Hello everyone,
I am married and have a one-year-old son.
My wife and I are both 30 years old.
We come from the area south of Baden-Württemberg – around Freiburg.
Both of us have above-average incomes.
My wife is currently on parental leave.
We finally acquired a plot of land three months ago through a private sale at a reasonable price.
[300m2 (3200 sq ft) for about 125,000 Euros including additional costs].
Now we have gathered several offers from prefabricated house suppliers, both solid construction and timber frame, etc.
When we calculated everything, the total cost of the entire building project—without the land, including additional costs, exterior works, kitchen, etc.—comes to about 600,000 Euros, truly turnkey, with a buffer included.
Here is the problem.
With the current interest rate, despite owning the land outright [equity], we cannot finance it.
The monthly burden is too high (around 2300–2500 Euros, including an L-Bank loan, which is currently basically in limbo with the state bank).
My idea is to buy a condominium first.
(Secure the land, fully paid (125,000 Euros)).
Our current apartment is too small for the long term.
Financing a condominium would be much easier since the loan amount is significantly lower than for building a house.
We will definitely inherit something in the coming years (the older generation has not yet passed anything on in advance, unfortunately, when it was needed).
My plan would be to buy and live in the condo, paying it off monthly.
Once the inheritance comes through, fully pay off the condo and then build the house. That way, we have the security of owning a paid-off condo and monthly rental income to support the repayment of the house loan.
What do you think? Do you have other ideas?
Regards,
Peter
I am married and have a one-year-old son.
My wife and I are both 30 years old.
We come from the area south of Baden-Württemberg – around Freiburg.
Both of us have above-average incomes.
My wife is currently on parental leave.
We finally acquired a plot of land three months ago through a private sale at a reasonable price.
[300m2 (3200 sq ft) for about 125,000 Euros including additional costs].
Now we have gathered several offers from prefabricated house suppliers, both solid construction and timber frame, etc.
When we calculated everything, the total cost of the entire building project—without the land, including additional costs, exterior works, kitchen, etc.—comes to about 600,000 Euros, truly turnkey, with a buffer included.
Here is the problem.
With the current interest rate, despite owning the land outright [equity], we cannot finance it.
The monthly burden is too high (around 2300–2500 Euros, including an L-Bank loan, which is currently basically in limbo with the state bank).
My idea is to buy a condominium first.
(Secure the land, fully paid (125,000 Euros)).
Our current apartment is too small for the long term.
Financing a condominium would be much easier since the loan amount is significantly lower than for building a house.
We will definitely inherit something in the coming years (the older generation has not yet passed anything on in advance, unfortunately, when it was needed).
My plan would be to buy and live in the condo, paying it off monthly.
Once the inheritance comes through, fully pay off the condo and then build the house. That way, we have the security of owning a paid-off condo and monthly rental income to support the repayment of the house loan.
What do you think? Do you have other ideas?
Regards,
Peter
Yes, and it might actually be better to start building after the second child is born and both parents are working again. The advantage of this is that your entire income and expense situation will be more stable. At the moment, I can’t imagine how you could afford to build a house with reduced working hours. I had assumed the 2300 already reflects part-time income. Unfortunately, not only is there a risk of reduced income due to part-time work, but also additional childcare costs:
irmsche schrieb:
considering the childcare costs, welcome back to the south = quickly 450 euros per month.
X
xMisterDx13 Jan 2023 14:27Phew. When I read about the (significantly) above-average salary, I honestly thought it would be around 6,000–7,000 net, for both working full-time.
5,300 EUR (about 5,700 USD) is good, but considering Baden-Württemberg and your project, it seems quite low again. Well, you still get child benefits, but that at best compensates for part-time or parental leave.
Especially since it’s full-time, and from my own experience, I can hardly imagine how you plan to manage 1–2 children and a house with a lot of work during the first years while both having full-time jobs.
Leaving out the basement and garage—does anything else really make sense here?
5,300 EUR (about 5,700 USD) is good, but considering Baden-Württemberg and your project, it seems quite low again. Well, you still get child benefits, but that at best compensates for part-time or parental leave.
Especially since it’s full-time, and from my own experience, I can hardly imagine how you plan to manage 1–2 children and a house with a lot of work during the first years while both having full-time jobs.
Leaving out the basement and garage—does anything else really make sense here?
X
xMisterDx13 Jan 2023 23:50Tassimat schrieb:
Yes, and maybe it only makes sense to start building once the second child is born and both parents are working full-time again.(...) From my own experience... no, because:
With two (small) children, it is impossible for both parents to work full-time.
With two children, you hardly have the energy left for the many, many, really many decisions and arrangements involved in a new build...
And... before both parents are working full-time again with two children, at least five years will pass from the youngest child’s birth... if it can’t be any other way, at least three. Under no circumstances, in any world, can my wife go back to working 40 hours a week within a few months with two children aged 6 and 1...
Yes, time will tell. Some have parents living nearby who can help, so somehow it works out. Whether this is the way for the OP is questionable, most likely not.
They are still at the very beginning of the journey. Apart from a few (unrealistic) wishes, there is no real plan. They don’t even seem to know the daycare costs, although those can be found out quickly at the building location.
@irmsche what is your conclusion from the thread, how should it proceed, and what are your next steps?
They are still at the very beginning of the journey. Apart from a few (unrealistic) wishes, there is no real plan. They don’t even seem to know the daycare costs, although those can be found out quickly at the building location.
@irmsche what is your conclusion from the thread, how should it proceed, and what are your next steps?
We actually built twice during or right before parental leave. I found that reassuring because I knew, "In the worst case, we are basically already there; things can only get easier."
For the first house, the child was small and I was still on parental leave (with half the parental allowance; I split the money for a few months). We always knew that the first 1-2 years we would need to tighten the belt a bit, but we kept a casual household budget in Excel and knew we could manage the loan payments and our expenses. Vacations and savings were reduced during that time.
After parental leave, we had two job changes relatively quickly, both with good salary increases, so if we hadn’t sold the house, the loan burden would have been quite manageable afterward.
With the second house, it’s similar. We are about to welcome our second child, and just a few months later, the repayment for our new house will begin. Again, this will be our "lowest income point," but we’ve calculated it again using Excel and know it will work out. We just won’t have much spending money for a year or two. But I also know that once child number two starts kindergarten, things will be much more relaxed financially.
For the first house, the child was small and I was still on parental leave (with half the parental allowance; I split the money for a few months). We always knew that the first 1-2 years we would need to tighten the belt a bit, but we kept a casual household budget in Excel and knew we could manage the loan payments and our expenses. Vacations and savings were reduced during that time.
After parental leave, we had two job changes relatively quickly, both with good salary increases, so if we hadn’t sold the house, the loan burden would have been quite manageable afterward.
With the second house, it’s similar. We are about to welcome our second child, and just a few months later, the repayment for our new house will begin. Again, this will be our "lowest income point," but we’ve calculated it again using Excel and know it will work out. We just won’t have much spending money for a year or two. But I also know that once child number two starts kindergarten, things will be much more relaxed financially.