Good morning everyone, and I hope you’re all having a nice Sunday. I’m new here and have quite a bit of text for you 🙄
The topic:
Due to family reasons, we want to move to a larger space and are looking for critical suggestions about which options are possible and make sense. I would appreciate it if you could also question options that we consider unrealistic, in case we are on the wrong track. One option is to buy a property from my father if we build a small new structure for him on the same plot. What possibilities do you think are reasonable?
About us:
We are a family of four: M33, F33, child 5, child 2, living in Hesse in Gelnhausen in the Main-Kinzig district, in a favorable location near the major city Frankfurt am Main, renting an apartment of 92m2 (990 sq ft) for 580€ (cold rent). My wife is a civil servant working full time, and I am permanently employed part-time (50%) in the public sector. In the future, as the kids get older, I plan to increase my hours a bit. Currently, our combined net income is 4500€. Our life philosophy is definitely to enjoy life without focusing too much on money. We travel a lot and don’t want to be financially restricted by a house or rent in the future. This also means we have relatively little savings of about 15000€, which we would prefer to keep as a reserve. Additionally, we have about 10000€ saved in a home savings contract but also a car loan of 250€/month for the next 5 years.
Even though we like our apartment very much (we’ve lived here for 5 years), we will need an additional children’s room. We considered adding a wall in the large living room here and already got landlord approval. However, we are not fully convinced by this solution because the apartment is quite noisy and we also prefer to have a garden for the kids. Staying here would be our last option if nothing else works out.
We regularly look for rental apartments, houses for rent, or houses for purchase. The market is very limited. Every two weeks there is a new listing, and the number of applicants is huge.
Rental apartments:
Some larger apartments of 100m2+ (1,075 sq ft) come up regularly, but they often do not have enough rooms and are listed for over 900€ (cold rent).
Rental houses:
The same applies for rental houses. If any are available, the price is about 1100€+ (cold rent).
Houses for purchase:
There are very few offers, starting at around 400,000€, often needing significant renovation. Since we have little to no equity, buying a house seems quite unrealistic. Agent fees, property transfer tax, and notary will add up to about 50,000€ in additional costs. That does not include any renovation, and our estimated monthly payment would be about 1600€+ for the next 30 years.
Buying my father’s house:
Our current favorite is buying my father’s semi-detached house in the same town. An independent appraisal values it at 200,000€ (100,000€ house, 90,000€ land, 10,000€ outbuildings). The catch/advantage is that my father would like to keep living on the property. We considered this because he lives alone and the house is too big for him. My mother passed away 8 years ago, and I already inherited 1/6 of the house (33,000€, 4/6 belong to my father and 1/6 to my sister). My father has an outstanding mortgage of about 30,000€, so our net equity is roughly 28,000€.
Current situation:
We would buy the entire house from my father and sister and then build a small house or extension on the same property for my father. We currently prefer this approach because we want to avoid paying out my sister after my father passes. He is just shy of 60 years old and will need a small place for the next 25 years.
We see this option as advantageous on several levels:
1. We get a house with a garden without needing much equity
2. My father can downsize
3. We can support each other with vacations, shopping, cooking, etc.
4. Grandpa can look after the grandchildren
5. We can care for him more easily in the future
We both prefer a clear separation. Whatever is built will be clearly separated, even though it belongs to us. If my father moves out later, we would rent the unit or use it for our children.
Is this financially feasible?
This was a lot of background to involve you and hopefully get help in case we are on the wrong track.
We imagine a small unit of about 50m2 (540 sq ft) for him, as inexpensive as possible. It feels strange to move into a house worth 100,000€ and then build a new one for him that costs twice that. We know 100,000€ is not enough, but maybe you have ideas.
We asked several banks about our maximum loan with a target monthly payment of 1000€, comparable to rent, so we can maintain our lifestyle. The bank would lend us 395,000€ under these conditions.
172,000€ for house and land including the inherited share
23,000€ renovation (new small bathroom, new carpet and wallpaper everywhere, possibly moving the stove, possibly breaking through a wall)
10,000€ demolition of the barn
170,000€ left for extension/foundation/expansion (50m2)
= 375,000€, which means a monthly payment of about 1300€ and leaves 20,000€ as reserve in case costs are higher. This fits our desired total monthly payment of 1400€.
450€ would be paid by my father as rent, 950€ by us, and 50€ into savings.
So far, so good. Please critically question the numbers if something looks off.
