ᐅ Purchase of a Property with Existing Structures; Future New Construction Planned

Hello dear community,

We will soon be purchasing a plot of land with an empty house (approximately from the 1950s/60s) and plan to build a new house there in the medium term.
For now, the property will remain unused for about 2-5 years to allow for further savings of equity and due to my wife’s current employment situation (currently on parental leave; a permanent job is required for the mortgage).
I have a few questions and would appreciate your experiences and advice.

(1) Tear down the house immediately or leave it empty: What are the risks and obligations if I demolish the house right away or leave it vacant? What factors should I consider? How would you proceed?
(2) Under what conditions could it make sense to rent out such an old house again? (With manageable renovation) My common sense tells me this would cause more hassle than benefits: obligation to renovate, energy certificate, new heating system, termination of lease for new construction, etc.
(3) If I demolish the house immediately, what should I do with the basement? We want to build without a basement. Would the excavation be filled and compacted with F1 sand? (The new build will also be significantly larger than the existing building)
(4) Could it make sense to set up a permanent construction water supply immediately after demolition? Background: If the water connection is inactive for more than one year, it is removed in our district, and I would have to pay over €10,000 (ten thousand euros) again for the street connection during new construction.
(5) Related to (4): Is it possible to arrange a longer-term temporary construction electricity connection? This would be necessary to heat the construction water supply in winter and to have electricity on site if needed. Renting construction power boxes with monthly inspections would likely be very expensive. Are there alternatives?
(6) Achieving cost savings on the house build through a long planning horizon: What options do I have to reduce costs for the new build by planning over a longer period? Are there any tips on how to make this disadvantageous situation work to my advantage?
(7) Using or monetizing the undeveloped plot in the meantime: Are there ways to make meaningful use of or even monetize the undeveloped land during this interim? If construction electricity and water supply are available, could the garden be used or maybe even leased?

Thank you in advance for your help and advice!

Schnubbihh schrieb:

(1) Demolish the house immediately or leave it vacant: What are the risks and obligations if I demolish the house right away or leave it empty? What factors should I consider? How would you proceed?

You could write entire novels about this.
Consider: insurance, property tax (if you demolish, check if you only pay land tax for the next five years), potential vandalism.

Schnubbihh schrieb:

(2) Under what conditions could it make sense to rent out such an old house again? (with manageable renovation) Common sense tells me this would cause more hassle than benefits: renovation obligations, energy certificate, new heating system, termination rules in case of new construction, etc.

It depends on what exactly would need to be done. Renovation obligations vary—read up on what you are legally required to do. Keep in mind that if something must be done, you usually have two years to comply.
By the way, no one routinely checks on this. Not that I’m encouraging ignoring it completely, but this is often the reality.
Energy certificate? So what. No plaintiff, no judge. Besides, creating one online costs very little and takes about 5-10 minutes. Its meaningfulness? Not much, as with many energy certificates.
Termination due to new construction? No. Just provide a fixed-term lease initially for two years. Then after two years, the issue is settled and you can rent out again if needed.

Schnubbihh schrieb:

(3) If I demolish the house immediately, how do I deal with the basement? We plan to build without a basement. Would the pit be filled and compacted with F1 sand? (The new building will also be significantly larger than the existing one.)

You’ll know this once you have the new building plans.

Schnubbihh schrieb:

(4) Could it make sense to install a permanent construction water connection right after demolition? Background: If the water line is inactive for more than a year, it is decommissioned in our district, and I would have to pay over €10,000 for the street tapping again for the new build.

Depends on the cost of the construction water connection. Also, won’t new water supply lines be installed anyway for your new build, or am I misunderstanding your project? For example, we drilled a well for our build (€600) because we wanted it for the garden anyway. Think outside the box—maybe something similar could work for you.

Schnubbihh schrieb:

(5) Related to (4): Is it possible to get a long-term temporary electricity connection for construction? This would be needed to keep the construction water connection heated in winter and to have power on site if needed. Renting standard construction power boxes with monthly inspections would likely cause costs to explode. Are there alternatives?

Buy a construction power box secondhand (e.g., on classified ads). You would need to check how long construction power can remain connected without usage.
Regarding (4) and (5), I would be concerned about vandalism over several years. I would NOT leave those connections unused onsite for years.

Schnubbihh schrieb:

(6) Cost savings in house building through a long planning horizon? What options do I have to save costs on the new build by planning far ahead? Are there any tips on how to use this unfavorable situation to my advantage?

