ᐅ Energy-efficient renovation does not pay off! What can be done?
Created on: 23 Aug 2024 11:27
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PATPATPAT
Hi friends. We are considering buying my in-laws’ timber frame house. The house was built in 1979 and, apart from the roof (14cm (5.5 inches) above-rafter insulation), it is not insulated. The wooden windows are also from 1979. Of course, the windows are old, but overall everything is still in very good condition. The energy costs (electricity + gas) for the 130 m2 (1,400 sq ft) house are 2,600 euros. Compared to insulated houses, this is quite high. Therefore, we have been thinking about an energy retrofit. However, the quote for new windows alone is 60,000 euros. In addition, there would be basement insulation and possibly interior insulation for the roof. We have ruled out exterior wall insulation. Altogether, this would probably total around 80,000 euros (including own labor).
These renovations would certainly reduce the energy costs. But even if I save half of the costs going forward (which is probably optimistic), over 40 years (I will be 85 years old then, I don’t expect to live longer), that amounts to 52,000 euros. So it is far from a cost-effective renovation... and theoretically I would need to replace the windows again after 40 years.
Honestly, I am thinking it might be better to do nothing (apart from aesthetic renovations) and live for the next years in a renovated house (but with a lower purchase price, about 280,000 euros) and bear the “higher” energy costs — especially considering rising CO2 costs, etc. Even if I assume the gas price doubles and receive a subsidy for one of the above renovations, it still wouldn’t be worthwhile. The resale value is also not decisive because the house is in a rural area — so rather a lower-demand location.
What do you think? Am I missing something? Is anyone else in this situation? What would you do?
These renovations would certainly reduce the energy costs. But even if I save half of the costs going forward (which is probably optimistic), over 40 years (I will be 85 years old then, I don’t expect to live longer), that amounts to 52,000 euros. So it is far from a cost-effective renovation... and theoretically I would need to replace the windows again after 40 years.
Honestly, I am thinking it might be better to do nothing (apart from aesthetic renovations) and live for the next years in a renovated house (but with a lower purchase price, about 280,000 euros) and bear the “higher” energy costs — especially considering rising CO2 costs, etc. Even if I assume the gas price doubles and receive a subsidy for one of the above renovations, it still wouldn’t be worthwhile. The resale value is also not decisive because the house is in a rural area — so rather a lower-demand location.
What do you think? Am I missing something? Is anyone else in this situation? What would you do?
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nordanney23 Aug 2024 15:43jrth2151 schrieb:
To me, it seems like the money simply isn’t available and you’re looking for reasons not to do it, but then just communicate that. I’m sure some good ideas about funding, etc., would come up here. For example, insulating the basement ceiling with 12cm PUR foam boards in DIY – it goes very fast and costs only a small low four-figure amount in euros. Attachment can be done using PU adhesive foam. This way, you can have a basement ceiling insulated to new-build standards (in NRW there are two great second-choice suppliers with prices so good that it’s worth accepting moderate delivery fees and forgoing subsidies by doing the work yourself – insulating 50m² (540 sq ft) of basement ceiling then costs under 1,000€).
It pays off in just a few years.
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PATPATPAT23 Aug 2024 16:04No, I was only referring to payback and economic viability. Unfortunately, the house seems to be so unique (especially regarding the windows) that an energy-efficient renovation would be very expensive. With an expected remaining living time of about 40 years at most (I would be 84 then), the costs (despite rising gas prices and CO2 charges) and even with subsidies would never be financially justifiable. As I said before: even if I managed to save 2000 euros out of the 2600 euros in annual energy costs (and that is a very optimistic estimate), that would only save 80,000 euros over 40 years (with renovation costs around 130,000 euros or more). This high savings estimate already accounts for future rising gas prices in principle. Leaving aside all the comfort and resale value arguments—one is subjective, and the other is speculative—from a purely financial perspective, it doesn’t add up. Someone wrote that it would be more sensible to rent a well-insulated apartment instead. And that is exactly the point. The decision is whether to go for a less cost-effective option because I really want to live in this house, or to look for another house with better baseline qualities, or to simply take the house as is and live in it without doing anything. However, as was also mentioned, the problem could be that after another 20 years, everything might have to be replaced anyway because the gas heating system will be completely worn out at that point and the windows will be fully deteriorated. That is what I wanted to emphasize. Who can say that these windows and the house won’t last another 30 to 40 years? Honestly, without all the political debates and subsidies, very few would have considered any of these renovation measures. Why do you think so many houses from the Baby Boomer generation remain mostly unrenovated up to today? And they still sell at reasonable prices—renovated or not. I’ve been searching for a house for two years now, and I can’t confirm what the newspapers say—that unrenovated houses remain unsold or only sell with huge discounts. That only happens because prices were generally too high already, stemming from the period of zero interest rates.
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nordanney23 Aug 2024 16:09PATPATPAT schrieb:
From a purely economic perspective, it doesn’t make sense. Someone wrote that it would be more reasonable to rent an energy-efficient apartment... and that’s exactly what this is about. Yep. I stand by that statement. Get rid of the old house while you still can and move into a new apartment.
PATPATPAT schrieb:
I have been looking for a house for two years and I can’t confirm (what the newspapers say) that unrenovated houses remain unsold or only sell at very high discounts... But that is indeed the case. I see it every day.
And just to add: For a professional investor, even new buildings built to the KfW 55 standard are no longer marketable today. Large investors simply don’t buy those anymore because of future prospects. Perhaps that’s a final word from the real estate sector.
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Schorsch_baut23 Aug 2024 17:10I’m not sure how things will look after the next election. Maybe then a requirement for oil heating will be introduced.
schubert7923 Aug 2024 19:14You continue to ignore the substantial subsidy, which is certainly in the five-digit range! I don’t feel like checking exactly. Apparently, you don’t either. So, all good. Just buy and move in!
PATPATPAT schrieb:
No, I just wanted to . . . Then I don’t understand why you ask one or more questions here, see
PATPATPAT schrieb:
What do you think? Am I misunderstanding something? Is anyone else in this situation? What would you do? if everything is non-negotiable for you.
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