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
P
Partyheld11 Feb 2020 13:37@11ant
We got the property quite cheaply from distant relatives and then renovated it extensively with a lot of our own work. The oil heating system was removed back then and replaced with a modern gas boiler.
The family didn’t move in because we saw it as an investment property, but rather because we preferred to have family living in the house instead of strangers.
We never actually wanted a two-family house.
Back then, we were searching in the area because it fit well for the family and work, and the location was convenient in every direction.
But we couldn’t find anything that matched our expectations and budget. It also had to be within walking distance of the train station.
Then my wife remembered that her great-aunt’s husband still owned a house there that had been empty for 10 years and was occupied alone by an elderly lady for 8 years before she passed away.
And yes… this house met all the criteria:
Close to the train station, roughly the right size, large garden, etc.
So we took on the project and included family living there.
After living there for 4 years, we’re now simply realizing that it doesn’t fit 100% anymore.
Now the question is: either make it work somehow or build new.
There is the possibility to build in the backyard.
If we build new, then either keep it as an investment property or sell it.
@Scout
No, that option doesn’t fit. The house is still too good to demolish.
Also, the front house doesn’t have much garden, which is very important to us. Everything is built up and poorly laid out. I definitely want to keep the garden at the back.
Building a duplex in the backyard will probably be tight regarding zoning regulations.
And then we’d still lose too much garden space. We’d be losing too much garden, and we want a large garden.
@kaho674
I’m already at the bank.
Financing another house at the back will be tight but doable.
I could get a private loan of $30,000 from family, then it’s definitely possible.
I’ve already clarified everything with the bank. So all three options are realistically feasible.
We got the property quite cheaply from distant relatives and then renovated it extensively with a lot of our own work. The oil heating system was removed back then and replaced with a modern gas boiler.
The family didn’t move in because we saw it as an investment property, but rather because we preferred to have family living in the house instead of strangers.
We never actually wanted a two-family house.
Back then, we were searching in the area because it fit well for the family and work, and the location was convenient in every direction.
But we couldn’t find anything that matched our expectations and budget. It also had to be within walking distance of the train station.
Then my wife remembered that her great-aunt’s husband still owned a house there that had been empty for 10 years and was occupied alone by an elderly lady for 8 years before she passed away.
And yes… this house met all the criteria:
Close to the train station, roughly the right size, large garden, etc.
So we took on the project and included family living there.
After living there for 4 years, we’re now simply realizing that it doesn’t fit 100% anymore.
Now the question is: either make it work somehow or build new.
There is the possibility to build in the backyard.
If we build new, then either keep it as an investment property or sell it.
@Scout
No, that option doesn’t fit. The house is still too good to demolish.
Also, the front house doesn’t have much garden, which is very important to us. Everything is built up and poorly laid out. I definitely want to keep the garden at the back.
Building a duplex in the backyard will probably be tight regarding zoning regulations.
And then we’d still lose too much garden space. We’d be losing too much garden, and we want a large garden.
@kaho674
I’m already at the bank.
Financing another house at the back will be tight but doable.
I could get a private loan of $30,000 from family, then it’s definitely possible.
I’ve already clarified everything with the bank. So all three options are realistically feasible.
Scout schrieb:
In the Munich metropolitan area: if the municipality and the development plan allow it, ... I wouldn’t initially consider separate buildings. Even if the similarities are limited, I recommend this reading to the original poster: https://www.hausbau-forum.de/threads/mehrgenerationenhaus-mit-tiefgarage-für-3-Familien.30444/
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
For a realistic assessment, you would need to run the numbers thoroughly based on your specific situation. As it stands, I can only offer a rough guess:
If I were in your position, I would renovate, extend, and improve the existing property. This will likely cost only about one-third compared to building a new house. With a new build, you’re already pushing your financial limits. Often, the costs turn out to be much higher than expected, and you end up overstretching yourselves. The $30,000 from your family would disappear like butter on a hot pan. In the end, you could be left with huge debts everywhere, feeling trapped. Your entire life would revolve around paying it off.
With an existing property, costs are more manageable. If something is too expensive, you can postpone it without risking homelessness.
If I were in your position, I would renovate, extend, and improve the existing property. This will likely cost only about one-third compared to building a new house. With a new build, you’re already pushing your financial limits. Often, the costs turn out to be much higher than expected, and you end up overstretching yourselves. The $30,000 from your family would disappear like butter on a hot pan. In the end, you could be left with huge debts everywhere, feeling trapped. Your entire life would revolve around paying it off.
With an existing property, costs are more manageable. If something is too expensive, you can postpone it without risking homelessness.
P
Partyheld11 Feb 2020 13:58@11ant
I know the thread.
None of this is buildable.
No underground garage is allowed.
The zoning plan is very restrictive. Maybe a two-family house could be possible, but nothing more.
And we'd rather keep the plot for ourselves.
Floor area ratio: 0.25
Plot ratio / floor space index: 0.3
So not much can be done....
@kaho674
Well, since we are currently leaning towards selling (Option 3), there wouldn’t be any debt anymore....
I know the thread.
None of this is buildable.
No underground garage is allowed.
The zoning plan is very restrictive. Maybe a two-family house could be possible, but nothing more.
And we'd rather keep the plot for ourselves.
Floor area ratio: 0.25
Plot ratio / floor space index: 0.3
So not much can be done....
@kaho674
Well, since we are currently leaning towards selling (Option 3), there wouldn’t be any debt anymore....
Partyheld schrieb:
None of that is buildable.
No underground garage allowed. That’s what I’m saying; you shouldn’t make too much of the parallels.
Partyheld schrieb:
Site coverage ratio: 0.25
Floor area ratio: 0.3
So not much is possible... Zero point three repeated three times is still zero, but 1,600 × 0.25 equals 400 and 1,600 × 0.3 equals 480. So there is definitely some leeway, and depending on the possible continuous building depth, interesting options could arise.
Partyheld schrieb:
And then we would rather keep the plot for ourselves. However, if your wishes and the plot’s possibilities differ significantly, I see this as an argument in favor of selling.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
P
Partyheld11 Feb 2020 14:1811ant schrieb:
Three times zero is still zero, but 1,600 x 0.25 equals 400 and 1,600 x 0.3 equals 480. So there is definitely some room to maneuver, and depending on the possible combined building depth, interesting options might open up. No, that won’t work like that!
There are two plots of land.
850 sqm (9,149 sq ft). The two-family house is on this plot. Nothing more can be built here, maybe a small extension at most.
750 sqm (8,073 sq ft). The new building is planned here.
We would like to adjust the property boundaries a bit, so that the currently empty plot becomes 900 sqm (9,688 sq ft) and the plot with the existing house becomes 600 sqm (6,458 sq ft). These plots would then be sold accordingly.
For the rear plot (still undeveloped), the zoning plan applies as described earlier.
For the plot with the existing house, there are no specific values, only a building envelope.
As mentioned, it might be possible to build a two-family house at the back as well. But the rental income from that would have to be weighed against the value we place on living alone, which would be more important to us in that case.
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