ᐅ New Construction or Buying and Renovating a House in Bavaria
Created on: 26 Oct 2023 22:51
W
Wo1z3rlHello everyone,
I have been a mostly silent reader in this forum for several years. About four years ago, my husband and I moved from the city to the Bavarian countryside, and for the past three years, we have been searching for a suitable property. Unfortunately, we never really found the right one—sometimes we were a day too late, other times the desired property was sold to a neighbor, and so on.
We are a family of four, with two children aged 2 1/2 and 5 years. I work full-time, while my husband is a stay-at-home dad. We have good savings and an additional net income of about 4,500 euros (including child and family allowances but excluding potential bonuses).
Here is the situation: My grandmother owns a plot of land in our town, about 1,200 m² (of which approximately 300 m² is a private road, so around 900 m² could be built on). About a year ago, she offered to transfer this land to us free of charge (to give some context, the standard land value in the new development area is about 135 euros per m²). After talking with my grandmother, I discussed this with the potential heirs—my father and three uncles—and initially, none of them seemed to have any objections. However, at least one uncle appears to have some underlying concerns, as he began discussing my grandmother’s possible will with her (there is none), which she did not appreciate at all.
The plot is located in the center of town and is not subject to a specific development plan but is designated as a mixed-use area in the land-use plan. The neighboring properties mostly consist of pitched-roof houses, ranging from single-family homes to multi-family buildings. In 2003, there was an approved building permit process for a house with a granny flat initiated by one of my uncles, but he eventually decided against building. The floor plans are no longer really up to date (pellet heating with a large tank in the basement, etc.); my uncle showed them to me. To make a long story short, my husband and I decided at that time, after the whole drama (and because I am quite picky and would prefer a south- or west-facing slope), to continue looking for renovation projects instead.
Currently, in our region, only run-down properties are available for at least 250,000 euros, while reasonably decent houses, mostly from the 1980s, cost around 450,000 euros. There have also been new semi-detached houses in the neighboring town priced at 430,000 euros, but these are too small for us (lack of a home office), and the neighboring town is remote with no shops within walking distance.
My father-in-law currently lives in the apartment next to us. If we can afford it, we would like to include him in a granny flat or separate apartment. Most of the older existing properties have very large living spaces of 220-300 m², so it seemed logical and sensible to us to somehow integrate him into the planning. We would of course try to do the same in a new build.
The big question now is whether we should continue looking for a renovation project or seize the opportunity to build on my grandmother’s land? We envision a house with about 160 m² of living space, a 40 m² (430 sq ft) granny flat, and a double carport—all within a budget of about 500,000 euros plus a 10% buffer. According to the rule of thumb of 3,000 euros per m², this seems very tight. :-(
My husband usually has some free time in the mornings, but in my opinion, he lacks significant practical skills, so I would try to subcontract all trades.
I have already compiled a list of construction companies within a radius of about 50 kilometers (30 miles). The issue that concerns me currently is the financial stability or liquidity of these companies: They are usually limited liability companies—how should one assess this as a potential future builder? Would it be better to avoid smaller firms and choose a larger one?
Thank you very much for reading!
I have been a mostly silent reader in this forum for several years. About four years ago, my husband and I moved from the city to the Bavarian countryside, and for the past three years, we have been searching for a suitable property. Unfortunately, we never really found the right one—sometimes we were a day too late, other times the desired property was sold to a neighbor, and so on.
We are a family of four, with two children aged 2 1/2 and 5 years. I work full-time, while my husband is a stay-at-home dad. We have good savings and an additional net income of about 4,500 euros (including child and family allowances but excluding potential bonuses).
Here is the situation: My grandmother owns a plot of land in our town, about 1,200 m² (of which approximately 300 m² is a private road, so around 900 m² could be built on). About a year ago, she offered to transfer this land to us free of charge (to give some context, the standard land value in the new development area is about 135 euros per m²). After talking with my grandmother, I discussed this with the potential heirs—my father and three uncles—and initially, none of them seemed to have any objections. However, at least one uncle appears to have some underlying concerns, as he began discussing my grandmother’s possible will with her (there is none), which she did not appreciate at all.