How about cost increases due to a long planning horizon? You really can’t optimize enough over several years to outweigh steadily rising construction costs. Sorry, waiting longer will be more expensive, not cheaper…

Schnubbihh schrieb:

(7) Using or monetizing the vacant land somehow? Are there ways to use the vacant land in the meantime meaningfully or even monetize it? If construction power/water are available, could you consider use or even leasing of the garden?

Use it to park trailers, caravans, etc.
Farmers around here do this with their old barns and farmyard parking spots. However, that involves insurance costs.
Otherwise, think about who might need a plot of land for a while—I can’t think of much more. Usually, whether built on (but unoccupied) or vacant, a property just costs money over time and doesn’t generate any income.

Thank you very much for the quick response.
I’m not too worried about vandalism for now, as the location is in a quiet cul-de-sac with no through traffic or incidental passers-by.

nordanney schrieb:

It depends on the cost of connecting the construction water supply. Apart from that, water lines will have to be newly installed for your new build anyway, or am I mistaken about your project? For example, we had a well drilled for our construction (600€), since we wanted it for the garden anyway. Thinking outside the box – maybe something like that could work for you as well?

Buy a temporary construction power box yourself from classifieds. You’ll have to check whether construction power can be kept that long without use.
Regarding points 4) and 5), I would be concerned over several years that vandalism might become an issue. I would NOT leave either connection unused on the property for years.

From everything I have been able to find out, we could reuse the existing connection from the old building (relatively new pipe) for construction water and then for the new building afterward. However, if the line were to remain unused, we would be required to install a new connection from the street after more than 12 months... So the alternative is to use construction water (possibly for garden irrigation), and then switch to using it for the new building after a few years.

nordanney schrieb:

How about factoring in cost increases due to the long planning horizon? You can’t optimize enough over the years to offset the continual rise in construction costs. Sorry, waiting longer will be more expensive, not cheaper...

Yes, I feel the same way, especially since in 2-5 years we will no longer be eligible for any subsidies. However, the overall project still feels too risky for me to tackle immediately. Our family planning is now complete, and in the coming years we have the option to rely on at least 1.5 incomes (instead of 1) again, and start paying down part of the land in the meantime.

Schnubbihh schrieb:

I’m not too worried about vandalism at first, since the location is in a quiet cul-de-sac with no through traffic or occasional passersby.

Ideal location for vandalism. If the house is still standing, it would be a good place for a youth gang to hang out.
Actually, vacant houses are quite common. Just think about how many old buildings stand empty here in the Ruhr area that no one wants or that are uninhabitable.

Schnubbihh schrieb:

Yes, I feel the same way. Especially because in 2 to 5 years we won’t be eligible for any subsidies anymore.

I’m absolutely sure you will still receive support in 2 to 5 years. At least for highly energy-efficient new construction—one way or another.

Schnubbihh schrieb:

At first, I'm not too worried about vandalism,

But yes, you are planning some (demolition of an existing building, of which you report no "disadvantages" except for a gifted basement).

Schnubbihh schrieb:

Now the plot has to remain unused for about 2 to 5 years to save more equity and due to my wife’s current professional situation (parental leave, a permanent position is required for the loan).

Saving equity for demolition and additional costs, despite parental leave = an additional financial burden already present. Some days I wonder repeatedly how many warnings some people simply can't hear.

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11ant schrieb:

But you are planning which (demolition of an existing building, of which you report no "disadvantages" except for a gifted basement).

Just because I don’t mention the disadvantages here doesn’t mean they don’t exist.
The house is old, worn down, and lacking substance. In the basement, I can’t even stand upright due to the height; it’s damp, the house has a footprint of a maximum of 60-70 sqm (645-750 sq ft) (we are five people), and so on. Renovation is simply out of the question. It’s no coincidence that I wonder whether the house can still be rented out at all, or if it’s even allowed to rent it out.

11ant schrieb:

Saving equity for demolition and additional costs, despite parental leave = additional financial needs with a child already born. Some days I wonder how many warnings some people fail to hear.

I believe everyone is best suited to assess their own situation. I have a clear overview of how much surplus we generate (despite having children). It should be clear that the situation will ease somewhat once another 2–3 annual bonuses have been paid out and my wife has a stable income again. But I’m also aware that we won’t have gained anything if we experience price increases similar to those in 2021/22.