Hello everyone,
We currently have several options regarding real estate. We are in the process of finding the most suitable one for us, but it’s proving quite difficult. That’s why I wanted to present all the options here for discussion and get some external opinions.
First, our current situation:
We are a family of four:
Wife, 30 years old; myself, 34 years old; two children (2 and 4 years old).
About 4.5 years ago, we bought a fixer-upper two-family house on roughly 1600 sqm (17200 sq ft) of land at a good price.
We have renovated it a lot ourselves and then moved into one unit. The other unit is rented out inexpensively to family.
Each unit is only 95 sqm (1020 sq ft). This is a bit tight for us as a family of four, especially since my wife is self-employed and has a home office. Currently, the two boys share a room. This works at their age but won’t be feasible long term.
The house got new windows, but the masonry isn’t very thick. Therefore, we have to ventilate very carefully and monitor humidity to avoid mold—so a lot of airing out!
Current debt: 240,000 (Currency not specified).
Now, we are considering how to proceed.
Currently, we see the following options:
Option 1:
Stay in the house. Remove the old oil tank from the basement and convert that space into a home office for my wife. That way, each child would have their own room.
Advantages:
We would likely have everything paid off within 7 years and be debt-free.
We would still have the really large garden.
After paying off the mortgage, we would continue to receive rent from the second unit.
Disadvantages:
The home office would be in the basement, which would need additional heating and probably a dehumidifier, since the basement is old and not climatically ideal. Nearly no natural light.
We would continue living in an old house with humidity issues in our unit. Either expensive insulation or installing a decentralized ventilation system would be necessary. A ventilation system is not ideal either; due to the layout, we would probably need six individual units, which would require breaking channels into the walls. Noise from the busy street in front of the house would likely increase.
We partly use wood heating to save on gas costs. This creates a lot of work and mess.
Insulation problems: The balcony would have to be removed. The driveway next to the house is already very narrow and would become almost too tight. The basement stairwell behind the house would need to be relocated, as it would otherwise be very cramped. All of this would also be expensive.
Option 2:
Build a new house at the back of the garden for ourselves and rent out the current house completely.
Advantages:
We would live alone in our own house and practically have the garden to ourselves.
We could build the house exactly as we want, from the energy standard to the comfort of the ventilation system and layout.
We would receive rent from two apartments plus garages (potentially a good retirement plan).
Disadvantages:
The garden would be somewhat smaller.
We would have to insulate and/or equip the current house with a ventilation system because we cannot expect tenants to ventilate carefully.
We would still own the old house, which will almost certainly require renovation costs in the next 30 years.
We would likely only be debt-free in about 15 years.
I would have to manage both the house and the tenants.
Insulation problems: The balcony would have to be removed. The driveway next to the house is already very narrow and would become almost too tight. The basement stairwell behind the house would need to be relocated because access would otherwise be too cramped. This would all be expensive again.
Option 3:
Build at the back of the garden and sell the front house with approximately 600 sqm (6460 sq ft) of land.
Advantages:
We would live alone in our own house and have the entire garden for ourselves.
We could build the house exactly as we want, from the energy standard to the comfort of the ventilation system and layout.
We would likely get enough from selling the current house to cover the current debt plus the new build. This means we would be debt-free immediately.
We would no longer have to deal with the “old place” and have no stress with tenants.
Disadvantages:
The garden would be a bit smaller (though about 900 sqm (9700 sq ft) of land would still remain).
We would no longer have passive income from renting.
Our current tenants (my wife’s uncle and his family) probably wouldn’t like this since they currently live very cheaply here. They could only stay here at that rate for five more years after the sale (they also made upgrades like a new kitchen and wood stove). They wouldn’t find another apartment of this size that cheap.
Additional information:
I roughly calculated that if we didn’t sell the house, it would take about 34 years to recover the purchase price we could get now through rental income. During that time, of course, renovation costs would also come up. We would also have to pay interest on the current mortgage and possibly the new one. So I think only after about 40 years renting would be more economical than selling now.
I look forward to your opinions and suggestions.
Regards,
Partyheld
We currently have several options regarding real estate. We are in the process of finding the most suitable one for us, but it’s proving quite difficult. That’s why I wanted to present all the options here for discussion and get some external opinions.
First, our current situation:
We are a family of four:
Wife, 30 years old; myself, 34 years old; two children (2 and 4 years old).
About 4.5 years ago, we bought a fixer-upper two-family house on roughly 1600 sqm (17200 sq ft) of land at a good price.
We have renovated it a lot ourselves and then moved into one unit. The other unit is rented out inexpensively to family.
Each unit is only 95 sqm (1020 sq ft). This is a bit tight for us as a family of four, especially since my wife is self-employed and has a home office. Currently, the two boys share a room. This works at their age but won’t be feasible long term.
The house got new windows, but the masonry isn’t very thick. Therefore, we have to ventilate very carefully and monitor humidity to avoid mold—so a lot of airing out!
Current debt: 240,000 (Currency not specified).
Now, we are considering how to proceed.
Currently, we see the following options:
Option 1:
Stay in the house. Remove the old oil tank from the basement and convert that space into a home office for my wife. That way, each child would have their own room.
Advantages:
We would likely have everything paid off within 7 years and be debt-free.
We would still have the really large garden.
After paying off the mortgage, we would continue to receive rent from the second unit.
Disadvantages:
The home office would be in the basement, which would need additional heating and probably a dehumidifier, since the basement is old and not climatically ideal. Nearly no natural light.
