Would a construction project be feasible for us?

Hello everyone,

Since the beginning of this year I have been reading frequently in this forum, have already absorbed lots of information, and now I would like to present my own concern here. The thing is, I unfortunately have not found a situation like mine and my girlfriend’s in all the subforums – many still need a plot of land or have one in sight and ask about the possibility of financing including building, or have high incomes (5-6k€ net together we will not have) or high equity etc. I would therefore be very grateful if you could help me with the joint considerations with my girlfriend on whether building a house is realistic with the figures mentioned below.
First about us as persons:
Me, 32 years old, tax clerk, 1,860.00 euros net per month.
Girlfriend, 29 years old, student, currently 616.00 euros parental allowance per month.
Two children, 7 years and 6 months, child benefit therefore 408.00 euros per month.
Additionally, for the first child there is a maintenance advance of 202.00 euros.
Current total 3,086.00 euros income per month. However, this will change from 2020, as my girlfriend is doing a distance learning course which she will finish this year because she is currently writing her bachelor thesis. She has worked as a working student for her current employer, earning between 800.00 and 1,000.00 euros net per month; she could take up this job again and would earn at least that. However, understandably, she wants to pursue the job she studied for. Although we are aware that it will not be a 40-hour week with full salary, since the first child is of school age and our second child will attend daycare next year, there must always be someone to drive the children, which could be me, and I might have chances for partial home office from 2020. Therefore, we cannot estimate how high her net salary will be.

Our monthly expenses:
Rent: 330 euros (apartment in her parents’ house all inclusive, no additional costs)
Groceries: 350 euros
Leasing car: 56 euros
Insurance leasing car: 26 euros
Car tax leasing car: 3.50 euros
Gas costs leasing car: 80 euros
Insurance second car: 37.50 euros
Car tax second car: 10 euros
Gas costs second car: 50 euros
Household insurance: 9 euros
Liability insurance: 8 euros
Legal protection: 20 euros
Telephone: 25 euros (from July 2020 30 euros)
Mobile phone: 17 euros (from July 2020 35 euros)
Mobile phone: 17 euros (stays the same)
Account fees: 7 euros
Account fees: 8 euros
School fees: 180 euros
Dance studio: 28 euros
Sky ticket: 15 euros
Club: 15 euros
Miscellaneous (eating out/order, clothing): 150 euros
Total expenses: 1,442.00 euros

We currently have no further loans to service (until recently 2 private loans due to separations with financial consequences). We currently have about 10k€ in equity, which is increasing monthly by 1,000 to 1,500 euros.

Now regarding the possible house and the plot:
We can build on her parents’ land and would get about 800 to 1,000 sqm. For orientation, the price per sqm in this district is 75.00 euros (living at the edge of Lilienthal (near Bremen)). Connections can be attached to the already existing ones. However, the plot lies about 70 cm below street level, so it definitely needs to be filled for the foundation.
Due to the transfer, we would have no realtor fees, no property transfer tax (as it is a gift under the limit) and would only have the pure transfer and registration costs at the notary and the office. We want to pay exactly these costs and the costs for the construction (insurance/electricity/etc.) as well as the interior fittings (especially the kitchen) from the equity.
We were at a construction fair at the beginning of 2019 and asked, based on the given figures, what the bank would give us. Back then, we ended up at just under 260,000 euros including factoring in the land as equity. As repayment, we set ourselves a monthly limit of 900 euros. We have browsed various house catalogs and like some providers, although the performance descriptions differ widely between the providers. Basically, Danwood Point 150 for 165,400 euros is interesting for us. Size and number of rooms are absolutely reasonable for the four of us.

Now finally our questions and your opinion:
- We dream of building, but is it also realistic with the above incomes? We already have an opinion from the bank as mentioned above, but we would like to have neutral opinions as well.
- If additional work (foundation/earthworks/connection work) of about 55,000 euros were added to the basic price of the house of 165,400 euros, would we really have a full-fledged house for just under 220,000 euros or is something missing in our thoughts? (We want to leave outdoor facilities out for now).

Thank you in advance for your answers

Best regards

I would first improve the income situation.

The current income is too low. It only makes sense when regular recurring income is present.

Write something about the current living situation. How much space do you have? What is the relationship like with your girlfriend’s parents? Could you continue living there cheaply for another 3-5 years so you can save more. Who are her parents giving the property to? You or both of you? Is the schoolchild from your previous relationship or from hers? I’m putting myself in the position and thought process of your girlfriend’s parents, because in terms of age and a similar project in our family, they are probably closer to me situation-wise.

We also decided on danwood. The prices were really top-notch. In any case, you should add another 10k to the house construction sum for detailed work that is not included in the price scope (sockets, moldings, doors, sanitary installations, etc.)

Is the partial plot a rear parcel?

If yes, then other questions and costs will arise for you (sewage, fire department access, surveying, division, etc.)

Are you both finally registered in the land register?

Write something about the current living situation. How much space do you have? What is the relationship with your girlfriend’s parents? Could you continue living that cheaply there for another 3-5 years to save more? To whom are her parents giving the property? To you or to both of you? Is the schoolchild from your previous relationship or from hers? I am trying to put myself in the position and thoughts of your girlfriend’s parents because, due to age and a similar situation in our family, they are certainly closer to me in terms of the situation.

The current living situation is not very good, which is why we want a change as soon as possible, even though we could stay living with her parents for the next few years. The apartment in her parents’ house has 2 rooms and 45 sqm. Fortunately, the older daughter still has her own room in the grandparents’ part of the house, but in the long term it is too small, especially as our youngest gets older and will want/should have her own space. My relationship with her parents is normal; I get along well with them. The property will definitely be given only to her, which is not a problem for me (and not for the bank either, we asked about that directly at the time). The older daughter is from her previous relationship.