ᐅ New Construction or Buying and Renovating a House in Bavaria

Hello everyone,

I have been a mostly silent reader in this forum for several years. About four years ago, my husband and I moved from the city to the Bavarian countryside, and for the past three years, we have been searching for a suitable property. Unfortunately, we never really found the right one—sometimes we were a day too late, other times the desired property was sold to a neighbor, and so on.

We are a family of four, with two children aged 2 1/2 and 5 years. I work full-time, while my husband is a stay-at-home dad. We have good savings and an additional net income of about 4,500 euros (including child and family allowances but excluding potential bonuses).

Here is the situation: My grandmother owns a plot of land in our town, about 1,200 m² (of which approximately 300 m² is a private road, so around 900 m² could be built on). About a year ago, she offered to transfer this land to us free of charge (to give some context, the standard land value in the new development area is about 135 euros per m²). After talking with my grandmother, I discussed this with the potential heirs—my father and three uncles—and initially, none of them seemed to have any objections. However, at least one uncle appears to have some underlying concerns, as he began discussing my grandmother’s possible will with her (there is none), which she did not appreciate at all.

The plot is located in the center of town and is not subject to a specific development plan but is designated as a mixed-use area in the land-use plan. The neighboring properties mostly consist of pitched-roof houses, ranging from single-family homes to multi-family buildings. In 2003, there was an approved building permit process for a house with a granny flat initiated by one of my uncles, but he eventually decided against building. The floor plans are no longer really up to date (pellet heating with a large tank in the basement, etc.); my uncle showed them to me. To make a long story short, my husband and I decided at that time, after the whole drama (and because I am quite picky and would prefer a south- or west-facing slope), to continue looking for renovation projects instead.

Currently, in our region, only run-down properties are available for at least 250,000 euros, while reasonably decent houses, mostly from the 1980s, cost around 450,000 euros. There have also been new semi-detached houses in the neighboring town priced at 430,000 euros, but these are too small for us (lack of a home office), and the neighboring town is remote with no shops within walking distance.

My father-in-law currently lives in the apartment next to us. If we can afford it, we would like to include him in a granny flat or separate apartment. Most of the older existing properties have very large living spaces of 220-300 m², so it seemed logical and sensible to us to somehow integrate him into the planning. We would of course try to do the same in a new build.

The big question now is whether we should continue looking for a renovation project or seize the opportunity to build on my grandmother’s land? We envision a house with about 160 m² of living space, a 40 m² (430 sq ft) granny flat, and a double carport—all within a budget of about 500,000 euros plus a 10% buffer. According to the rule of thumb of 3,000 euros per m², this seems very tight. :-(

My husband usually has some free time in the mornings, but in my opinion, he lacks significant practical skills, so I would try to subcontract all trades.

I have already compiled a list of construction companies within a radius of about 50 kilometers (30 miles). The issue that concerns me currently is the financial stability or liquidity of these companies: They are usually limited liability companies—how should one assess this as a potential future builder? Would it be better to avoid smaller firms and choose a larger one?

Thank you very much for reading!