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?
Winniefred4 Aug 2020 12:5630 minutes: that was me. But 30 minutes including the 5+5 minutes walking and 15-20 minutes tram ride. I can also get there by commuter train in 8 minutes. Or cycle for 20 minutes. And I’m talking about the city center. Most things are less than 10 minutes away on foot (walking time!). Not 30 minutes by car or first cycling or driving to the station. For me, that makes a big difference.
But it simply wasn’t possible not to keep going back and forth. Because this was a plumbing project and unplanned problems kept coming up, requiring parts that you can only get at a large DIY store or a specialist supplier.
And I don’t want thawed bread rolls, I want fresh ones!
I have already lived in two small towns and our holiday property (we are not owners, it belongs to the family) is located out in the Mecklenburg countryside. I have lived here my entire life. I can definitely make well-founded long-term comparisons and would always choose what we have, which is the edge of a major city.
But it simply wasn’t possible not to keep going back and forth. Because this was a plumbing project and unplanned problems kept coming up, requiring parts that you can only get at a large DIY store or a specialist supplier.
And I don’t want thawed bread rolls, I want fresh ones!
I have already lived in two small towns and our holiday property (we are not owners, it belongs to the family) is located out in the Mecklenburg countryside. I have lived here my entire life. I can definitely make well-founded long-term comparisons and would always choose what we have, which is the edge of a major city.
P
pagoni20204 Aug 2020 13:17Winniefred schrieb:
mecklenburgischen Pampa.......is, of course, something completely different from a small town or village in Baden-Württemberg/Bavaria, etc. Living in the center of Berlin is just as incomparable to living in the center of Freiburg; therefore, it always depends on the specific details and whether the three sons would rather join a rodeo club or the three little girls want to become ballerinas.
It always comes down to individual needs and preferences, so all of this is just as incorrect as it is correct, and for every standpoint, there are fitting extreme examples that make it seem impossible.
Winniefred4 Aug 2020 13:32pagoni2020 schrieb:
.......is, of course, something completely different from a small town or village in Baden-Württemberg/Bavaria, etc.
Living in the center of Berlin is just as incomparable to living in the center of Freiburg; therefore, it always depends on the specific details and whether the three sons prefer to join a rodeo club or the three little girls want to become ballerinas.
It always comes down to individual needs and wishes; thus, all of this is as much wrong as it is right, and for every viewpoint, there are extreme examples that may make it seem impossible. I didn’t say anything different in my first post. The second post just elaborated further.
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