Extension or barn renovation?
I am attaching a sketch so you can hopefully visualize it better. There are several approaches. At the moment, the barn is connected to the main house by a suspended room.
We want a house with lots of wood inside. It can also be a log cabin. It should have a stove and a small guest room for when my sister visits.
Here are all the ideas so far. In all cases, the garage will be demolished.
1. Renovate the barn
2. Build an extension onto the barn where the garage was
3. Demolish the barn; keep the suspended room and integrate it into the extension
4. Demolish barn and suspended room and build a new structure
5. Do you have alternative ideas?
1. Renovate the barn:
It’s not in the best condition. It’s quite damp. Waterproofing from below would have to be added later (a foundation slab after the fact?). The intermediate ceiling must be removed as there is just enough headroom on the ground floor. The roof probably needs to be replaced. Window openings must be altered and electrical and plumbing installed. A benefit is that the structure already sits on the plot boundaries and so no new negotiations with the building authority or neighbors would be needed.
2. Build an extension onto the barn at the garage site:
A benefit is additional storage space that both we and my father can continue to use. Wood and a workshop area can remain in the barn. A drawback is reduced garden space and the plots would not be clearly separated anymore, as garden and barn are shared.
3. Demolish the barn; keep suspended room integrated into new build:
The advantage is additional space from the suspended room and the covered area it creates. This is useful for hanging laundry or being outside in the rain. A challenge is integrating the suspended room into the new build, which might require custom solutions, increasing the cost. It would also result in a connected extension, as the suspended room links both buildings.
4. Demolish barn and suspended room and build a new structure:
The advantage could be a wider choice of design options for the new building. The question is whether this still counts as an extension. Water and electricity would be supplied via the main house but it would be physically separate.
5. Do you have alternative ideas?
Our current approach
Our first step was to contact an architect who visited the site. Several phone calls followed, during which I noticed we kept discussing things that should have been settled already. I found this very frustrating and exhausting. Now I wonder if going through an architect is the right way or if we can proceed more cheaply otherwise. As mentioned, our requirements are minimal. I do want to share a few points from him here: he said he would tear down the barn and suspended room right away. He considers an extension unproblematic as it is supplied through the main house. Separation would be more difficult.
Open questions
What is the right approach? (Discussing here on the forum what the most sensible option is and then making targeted inquiries, or is there someone who can tell us what is cheapest?)
Who should we contact (another architect, a construction company, a prefab house company)?
Who can answer our questions without focusing on their own profit?
What would you do?
When does an extension officially count as an extension?
Do you have any questions?
Conclusion
I want to thank everyone who started reading, and especially those who have made it this far. 🙂 This is a lot and probably worth 4-10 forum threads. I decided to write everything down in one go to also help myself get organized, which was helpful.
Thank you very much for your help, and it’s great that there is such a large and active forum.
Have a nice Sunday and stay healthy!
The topic:
Due to family reasons, we want to move to a larger space and are looking for critical suggestions about which options are possible and make sense. I would appreciate it if you could also question options that we consider unrealistic, in case we are on the wrong track. One option is to buy a property from my father if we build a small new structure for him on the same plot. What possibilities do you think are reasonable?
About us:
We are a family of four: M33, F33, child 5, child 2, living in Hesse in Gelnhausen in the Main-Kinzig district, in a favorable location near the major city Frankfurt am Main, renting an apartment of 92m2 (990 sq ft) for 580€ (cold rent). My wife is a civil servant working full time, and I am permanently employed part-time (50%) in the public sector. In the future, as the kids get older, I plan to increase my hours a bit. Currently, our combined net income is 4500€. Our life philosophy is definitely to enjoy life without focusing too much on money. We travel a lot and don’t want to be financially restricted by a house or rent in the future. This also means we have relatively little savings of about 15000€, which we would prefer to keep as a reserve. Additionally, we have about 10000€ saved in a home savings contract but also a car loan of 250€/month for the next 5 years.
Even though we like our apartment very much (we’ve lived here for 5 years), we will need an additional children’s room. We considered adding a wall in the large living room here and already got landlord approval. However, we are not fully convinced by this solution because the apartment is quite noisy and we also prefer to have a garden for the kids. Staying here would be our last option if nothing else works out.
We regularly look for rental apartments, houses for rent, or houses for purchase. The market is very limited. Every two weeks there is a new listing, and the number of applicants is huge.
