, I would recommend the OP not to build a house and continue investing in stocks. Then he can retire at 40 and live off his returns, which exceed his full-time job. It really is that simple. I don’t understand why everyone does it differently.

My practical experience, however, is different. Most have not built up significant financial assets through their own work and savings by age 30 (excluding money gifts from parents, etc.). That’s how I know it from my younger colleagues and acquaintances. And I’m not even talking about long-term students. But maybe I don’t mingle in the “right” circles.

I also belong to the frugal group, finished my studies at 22 but at 26 was far from a financial asset of 170,000 euros.

By the way, I was able to surpass your stock calculation theoretically through early acquisition of property and strongly rising prices. The value of the property more than doubled for me between 2015 and 2022. However, this was a lucky coincidence and was not planned. The real estate value only exists virtually and is not realized because no sale is planned.

The 170,000€ actually came about through very disciplined saving and low living costs (and the occasional gift from parents). Overall, however, I don’t need great luxury to be happy. But that is not meant to be the primary topic here.

Since the high equity capital assets come from actual savings efforts, I see no problems at all with the financing of your project. You have proven that you can save. Saving primarily means foregoing consumption in order to benefit in the long term.

Thank you very much for the honest and critical comment. Is it actually true that the trainee salary for a civil servant on probation is not counted by banks as part of a loan?

We actually see the opportunity to switch to the higher civil service along with civil servant status as a great long-term opportunity. Here, we mainly see advantages in a few years regarding compatibility of family and career, retirement provision/pension, etc. Likewise, the 2000 euros net (after deduction of private health insurance) is merely the starting salary in the entry-level position (A9). This should increase to about 2500€ net after deduction of private health insurance after about 3-4 years following graduation (hopefully then also married and perhaps with 2 children).

However, we are also not entirely sure whether one should instead pursue a part-time business administration degree, which can be shortened to 1.5 years through a prior qualification. In that case, one would probably have a higher net salary faster after changing jobs and at the same time still have a net salary of ~1800€ per month.

The question here is whether you prefer to accept a reduced salary (~1250€ net) for 3 years to then become a civil servant in the higher service or rather pursue a part-time bachelor's degree without significant loss of salary.

What would such a contract look like? Is there anyone here who has experience with this? With the dual study program, it is actually quite certain that she will work in a position at the local district authority on site after 3 years, and the salary development is also foreseeable. Unfortunately, the property has a building deadline of 4 years from purchase, meaning we could not delay the decision for construction much if this property were to be purchased promptly.

The 170,000€ actually came about through very disciplined saving and low living costs (and the occasional gift from the parents). Overall, I don’t need much luxury to be happy. However, this should not be the primary topic here.

No, of course it is not the case that the bank does not consider it. Why should they not consider it? Although it is a fixed-term employment, it is still with the state. The salary is taken into account as usual.

Thank you very much for the honest and critical comment. Is it really the case that the trainee salary for a civil servant on probation is not counted towards a loan by banks?

We actually see the possibility of switching to the higher service along with civil servant status as a great long-term opportunity. Here we mainly see advantages in a few years regarding work-life balance with family, retirement pension, etc. Also, the 2000 euros net (after deduction of private health insurance) is only the starting salary at the entry-level position (A9). This should increase to about 2500€ net after private health insurance deductions after approximately 3-4 years following graduation (hopefully then also with marriage and maybe 2 children).

But actually, we are also not entirely sure whether it would be better to pursue a part-time business administration degree, which can be shortened to 1.5 years through prior further education. In that case, with a subsequent job change, you would probably have a higher net salary faster while still having a net salary of about 1800€ per month.

The question here is whether you prefer to accept a reduced salary (~1250€ net) for 3 years in order to become a civil servant in the higher service, or rather pursue a part-time bachelor’s degree without major salary reductions.

What would such a contract look like? Does anyone here have experience with this? With the dual study program, it is pretty certain that she will work in a position at the local district authority on site after 3 years, and the salary development is foreseeable. Unfortunately, the property has a construction deadline of 4 years from purchase, meaning that if the property is bought soon, the decision to build could not be postponed much further.

The 170,000€ have actually come about through very disciplined saving and low living expenses (and the occasional gift from the parents). Overall, I don’t need a lot of luxury to be happy. But this should not be the primary topic here.

I would definitely do the civil servant study. There is no better opportunity. Better to have a little less for a few years but then have security plus very good retirement benefits. And 2500 net is by far not the end. Maybe there’s also something to save on private health insurance. Take a look at Huk Coburg; it’s cheaper than the ever popular Debeka.

Overall, I also think it is quite doable.

Thank you very much for the answers.
That means even with her reduced income (1300€ net instead of 1900€) combined with his income (3650€), a loan of 500,000€ should be approved?