The plot is located in the center of town and is not subject to a specific development plan but is designated as a mixed-use area in the land-use plan. The neighboring properties mostly consist of pitched-roof houses, ranging from single-family homes to multi-family buildings. In 2003, there was an approved building permit process for a house with a granny flat initiated by one of my uncles, but he eventually decided against building. The floor plans are no longer really up to date (pellet heating with a large tank in the basement, etc.); my uncle showed them to me. To make a long story short, my husband and I decided at that time, after the whole drama (and because I am quite picky and would prefer a south- or west-facing slope), to continue looking for renovation projects instead.
Currently, in our region, only run-down properties are available for at least 250,000 euros, while reasonably decent houses, mostly from the 1980s, cost around 450,000 euros. There have also been new semi-detached houses in the neighboring town priced at 430,000 euros, but these are too small for us (lack of a home office), and the neighboring town is remote with no shops within walking distance.
My father-in-law currently lives in the apartment next to us. If we can afford it, we would like to include him in a granny flat or separate apartment. Most of the older existing properties have very large living spaces of 220-300 m², so it seemed logical and sensible to us to somehow integrate him into the planning. We would of course try to do the same in a new build.
The big question now is whether we should continue looking for a renovation project or seize the opportunity to build on my grandmother’s land? We envision a house with about 160 m² of living space, a 40 m² (430 sq ft) granny flat, and a double carport—all within a budget of about 500,000 euros plus a 10% buffer. According to the rule of thumb of 3,000 euros per m², this seems very tight. :-(
My husband usually has some free time in the mornings, but in my opinion, he lacks significant practical skills, so I would try to subcontract all trades.
I have already compiled a list of construction companies within a radius of about 50 kilometers (30 miles). The issue that concerns me currently is the financial stability or liquidity of these companies: They are usually limited liability companies—how should one assess this as a potential future builder? Would it be better to avoid smaller firms and choose a larger one?
Thank you very much for reading!
Wo1z3rl schrieb:
All that with a budget of around 500,000 euros plus a 10% buffer? According to the rule of thumb of 3,000 euros per square meter, that’s going to be really tight. :-(… the problem is also that the rule of thumb only refers to the living area or the house itself. On top of that, there are additional construction costs, garage, external works including terrace and driveway. Is it a sloped plot?
Wo1z3rl schrieb:
I have already compiled a list of construction companies within a radius of about 50 kilometers (31 miles). My current concern is the financial stability or liquidity of these companies: they are mostly limited liability companies (LLCs). How can a prospective homeowner assess this? Would it be better to avoid smaller companies and choose a larger one instead? A 50 km (31 miles) radius is quite large; to me, this suggests little planning in your selection process and more of a wish to have a wide pool of candidates. A qualified architect should be able to recommend suitable companies. An LLC is the typical legal form for a construction company, and a company’s financial health is not strongly dependent on its legal structure. If LLCs seem too small for you, what do you expect from a public limited company (PLC) or something similar?
There is no “too big to fail.” A completion guarantee is more useful—and, of course, an architect who knows the reliable contractors.
I professionally search for architects and construction companies and have contributed several posts here in the “Experiences with Construction Companies” section. Assessing companies is not rocket science; check those posts for advice. It is somewhat a matter of experience, and can’t be fully explained in half an hour. But first, consult a financial advisor before planning your house. With a preliminary design from them, you can then conduct a more focused search. I also recommend a proper tender process, and the responsiveness of the bidders can already tell you a lot.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
K
KarstenausNRW27 Oct 2023 09:21Wo1z3rl schrieb:
The situation in our region is that only run-down properties are available for at least 250,000 euros, while decent houses, mostly from the 1980s, cost around 450,000 euros. In my opinion, choosing the construction year is like choosing between the plague and cholera. Houses built in the 1980s are exactly at the age where significant renovation is needed. Roofs are often nearing the end of their lifespan. Heating systems are oil-fired or similar with old radiators; windows are only slightly better than the single glazing found in the run-down properties, with energy efficiency ratings from G to Z, and so on.
