ᐅ City or countryside, new construction or renovation – the challenge of choosing!?
Created on: 2 Aug 2020 16:25
D
dankosos
Hello everyone,
I already started a thread in the financing section to estimate a possible loan range. Now we have roughly outlined that and are considering the options available to us.
Here’s a luxury problem:
We currently own two plots of land with rental properties on them. One is in the middle of the city (a 100 sqm (1,076 sq ft) terraced townhouse with a small garden directly on a main road), and the other about 5 km (3 miles) outside the city (a small detached single-family home, on nearly 1,000 sqm (10,764 sq ft) of land, in a quiet location). Additionally, we have €300,000 (including support from relatives) in cash equity plus around €50,000 set aside as a buffer for unexpected expenses in everyday life or on the houses, and a solid income that comfortably supports a loan of about €500,000 (more details in the financing thread).
We are now considering two options for our own home (goal: around 180 sqm (1,938 sq ft) living space for 2 adults, 2 children, home office, and regular visitors):
Option A) We build the house about 5 km (3 miles) outside the city by expanding, renovating, or starting new. There is no longer a formal development plan there, but the neighborhood is quite mixed, and we are pretty sure we could create something we really like without rush. Another plus: With our equity, we’d only need a comparatively small loan (somewhere between €150,000 and at most €300,000) and would either be debt-free within 10-15 years (in our early/mid-40s) or have a long period of relatively low payments compared to our income. The village is quite sought-after, so we would also likely be able to sell the house well, if needed.
The biggest disadvantage is the location. I don’t work in the nearby city but commute around 250 km (155 miles) per office day, 240 km (149 miles) of that by high-speed train. It’s not a big deal as the train time is working time, and I was already able to work 2, sometimes 3 days from home before COVID, with the city station only 1.5 km (1 mile) away. However, if we moved to the village, the one-way distance to the station would be 8 km (5 miles), and the return trip is quite uphill. It’s certainly doable (I am quite fit cycling and would even welcome a somewhat longer bike ride than at present), especially if I can permanently work three days from home. But in everyday life with kids, it might not be so practical—for example, if my wife can’t leave work, I would easily need 1.5 hours at best to commute. Also, we would lose rental income from here (including terminating a tenancy by a tenant who has lived there since 1975—we aren’t in a hurry, but it just feels unpleasant...) and probably have underestimated the investment required. Therefore…
Option B) We buy an existing property in the city and renovate or expand it. The big, big downside here is the typically inflated and still very competitive property market. It will probably take years to find something, and when you do, you basically have to decide at the first viewing—which is quite stressful for us cautious people. Due to the high purchase price (with additional costs around €550,000 minimum, so a new build is off the table), we would likely have to make many compromises during the renovation based on what I have seen in similar projects.
But we could stay in the city, would only need one car, no monthly passes for the kids, etc.—which is a considerable advantage compared to the loan repayment—and overall, we would probably have more free time since we wouldn’t have to constantly drive the children to sports and other activities.
At the same time, one could argue a third option C): if we choose A, we could sell the property with the house there later and use the proceeds for option B. Then we could probably do everything in the city according to our wishes—and the final situation would be the same: instead of owning two rental homes, we would only have one, but in addition, a valuable house in the city. The only remaining problem would be finding a plot without unpleasant surprises…
Of course, I know this is ultimately our decision to make – but how would you approach it? Has anyone been in the same situation? Neither of us has ever lived in the countryside; what hidden costs might come up there that you wouldn’t have in the city?
I already started a thread in the financing section to estimate a possible loan range. Now we have roughly outlined that and are considering the options available to us.
Here’s a luxury problem:
We currently own two plots of land with rental properties on them. One is in the middle of the city (a 100 sqm (1,076 sq ft) terraced townhouse with a small garden directly on a main road), and the other about 5 km (3 miles) outside the city (a small detached single-family home, on nearly 1,000 sqm (10,764 sq ft) of land, in a quiet location). Additionally, we have €300,000 (including support from relatives) in cash equity plus around €50,000 set aside as a buffer for unexpected expenses in everyday life or on the houses, and a solid income that comfortably supports a loan of about €500,000 (more details in the financing thread).
We are now considering two options for our own home (goal: around 180 sqm (1,938 sq ft) living space for 2 adults, 2 children, home office, and regular visitors):
Option A) We build the house about 5 km (3 miles) outside the city by expanding, renovating, or starting new. There is no longer a formal development plan there, but the neighborhood is quite mixed, and we are pretty sure we could create something we really like without rush. Another plus: With our equity, we’d only need a comparatively small loan (somewhere between €150,000 and at most €300,000) and would either be debt-free within 10-15 years (in our early/mid-40s) or have a long period of relatively low payments compared to our income. The village is quite sought-after, so we would also likely be able to sell the house well, if needed.