Rental apartments:
Some larger apartments of 100m2+ (1,075 sq ft) come up regularly, but they often do not have enough rooms and are listed for over 900€ (cold rent).
Rental houses:
The same applies for rental houses. If any are available, the price is about 1100€+ (cold rent).
Houses for purchase:
There are very few offers, starting at around 400,000€, often needing significant renovation. Since we have little to no equity, buying a house seems quite unrealistic. Agent fees, property transfer tax, and notary will add up to about 50,000€ in additional costs. That does not include any renovation, and our estimated monthly payment would be about 1600€+ for the next 30 years.
Buying my father’s house:
Our current favorite is buying my father’s semi-detached house in the same town. An independent appraisal values it at 200,000€ (100,000€ house, 90,000€ land, 10,000€ outbuildings). The catch/advantage is that my father would like to keep living on the property. We considered this because he lives alone and the house is too big for him. My mother passed away 8 years ago, and I already inherited 1/6 of the house (33,000€, 4/6 belong to my father and 1/6 to my sister). My father has an outstanding mortgage of about 30,000€, so our net equity is roughly 28,000€.
Current situation:
We would buy the entire house from my father and sister and then build a small house or extension on the same property for my father. We currently prefer this approach because we want to avoid paying out my sister after my father passes. He is just shy of 60 years old and will need a small place for the next 25 years.
We see this option as advantageous on several levels:
1. We get a house with a garden without needing much equity
2. My father can downsize
3. We can support each other with vacations, shopping, cooking, etc.
4. Grandpa can look after the grandchildren
5. We can care for him more easily in the future
We both prefer a clear separation. Whatever is built will be clearly separated, even though it belongs to us. If my father moves out later, we would rent the unit or use it for our children.
Is this financially feasible?
This was a lot of background to involve you and hopefully get help in case we are on the wrong track.
We imagine a small unit of about 50m2 (540 sq ft) for him, as inexpensive as possible. It feels strange to move into a house worth 100,000€ and then build a new one for him that costs twice that. We know 100,000€ is not enough, but maybe you have ideas.
We asked several banks about our maximum loan with a target monthly payment of 1000€, comparable to rent, so we can maintain our lifestyle. The bank would lend us 395,000€ under these conditions.
172,000€ for house and land including the inherited share
23,000€ renovation (new small bathroom, new carpet and wallpaper everywhere, possibly moving the stove, possibly breaking through a wall)
10,000€ demolition of the barn
170,000€ left for extension/foundation/expansion (50m2)
= 375,000€, which means a monthly payment of about 1300€ and leaves 20,000€ as reserve in case costs are higher. This fits our desired total monthly payment of 1400€.
450€ would be paid by my father as rent, 950€ by us, and 50€ into savings.
So far, so good. Please critically question the numbers if something looks off.
Extension or barn renovation?
I am attaching a sketch so you can hopefully visualize it better. There are several approaches. At the moment, the barn is connected to the main house by a suspended room.
We want a house with lots of wood inside. It can also be a log cabin. It should have a stove and a small guest room for when my sister visits.
Here are all the ideas so far. In all cases, the garage will be demolished.
1. Renovate the barn
2. Build an extension onto the barn where the garage was
3. Demolish the barn; keep the suspended room and integrate it into the extension
4. Demolish barn and suspended room and build a new structure
5. Do you have alternative ideas?
1. Renovate the barn:
It’s not in the best condition. It’s quite damp. Waterproofing from below would have to be added later (a foundation slab after the fact?). The intermediate ceiling must be removed as there is just enough headroom on the ground floor. The roof probably needs to be replaced. Window openings must be altered and electrical and plumbing installed. A benefit is that the structure already sits on the plot boundaries and so no new negotiations with the building authority or neighbors would be needed.
2. Build an extension onto the barn at the garage site:
A benefit is additional storage space that both we and my father can continue to use. Wood and a workshop area can remain in the barn. A drawback is reduced garden space and the plots would not be clearly separated anymore, as garden and barn are shared.
3. Demolish the barn; keep suspended room integrated into new build:
The advantage is additional space from the suspended room and the covered area it creates. This is useful for hanging laundry or being outside in the rain. A challenge is integrating the suspended room into the new build, which might require custom solutions, increasing the cost. It would also result in a connected extension, as the suspended room links both buildings.