I would rather choose something much older where you know you have to renovate everything, and the purchase price reflects that. With houses from the 1980s, some work might have been done in the meantime or they look well maintained – which leads the seller to expect a high price. You think you can just move in (which you can), but once inside, you don’t like the outdated beige bathroom anymore. Or the heating costs are painful, and your feet are always cold (no underfloor heating, cellar ceiling not insulated), and so forth.
Wo1z3rl schrieb:
The big question now is whether we should continue trying to find a renovation project or seize the opportunity to build on grandma’s land? We’re thinking of a house with about 160 m² (1,722 sq ft) of living space, a 40 m² (430 sq ft) granny flat, and a double carport – all within a budget of around 500,000 euros plus a 10% buffer? According to the rough rule of thumb of 3,000 euros per m², that seems really tight. :-( Good question, next question.
With a budget of 550,000 euros for a fully completed 200 m² (2,153 sq ft) house, I wouldn’t want to (and probably couldn’t) build right now with contractors. Depending on soil conditions (foundation, slope), site development (utility connections), architect, driveway, terrace, and so forth, the first 75,000 to 175,000 euros can easily be spent before building even starts.
That leaves only about 450,000 euros for the house itself (for two separate units, meaning more expensive bathrooms, more electrical work, more entrances, etc.).
That equals about 2,250 euros per m² (209 dollars per sq ft) for construction costs alone, and that just won’t work.
ypg schrieb:
… the problem is also that the rule of thumb only refers to the living area or the house itself. Additional costs include auxiliary construction costs, garage, outdoor areas like the terrace and driveway.
Is it a sloped plot? Yes, that's correct. My uncle’s original plan included a basement for living space. I added a photo from January; the street area is included as well. Behind the row of apple trees, there is still a strip of land about 1.5 m (5 feet) wide.
@11ant
Thank you for your detailed post. Unfortunately, we don’t have anyone among our relatives or acquaintances who has built with an architect in the last twenty years. So far, I have selected a lady I want to contact once I regain my voice (thanks to this cold!).
Regarding construction companies: We live quite rurally here (Lower Bavaria), and within a 20 km (12 miles) radius, the options are already quite limited. Therefore, I initially considered companies recommended by friends and coworkers, even if they are located a bit farther away. These companies also build in Munich, which is about a 2-hour one-way trip for them.
The construction completion guarantee sounds exactly like the kind of security I was looking for. Many thanks for that!
The 550,000 Euro budget is what we have planned for the home itself, without involving a financial planner.
If the granny flat can be reasonably incorporated into our building project, then my father-in-law might be able to contribute the additional costs from selling his current (not barrier-free and too large) apartment. We were already close to buying an existing property, and he would have moved in without hesitation and shared the renovation costs.
KarstenausNRW schrieb:
Good question, next question.
Personally, I would not want (or be able) to build a 200 m2 (2,150 sq ft) house with a total budget of 550,000 Euros using contractors because depending on soil conditions (foundations, sloped site), site development (utility connections), architect fees, driveway, terrace, etc., the first 75,000 to 175,000 Euros easily go on those items. That leaves only about 450,000 Euros for the house itself (without significant DIY as you mentioned), and that includes two living units with more expensive bathrooms, extra electrical work, additional entrances, etc.
That results in about 2,250 Euros per square meter (approximately 210 USD per sq ft) for construction costs. This is not realistic. From the responses, I conclude that we can probably manage a house of around 155 m2 (1,670 sq ft) with our own funds, but we should discuss the granny flat again with my father-in-law.
Regarding the challenges with 1980s houses, I completely agree. Around here, it was apparently common to include a sauna area in the basement, balconies stretching some 15 linear meters (50 feet), and everything clad with maintenance-intensive wood paneling. All that needs thorough refurbishment first…
H
hanghaus202327 Oct 2023 10:56If your grandmother simply leaves it to you like that, that’s good. However, in my opinion, it won’t be completely free. (gift tax, property transfer tax, notary, land register, development fees, etc.)
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