We would continue living in an old house with humidity issues in our unit. Either expensive insulation or installing a decentralized ventilation system would be necessary. A ventilation system is not ideal either; due to the layout, we would probably need six individual units, which would require breaking channels into the walls. Noise from the busy street in front of the house would likely increase.
We partly use wood heating to save on gas costs. This creates a lot of work and mess.
Insulation problems: The balcony would have to be removed. The driveway next to the house is already very narrow and would become almost too tight. The basement stairwell behind the house would need to be relocated, as it would otherwise be very cramped. All of this would also be expensive.
Option 2:
Build a new house at the back of the garden for ourselves and rent out the current house completely.
Advantages:
We would live alone in our own house and practically have the garden to ourselves.
We could build the house exactly as we want, from the energy standard to the comfort of the ventilation system and layout.
We would receive rent from two apartments plus garages (potentially a good retirement plan).
Disadvantages:
The garden would be somewhat smaller.
We would have to insulate and/or equip the current house with a ventilation system because we cannot expect tenants to ventilate carefully.
We would still own the old house, which will almost certainly require renovation costs in the next 30 years.
We would likely only be debt-free in about 15 years.
I would have to manage both the house and the tenants.
Insulation problems: The balcony would have to be removed. The driveway next to the house is already very narrow and would become almost too tight. The basement stairwell behind the house would need to be relocated because access would otherwise be too cramped. This would all be expensive again.
Option 3:
Build at the back of the garden and sell the front house with approximately 600 sqm (6460 sq ft) of land.
Advantages:
We would live alone in our own house and have the entire garden for ourselves.
We could build the house exactly as we want, from the energy standard to the comfort of the ventilation system and layout.
We would likely get enough from selling the current house to cover the current debt plus the new build. This means we would be debt-free immediately.
We would no longer have to deal with the “old place” and have no stress with tenants.
Disadvantages:
The garden would be a bit smaller (though about 900 sqm (9700 sq ft) of land would still remain).
We would no longer have passive income from renting.
Our current tenants (my wife’s uncle and his family) probably wouldn’t like this since they currently live very cheaply here. They could only stay here at that rate for five more years after the sale (they also made upgrades like a new kitchen and wood stove). They wouldn’t find another apartment of this size that cheap.
Additional information:
I roughly calculated that if we didn’t sell the house, it would take about 34 years to recover the purchase price we could get now through rental income. During that time, of course, renovation costs would also come up. We would also have to pay interest on the current mortgage and possibly the new one. So I think only after about 40 years renting would be more economical than selling now.
I look forward to your opinions and suggestions.
Regards,
Partyheld
You already have a debt of 240K and now want to borrow another 400K for a home? If I were the bank, I would be skeptical. Your income would need to be known for that.
I would probably try to keep the building plot for the children later and rather look at what options the existing property still offers. For example, what about an extension? I assume the roof is already being used?
I would probably try to keep the building plot for the children later and rather look at what options the existing property still offers. For example, what about an extension? I assume the roof is already being used?
P
Partyheld11 Feb 2020 13:01We have also considered adding an extension.
In theory, it would be possible, but it would need to be discussed with the local authorities (building permit / planning permission).
However, all the disadvantages of the old building would remain. A ventilation system would be useful to avoid airing out the house three times a day. Insulation would also be beneficial, but this brings its own set of challenges. The extension would also cost around 50,000.
The roof is out of the question. We already thought about this a few years ago.
There is only a width of 1.5 meters (5 feet) where you can stand upright.
That’s why we simply used mineral wool insulation on the ceiling of the top floor.
In theory, it would be possible, but it would need to be discussed with the local authorities (building permit / planning permission).
However, all the disadvantages of the old building would remain. A ventilation system would be useful to avoid airing out the house three times a day. Insulation would also be beneficial, but this brings its own set of challenges. The extension would also cost around 50,000.
The roof is out of the question. We already thought about this a few years ago.
There is only a width of 1.5 meters (5 feet) where you can stand upright.
That’s why we simply used mineral wool insulation on the ceiling of the top floor.
M
Matthew0311 Feb 2020 13:123
Partyheld schrieb:
The location is within approximately 50 km (30 miles) of Munich with first-class train connections.
Excellent highway access. All doctors and schools are available locally. And then on 1600 sqm (17,200 sq ft) of land, only 190 sqm (2,045 sq ft) of rental space in a property from the oil heating era. Including this existing building in any consideration at all shows an emotional attachment that a commercial property developer would not "allow." Whether it’s your own renovation hours or funds, or the uncle’s family: these are hobbies – certainly likeable, but purely from a business perspective, they actually belong on the list of drawbacks.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
In the Munich metropolitan area: If the local municipality and planning permission cooperate, you can negotiate between developers: you provide the plot at the front for a semi-detached house for the builder, your old house will be demolished by them, and in return, you receive a roughly 140 m² (1,500 sq ft) house at the back, more or less in an extended shell condition (depending on your negotiation skills).
The uncle could purchase one half of the semi-detached house at the front if that is an option. Alternatively, with the plot size you have, you could jointly build another semi-detached house.
The uncle could purchase one half of the semi-detached house at the front if that is an option. Alternatively, with the plot size you have, you could jointly build another semi-detached house.
Partyheld schrieb:
But then all the disadvantages of the old place remain. Yes, and all its advantages too. Of course, a new house is nicer because it is built specifically for you. If you can finance it on reasonable terms, why not? Have you already approached the bank about this? You don’t have to worry if taking out another loan would be unrealistic. This alone may reduce the number of options available.
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