4. Demolish barn and suspended room and build a new structure:
The advantage could be a wider choice of design options for the new building. The question is whether this still counts as an extension. Water and electricity would be supplied via the main house but it would be physically separate.
5. Do you have alternative ideas?
Our current approach
Our first step was to contact an architect who visited the site. Several phone calls followed, during which I noticed we kept discussing things that should have been settled already. I found this very frustrating and exhausting. Now I wonder if going through an architect is the right way or if we can proceed more cheaply otherwise. As mentioned, our requirements are minimal. I do want to share a few points from him here: he said he would tear down the barn and suspended room right away. He considers an extension unproblematic as it is supplied through the main house. Separation would be more difficult.
Open questions
What is the right approach? (Discussing here on the forum what the most sensible option is and then making targeted inquiries, or is there someone who can tell us what is cheapest?)
Who should we contact (another architect, a construction company, a prefab house company)?
Who can answer our questions without focusing on their own profit?
What would you do?
When does an extension officially count as an extension?
Do you have any questions?
Conclusion
I want to thank everyone who started reading, and especially those who have made it this far. 🙂 This is a lot and probably worth 4-10 forum threads. I decided to write everything down in one go to also help myself get organized, which was helpful.
Thank you very much for your help, and it’s great that there is such a large and active forum.
Have a nice Sunday and stay healthy!
What about the building envelope? Or rather, what does the building authority say about what additional construction is allowed there?
Also, if you haven't really saved anything with a €580 (about $630) rent without utilities and don't want to limit yourselves, is a mortgage payment twice as high acceptable for you? There are usually additional costs associated with owning a house...
Also, if you haven't really saved anything with a €580 (about $630) rent without utilities and don't want to limit yourselves, is a mortgage payment twice as high acceptable for you? There are usually additional costs associated with owning a house...
H
Hausbautraum2017 Jan 2021 17:24What I don’t understand:
Why is your father’s house worth 200k, while everything else starts at 400k?
Ideally, it would make more sense for you to buy a house yourselves in the 300-400k range.
You would have to grant your dad a lifetime right of residence, wouldn’t you? At least, I personally wouldn’t do it if I were in his position.
I’m not sure how the bank evaluates that, but it definitely lowers the value significantly.
Your dad’s rent would be taxable or might not even be recognized by the bank.
Overall, I can’t currently see a viable solution for you, but that’s just my personal opinion. We manage a much larger loan with the same income, but we have a completely different lifestyle than you do, and that’s what we want.
You should at least calmly reconsider and plan. The option to build for your dad isn’t going anywhere, so I would definitely save equity for at least one year to at least cover incidental costs.
Which of your options regarding the barn is sensible can only be answered by an architect, and probably only on site.
My cousin renovated my uncle’s barn, and that was much cheaper than building new, but that is very individual.
Why is your father’s house worth 200k, while everything else starts at 400k?
Ideally, it would make more sense for you to buy a house yourselves in the 300-400k range.
You would have to grant your dad a lifetime right of residence, wouldn’t you? At least, I personally wouldn’t do it if I were in his position.
I’m not sure how the bank evaluates that, but it definitely lowers the value significantly.
Your dad’s rent would be taxable or might not even be recognized by the bank.
Overall, I can’t currently see a viable solution for you, but that’s just my personal opinion. We manage a much larger loan with the same income, but we have a completely different lifestyle than you do, and that’s what we want.
You should at least calmly reconsider and plan. The option to build for your dad isn’t going anywhere, so I would definitely save equity for at least one year to at least cover incidental costs.
Which of your options regarding the barn is sensible can only be answered by an architect, and probably only on site.
My cousin renovated my uncle’s barn, and that was much cheaper than building new, but that is very individual.
Hi there, thank you for reading and for your questions.
I can’t say anything about the building envelope yet; that would only be relevant if we were extending onto the barn, right? So far, I’ve assumed that we are allowed to build again where the barn currently stands. Contact with the building authority was brief, and it gave the impression that there are no further restrictions in the area. The architect said the same.
To be honest, I don’t really know the procedure yet. It sounded like I would have to submit a preliminary building application to the building authority for every question. This has to be prepared by the architect. That sounds like a lot of money for an idea that might then be discarded.