The biggest disadvantage is the location. I don’t work in the nearby city but commute around 250 km (155 miles) per office day, 240 km (149 miles) of that by high-speed train. It’s not a big deal as the train time is working time, and I was already able to work 2, sometimes 3 days from home before COVID, with the city station only 1.5 km (1 mile) away. However, if we moved to the village, the one-way distance to the station would be 8 km (5 miles), and the return trip is quite uphill. It’s certainly doable (I am quite fit cycling and would even welcome a somewhat longer bike ride than at present), especially if I can permanently work three days from home. But in everyday life with kids, it might not be so practical—for example, if my wife can’t leave work, I would easily need 1.5 hours at best to commute. Also, we would lose rental income from here (including terminating a tenancy by a tenant who has lived there since 1975—we aren’t in a hurry, but it just feels unpleasant...) and probably have underestimated the investment required. Therefore…
Option B) We buy an existing property in the city and renovate or expand it. The big, big downside here is the typically inflated and still very competitive property market. It will probably take years to find something, and when you do, you basically have to decide at the first viewing—which is quite stressful for us cautious people. Due to the high purchase price (with additional costs around €550,000 minimum, so a new build is off the table), we would likely have to make many compromises during the renovation based on what I have seen in similar projects.
But we could stay in the city, would only need one car, no monthly passes for the kids, etc.—which is a considerable advantage compared to the loan repayment—and overall, we would probably have more free time since we wouldn’t have to constantly drive the children to sports and other activities.
At the same time, one could argue a third option C): if we choose A, we could sell the property with the house there later and use the proceeds for option B. Then we could probably do everything in the city according to our wishes—and the final situation would be the same: instead of owning two rental homes, we would only have one, but in addition, a valuable house in the city. The only remaining problem would be finding a plot without unpleasant surprises…
Of course, I know this is ultimately our decision to make – but how would you approach it? Has anyone been in the same situation? Neither of us has ever lived in the countryside; what hidden costs might come up there that you wouldn’t have in the city?
H
hampshire3 Aug 2020 05:02Land. If you want peace and quiet, you have it at home and don’t have to travel. If you want some activity, the few kilometers (miles) to the city are no problem. When it comes to partying in the city: take a camper van, party, sleep in, and then go back home.
My family and I lived in Berlin for almost a year, and then we moved to the countryside because of work. At first, my wife cried, but now she doesn’t want to leave. You have peace and quiet in the countryside. And if you want to go to Berlin, it’s just 45 minutes by train to Alexanderplatz. So definitely countryside. And during the times of COVID-19, country living has clearly been the better choice.
C
chand19863 Aug 2020 06:38It mainly depends on how you prefer to spend your free time.
Cycling, jogging, walking, foraging for mushrooms/wild plants, gardening, enjoying peace in the forest, tinkering, etc.: COUNTRYSIDE
Eating out, bars, cinema, theater, opera, museums—overall, a greater focus on consumption versus smaller-scale activities: CITY
If you are more like Type 1, the city can be extremely annoying. Type 2 will eventually get frustrated with every commute if living in the countryside.
Cycling, jogging, walking, foraging for mushrooms/wild plants, gardening, enjoying peace in the forest, tinkering, etc.: COUNTRYSIDE
Eating out, bars, cinema, theater, opera, museums—overall, a greater focus on consumption versus smaller-scale activities: CITY
If you are more like Type 1, the city can be extremely annoying. Type 2 will eventually get frustrated with every commute if living in the countryside.
chand1986 schrieb:
It really depends on how you want to spend your free time.
Cycling, jogging, walking, foraging for mushrooms or wild plants, gardening, enjoying peace in the forest, DIY projects, etc.: COUNTRYSIDE
Eating out, bars, cinema, theater, opera, museums, in general more consumer-oriented activities versus smaller, more activity-based ones: CITY
If you’re more type 1, the city is extremely annoying. Type 2 will eventually go crazy with commuting if they live in the countryside. That’s not entirely true. When we lived in Berlin for almost a year, we hardly went out on weekdays because we finished work late. Going out around 7 PM with a 2-year-old child is “complicated.” Of course, weekends were different. However, we lived in Berlin-Buckow, and the commute to the city center by public transport was longer than from our current village. The idea that “city life is great because I can go out during the week” applies to relatively few people and is sometimes disconnected from reality.
Definitely the city.
But I would always base the decision on the commute to work and the specific house, plot, and other factors. I would rather move to the countryside than live in a house like this:
But I would always base the decision on the commute to work and the specific house, plot, and other factors. I would rather move to the countryside than live in a house like this:
dankosos schrieb:
100 sqm (1,076 sq ft) mid-terrace house with a small plot directly on a main road
G
Gelbwoschdd3 Aug 2020 08:20We both grew up in rural areas and then lived in the city for 6 and 13 years respectively, mainly due to education and work. Now we are happy to be back in the countryside. Our time in the city was definitely enjoyable, especially when we were in our mid-twenties. But now we have been living for 4 years in a new build in a rural/small town area and have everything we need here. For us, it was always clear that we wanted to return to the countryside. Less noise and less hustle means better quality of life for us, and in my opinion, it is also much nicer for children to grow up in the countryside. That the plots of land are significantly cheaper is a welcome side effect.