ᐅ Renovation or New Construction? Buying a House with a Large Plot of Land!

Hello community,

We have the opportunity to quickly purchase a house (160 m2 (1,722 sq ft) living area, built in 1966, with 7 rooms) on a large plot of land (1,400 m2 (15,070 sq ft)). The structure is in good condition, solidly built, with a basement. We have basically already decided to buy it, as it’s a unique chance in our area!

However, there are several options for what we can do with the property:

Option 1:
Renovate the house and keep the plot. We would completely renovate it, including a new roof with an extension, heating, electrical system, plumbing, bathrooms, etc. Minimal personal work, just demolition and preparation.
Estimated costs from the architect: around €500,000 (about $550,000).

Option 2:
Cosmetically update the house so we can rent it out. Does anyone know if we would need to replace the oil heating system from 1990 and the oil tanks from 1966? What minimum costs should we expect for this?
Then build a new house on the large plot. Access to the new house past the existing building is not a problem. This has been approved by the local building authority (building permit/planning permission), and we are allowed to build a second house here.

Option 3:
Subdivide the plot, which has also been approved by the relevant building authority. Sell the existing house in its current condition along with a part of the plot. We would retain access to the new building and keep the plot for the new house.

We have an appointment soon with an independent mortgage advisor. We are mainly interested in which option banks are most likely to approve based on your experience. Do banks generally require more collateral and recommend selling the existing house when building new, or do they tend to support rental properties more?

Also, what is the current situation with renovation projects regarding bank financing? The renovation costs more than the property itself. Do banks even finance such projects? Or do they recommend building new instead for the renovation budget?

Thanks for your help!!

I wear glasses and have a problem with invisible photos.

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Flo1990 schrieb:

We are only interested in which option banks are most likely to approve based on your experience.

Flo1990 schrieb:

Do banks even finance something like this?

You should ask the bank that is supposed to provide the financing.
We have no information about the property or your liquidity. Nothing.
Also almost nothing about the property itself and its condition.
You can’t really find anything like this on real estate websites through the search filters, can you?

What exactly do you mean by "huge"? My first thought would be to divide it and sell the house in order to build a new one yourself. Of course, this depends on how the demand would be.

The plot measures 1400 m2 (approximately 0.35 acres).
It can no longer be found online because we are going to buy it 😉
A full renovation, renting out and rebuilding, or selling and rebuilding are all basically possible right now.
My question was whether anyone here has experience with banks. Specifically, what banks generally tend to support or rather reject.

For me, sharing and selling would also be an interesting solution. However, it depends on your budget and income. With a good income and plenty of money, I would, of course, keep the large lot to myself. Renting out a single-family house is almost always a really poor investment.