Should we build a house - or rather not?

I have been reading here for a while and like your critical voices! Now I would like to ask you for your critical opinion. We are currently living almost for free in my husband's parents' house - a farmhouse about 350 years old. Renovated about 35 years ago (with appropriate insulation, etc.). In total, there are 3 households here plus a shop. There are 2 entrances, one to my father-in-law and one to the shop, subtenants, my husband’s brother, and us. The situation is escalating. My brother-in-law's girlfriend plus her child (from another district) are really getting on my nerves. My husband and I, plus our two children, are the only ones who have invested here and kept things in order in recent years. The girlfriend and child are moving here now and I am getting stomach ulcers. The child constantly comes into our place without knocking, let alone ringing the bell, and wants to be entertained! We don’t have real front doors in the apartment. We live on about 130 sqm in the attic. At some point, my husband and his brother are supposed to take over this house, but no one knows how it will be divided. I would prefer to move out and build something of our own. My husband is not convinced yet, family and all... It annoys me! Regarding our financial situation. We have little to no equity (about 20,000), currently about €4700 net is available. I work part-time, if I increased my hours, we would come to about €5700. In addition, my husband is getting "promoted" in summer so that we could possibly get up to €6000. Both of us are lifetime civil servants! 3 home savings contracts are currently running. In addition, it will be foreseeable that I will get half of my parents' house and my brother should then pay me out! What do you think? Are we in a position to build? We live very rurally – a building plot would cost us only around €29,000 without the fees, which I am not yet really familiar with. Next week we have an appointment with an independent financial advisor to get everything in order. I would be very grateful for your opinion! Best regards, Tessa

So just gut feeling, could that work.
What is first and foremost essential: Make a picture of what I really have available per month at the moment, meaning income minus expenses

Purely based on income, building should not be a problem! The only thing that surprises me a bit is your low equity!

4700€ net per month, living rent-free and still only having saved 20k? That means you spend quite a bit on other things/luxury.

If you build, this might mean a restriction in another area...

@shism you are absolutely right... over the past few years we have mostly invested in travel, children, a new car, and uh, more travel. Until now, things have always gone quite well in our multi-generational house! but that is no longer the case! besides, there are quite a few things added here in the house, like missing insulation, an overdue new slate roof, bathroom renovation, etc.!

as I said, next week it's going to get serious! by the way, I have already drastically reduced my and the children's clothing needs

best regards tessa

What really surprises me here is the low equity - given your income. Please don't be upset - but to me, that clearly indicates a rather lavish lifestyle. If I were you, I would first try to accumulate as much equity as possible for 1 - 2 more years. You would then quickly find out whether you could cope with giving up many familiar comforts - and that over many years. Regards

You should just expect to have about €1500 less per month than now!

I think you want to build a somewhat "upscale" single-family house... with land you’re quickly at €300-350k.

€350k with €20k equity = €330k loan from the bank...

even though interest rates are currently low, with so little equity and a reasonable fixed interest period (20 years) you will at best end up around 3.7% or higher! At 2% repayment that means about €1600 and you would be finished paying off in about 28 years...

since you currently have no rental costs, there’s nothing to offset, meaning the money comes directly out of your previously freely available amount! That’s about €19,000 per year! So you will have to give up on a little more than 1-2 vacations per year.

But as I said, with €4700 net, you still have €3100 net left, which is more than most people even have available! That should actually be enough to live (well)!