Dear people,
thank you for your responses. I haven’t gotten around to writing to you until now. We have now started concrete planning, and I ask you to comment on the figures we have found through intensive research. The salary figures in the initial post are correct so far. I currently earn 3,800 net in the judiciary (I have a lifetime appointment), from April 2018 4,000 net, then an increase of around 120 euros every two years up to the final level of 5,000 net. For each child, there is around 80-100 euros net extra. A promotion to a higher pay grade is relatively likely for me, which would add about 200 net more each time, but I don’t want to count on that. I would like to base things on my 4,000 net, which I will certainly earn from April. My wife earns 2,300 euros net in an unresigned position.
So far my wife and I have had the following income situation: I 3,800 net, my wife 1,300 net (she worked part-time to complete a supplementary degree), ergo 5,100 net. We pay 1,380 net per month for our rented apartment excluding utilities, spent about 5,000 euros per year on vacations, and paid very little attention to money. Still, we managed to save 700 euros per month.
We now earn a total of 1,500 euros more per month. You can also save on vacations by simply not flying to the Maldives anymore. Therefore, I currently see a monthly saving potential of around 2,200 to 2,500 euros per month, which will increase by 100 to 150 euros net every two years as my salary automatically rises.
Important: We currently have two cars, both 2.5 years old. These cars were financed from another source of money (inheritance), which is not included in the above calculation. Since we will move to the countryside, we both need a car. Ergo: Eventually, car financing installments will be due. Additionally, we probably want to have a child. Furthermore, my wife currently only has a small retirement provision; however, we are not yet sure whether we want to expand this. I will receive 70 percent of my last net salary as retirement pay, which should be around 3,700 euros net per month. Moreover, my parents, like with my siblings, are paying into a life insurance policy that would be payable upon my retirement.
Equity we have 65,000 euros in cash. Additionally, my father is a civil engineer. We want to build a solid house, so for us no costs will be incurred for planning, structural engineering, construction supervision, etc. According to HOAI, my father estimates “saved costs” of around 60,000 euros, which in my opinion should also be added to the asset side. Converted, we would therefore start with 125,000 euros equity.
First question: We found a plot of land that we like. 789 square meters, forest edge location on a hillside, unbuildable valley view, dead-end street. Fully developed, new street. The plot should cost around 200 euros per square meter. Do you consider that appropriate given the location (in the countryside, around 50 kilometers from Frankfurt am Main)? The plot is relatively level, almost square.
Second question: My father and I roughly estimated budget items to calculate the total volume. We were very generous in doing so, and I would like to know from you whether you find this somewhat realistic or if you consider it a bit too high (warning: I don’t want any beautification, better to budget too much than too little!). We want 180 square meters of living space, a garage, a basement. Nothing special, so no little castle with bay windows and turrets. We estimated the following items:
Land purchase + incidental costs: 180,000 euros
Architect services: 40,000 euros (EL)
Statics etc.: 20,000 euros (EL)
House: 350,000 euros
Garden with enclosure: 20,000 euros
Outbuildings: 20,000 euros
Furniture, kitchen: 40,000 euros
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Total: 670,000 euros
Less equity: 60,000 euros
Less EL: 60,000 euros
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Total burden: 550,000 euros
My father says from his experience (engineering firm with 40 employees) this is a very generous—i.e., rather overpriced—calculation. How do you see that?
Third question: Given the current figures, do you see problems with financing? So far, it looks like a double burden of loan + rent will not occur because the loan only needs to be repaid after moving in. For a sum of 100,000 euros, we will probably get a loan without interest.
Thanks for your help!