Thank you also for the critical question about the feasibility of the double financial burden and the fact that we haven’t saved anything yet. We are sure that we could afford a much higher payment if we wanted to, but for the reasons mentioned, we prefer not to. We haven’t been able to save anything because I was still studying and we had two children in the last five years. So we only had parental allowance, which meant almost 2000€ (about 2200 USD) less per month compared to now. We also converted a panel van into a camper, which is money that we probably could have saved otherwise. But it’s great that you are pressing this point again because we don’t want to live for the house; it’s just a place to look forward to vacation again 🙂
I can’t say anything about the building envelope yet; that would only be relevant if we were extending onto the barn, right? So far, I’ve assumed that we are allowed to build again where the barn currently stands. Contact with the building authority was brief, and it gave the impression that there are no further restrictions in the area. The architect said the same.
To be honest, I don’t really know the procedure yet. It sounded like I would have to submit a preliminary building application to the building authority for every question. This has to be prepared by the architect. That sounds like a lot of money for an idea that might then be discarded.
Thank you also for the critical question about the feasibility of the double financial burden and the fact that we haven’t saved anything yet. We are sure that we could afford a much higher payment if we wanted to, but for the reasons mentioned, we prefer not to. We haven’t been able to save anything because I was still studying and we had two children in the last five years. So we only had parental allowance, which meant almost 2000€ (about 2200 USD) less per month compared to now. We also converted a panel van into a camper, which is money that we probably could have saved otherwise. But it’s great that you are pressing this point again because we don’t want to live for the house; it’s just a place to look forward to vacation again 🙂
Hausbautraum20 schrieb:
What I don’t understand:
Why is your father’s house valued at 200k and on the other hand, there are only properties starting from 400k?
Ideally, you should buy a house yourselves for around 300-400k.
You would also have to grant your dad a lifelong right of residence, right? At least, I wouldn’t do it if I were in your father’s position.
I don’t know how the bank evaluates that, but it definitely lowers the value significantly.
Your dad’s rent would be taxable or might not even be recognized by the bank.
Overall, I can’t really imagine any of the solutions working for you at the moment, but that’s just my personal opinion. We manage much higher loans with the same income, but our lifestyle is very different from yours and that’s what we want.
You should at least take your time to rethink and plan carefully. The option to build for your dad isn’t going anywhere, so I would definitely save equity for at least a year to cover additional costs.
Which option for the barn makes sense can only be answered by an architect, probably only on site.
My cousin converted my uncle’s barn, and that was much cheaper than building new, but that will be very individual. There are barely any houses offered at all. And those that are available are overpriced.
The value of my father’s house was determined by appraisers who are said to assess properties lower than average. Even our banks accepted higher values based on calculations. But I think this works in our favor. The appraisal shows the house is in good condition and will not require much investment in the near future.
Regarding saving equity:
We will need a larger apartment or house in the near future (1-2 years), not in 10 years. But assuming we set aside €600 per month (currently only €300 go into the building savings plan) to simulate a future mortgage payment with some buffer, we would have €7,200 per year and €50,000 equity in 7 years. (For which additional costs would that be sufficient? We can cover the additional costs for my father’s house.) After 7 years, we will both be 40 and house prices will probably be higher. Also, the period to repay the loan would be shorter. Will there then be more houses available?
With the option involving my father, we already have €28,000 equity plus our building savings plan. And we know what we have.
My father will sell his house elsewhere if we don’t take it. The only question is when. He’s not attached to it, but he likes the land. We will grant him residential rights in the contract, but he understands that if we sell, he will have to leave. The bank also indicated this.
I have already spoken to the tax advisor.
Regarding the barn conversion: Is consulting an architect the only or best way, or can this be approached differently?
Thank you as well for your critical questions.
What I don’t fully understand: You pay your father the full price for the house, build an extension for him with lifelong right of residence and a low rent. That’s already a pretty good deal for him, but it significantly increases your total costs. Does your father depend on the money? In my opinion, it would be fairer to calculate the right of residence into the price and, for example, pay him only 50% of the house’s value. Then you could also skip the base rent; he would only cover the operating costs.
But I agree with the others’ assessments: A semi-detached house in good condition with a large plot is only worth 200,000 (e.g., dollars/pounds) while other properties needing renovation are worth twice as much? Or is this already the ‘family-friend price’ that takes the right of residence into account but disadvantages your sister somewhat?
But I agree with the others’ assessments: A semi-detached house in good condition with a large plot is only worth 200,000 (e.g., dollars/pounds) while other properties needing renovation are worth twice as much? Or is this already the ‘family-friend price’ that takes the right of residence into account but disadvantages your sister somewhat?