ᐅ Renovating a Listed Pavilion Located in an Outdoor Area

Hello!

For almost two years now, I have been considering having a small pavilion in our garden converted internally and rented out as an apartment to a student or similar, in order to partially cover the maintenance costs of the property. The biggest question for me is how to carry out such a project in a financially viable way. I have already spoken with two architects who have very different estimates for the total cost (70,000 and 120,000). I also spoke with a small construction company that could handle the entire interior conversion (cost estimate around 50,000, but excluding architectural services).

The dilemma I’m facing is that I need an architect for the change of use application (the pavilion is currently not registered as living space but as a garden shed; the garden area is also classified as open land) as well as for the preliminary building inquiry (the pavilion’s exterior is protected as a historic monument, but a window is to be installed). The architect would of course oversee the entire construction, which would increase the costs. On the other hand, the renovation work could also be carried out independently by the construction company mentioned (likely at a significantly lower price). One of the architects said that due to the relatively minor modifications, hiring an architect might hardly be worthwhile.

To give a clearer picture, here are some key facts about the pavilion and the planned work.

Key data:

- Floor area 18m² (194 sq ft), the attic is also to be converted (about another 12m² (129 sq ft) of space)
- Connected to electricity, gas, water supply and drainage
- Exterior protected as a historic monument
- Located in an open land area
- Immediately adjacent to the road or property boundary
- Parking space installation possible

Planned work:

- Installation of bathroom and kitchenette
- Conversion of the attic as a second living level (for a bed)
- Installation of an additional window
- Installation of a heating system (gas boiler)
- Insulation (planned exemption from energy saving regulations due to disproportionately high costs)

My question is, which option would be the most cost-effective? For example, does it make sense to hire an architect only to handle all the formalities, and then, once the building permit / planning permission is approved, switch to a construction company and leave the architect out?

I look forward to any input!

Best regards, Tom

If I were you, I wouldn’t ask which path is the right one, but rather whether you should take that path at all.

Since you want to renovate a listed building, in my opinion, you can’t avoid involving an architect.

Let’s assume total investment costs of €75,000 (about $75,000). What kind of rent can you get for the 30 sqm (about 320 sq ft) pavilion in a remote area outside the main settlement (which is a terrible location, at least for students)? Let’s say €300 (about $300) monthly net rent, which totals around €3,600 (about $3,600) per year. After deducting some non-recoverable expenses and roughly €1,500 (about $1,500) in taxes, you might be left with about €2,000 (about $2,000). That equals a return of 2.6%, while you always have a tenant in your garden and are responsible for maintaining the unit.

Is that really worth it?

P.S. I assumed you are paying everything with your own equity. If you need a loan, the return will probably drop significantly (if you even get financing – the bank will consider the entire property, not just the pavilion).

That was exactly my thought as well. The renovation will never pay for itself. There are more sensible investment alternatives for that money, even within the real estate sector.

Student accommodation = a garden full of fellow students who grill every evening and after a few years they move out (finished their studies), and it definitely needs renovation every single time.

Hello Nordanney,

Thank you very much for your response and the valid concerns! Since our plot is located in one of the most sought-after parts of the city, on the edge of a forest, and also very central (1.5m (0.9 miles) from the city center), I (and the local architects) expect a rent of 500-600 euros. The return would likely be almost twice as high...

You’re assuming €20 per square meter, which may actually be achievable in Heidelberg, but not for a 30 square meter (320 square feet) shed. That size is very small and mostly suitable for students, who in turn wouldn’t pay €20 per square meter, even in Heidelberg.

It’s clear that the architect is only approved here because he wants to build and make money himself, and he doesn’t care what you do with it afterwards.

It’s unbelievable what bitter consequences the current housing shortage in Germany is causing.

On another occasion, it seemed to me that the name Heidelberg must be derived from paganism, as the local price expectations are, in my opinion, outrageous. It’s almost cheaper to move to Munich.

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