ᐅ Extension and Renovation of the Family Home – Is It Realistic?

Hello everyone,
We are currently seriously considering and planning to take over my parents’ house (built in 2001) and extend it with an addition for my parents.
We are quite uncertain about many points:
- My parents are thinking of transferring the house to us as a gift. I have two siblings—both already own property; one sister lives right next door in my mother’s parents’ house. Both siblings would waive their “mandatory share” in the case of a house transfer. We would pay them both €50,000 (approx. $54,000) each after agreement.
- What financial costs should we expect for the extension? Development plans are available. The size of the extension would be about 80 sqm (860 sq ft). The main house is 120 sqm (1,290 sq ft), where we would like to carry out some renovations—windows, floors, etc. We have roughly budgeted €50,000 (approx. $54,000) for this.

Regarding financing: We are considering a loan of €200,000 to €250,000 (approx. $215,000 to $270,000).
My partner and I both have full-time jobs and have about €4,500 (approx. $4,850) available monthly. So far, we pay €900 (approx. $970) in rent including utilities and manage well financially.
We do not have any cash equity—we are still quite young and have been working full-time for only 1.5 years. However, we would undertake all work ourselves except for the structural shell and heating installation.
There are currently no existing loans.
Under these circumstances, is it “realistic” to start more detailed planning?
Thank you very much and best regards

How do you come to the conclusion that you can do this? Are you professionals in the trades?
Without electrical work, payout, extension, or renovation, you should budget at least 300 meters (980 feet). With a lot of electrical work, you might be able to reduce that by 30-40 meters (98-131 feet), but it still won't be less than 250 meters (820 feet).

2 x 50,000 to buy out the siblings + 50,000 for renovating the main house + 80 sqm (860 sq ft) x 2,000€ for the extension = 310,000 budget requirement. This is without any buffer or extras.
How do you arrive at a loan amount of 200,000 - 250,000 if there is no equity?

Ypsi aus NI schrieb:

2 x 50,000 to buy out the siblings + 50,000 renovation of the main house + 80 sqm (860 sq ft) x 2,000 €/sqm (per sq ft) extension = 310,000 budget requirement. Without any contingency or extras.
How do you arrive at a loan amount of 200,000 - 250,000 if there is no equity?

Sorry, we are actually expecting 300,000 - 350,000 – typing error.
We have a small contingency, but less than 10,000. Before construction starts, we might be able to save a bit more so that we could begin the project with around 15,000 in equity. I know it’s not much, but it’s better than nothing.

Then it should fit at first glance. Just start your project and see what comes out of it and whether you can or want to afford it.
Try to plan as detailed as possible. Get quotes (for example, for the existing house; due to COVID-19, contactless is possible. Simply measure the windows, send the dimensions to companies, and request quotes). Also plan the kitchen at a kitchen showroom once that is possible again. Bathroom furniture, sanitary fixtures, lighting. All this “small stuff” makes a big difference but can actually be determined very well in advance.
For the rough extension / shell construction, a company has to be hired… That’s where you’ll get concrete quotes.

Lumpi_LE schrieb:

How do you figure you can manage that? Do you work in the trades?
Without electrical work, payout, extension, or renovation, you should budget at least 300,000 (300k), and with a lot of electrical work you might be able to deduct 30,000 to 40,000 (30k to 40k), but it still won’t be less than 250,000 (250k).

My family and my boyfriend work in skilled trades—roofers, electricians, technicians, etc.—and they recently completed my sister’s house almost entirely by themselves, except for the structural shell. They definitely know how much work is involved.
And regarding the loan amount: we are planning for 300,000 to 350,000 (300k to 350k), small typo.