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?
Smirnoff1983 schrieb:
But there are also advantages like “fresh products directly from the producer.” We buy our meat straight from the small local farmer nearby, raw milk directly from the dairy farmer, and so on… such things even exist in OWL (northern NRW). I dare say that every larger city has dozens of such farms nearby. Maybe not right in the center of Berlin, Hamburg, and Munich, but in a city of 130,000 € (approximately $140,000) there are plenty around.
haydee schrieb:
Public transport, what is that? I find the newly introduced e-scooters very practical, which you can rent almost anywhere. Perfect for the last mile or to get home from the pub in the evening.
Tassimat schrieb:
I dare say that every larger city has dozens of such farms nearby. Maybe not right in the center of Berlin, Hamburg, or Munich, but around a city with 130,000€ (approximately 140,000 USD) you’ll find them all around.
I find the newly popular e-scooters very practical—they can be rented almost anywhere. Perfect for the last mile or to get home from the pub in the evening. Do you only drink non-alcoholic beverages at the pub? Then there’s no need to go to the pub in the first place.
Everyone has their preferences. Personally, I usually prefer the countryside over the city—unless you really have to commute for an hour. In that case, spending time with family becomes more important to me.
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pagoni20203 Aug 2020 13:35Smirnoff1983 schrieb:
The biggest drawback of country living is that you are dependent on a car. ...yet I often meet city dwellers who hardly ever use public transport, even though it is available... and still own cars—and pay for expensive underground parking spaces.
S
Smirnoff19833 Aug 2020 13:40pagoni2020 schrieb:
....I keep meeting city dwellers who hardly ever use public transport, even though it’s available....and yet they own cars—and pay for expensive underground parking spaces. I have never understood the point of that either. Here, only school buses operate regularly; there is also a demand-responsive bus service (which most city people are not familiar with). But after 5 p.m., public transport basically stops running.
Back when I was younger, everyone in my group first got a moped license, and by 18, the regular driver’s license. Those in apprenticeships had their own cars right away, and the others (high school graduates plus university students) used their parents’ cars.
I find it a bit strange to start worrying now about what will happen when the kids reach the "club-going age." Honestly? I would choose the place where I feel most comfortable with my partner. Where we want to live and what advantages we have. The issue with the children will work itself out. In the end, if I buy a house in the city against my own preferences, and when the child is 16, they tell me they’d rather play video games than go to the club.