ᐅ Optimal Living Space for a Semi-Detached House in Freiburg

kaho674 schrieb:

What does the development plan say about the number of floors? How large is the building plot?

Two floors and a maximum of two residential units are permitted; the plot size is 580 sqm (6,243 sq ft).

ingho schrieb:

Two floors and a maximum of 2 residential units are permitted. The plot is 580sqm (approximately 6239 sq ft).

I didn’t mean the plot size, but the building area—that is, where the house is allowed to be located on the plot.
Gable roof? If yes, what angle?

ingho schrieb:

Great. What about the demographic information of the municipality? It is especially a spa town with many elderly couples but also young families and commuters to Freiburg (15 minutes by train)

And what are these target groups looking for?
There are couples who prefer apartments without a garden.
Seniors generally look for a 2-room apartment, while young families typically seek a classic 4-room house.
You need to ask yourself which target group you want to appeal to. Families tend to use a house more extensively than two people. However, they can also be more appreciative and are more likely to use living space with a garden than couples.
This should be reflected in the layout.
That said, I believe couples can also use the classic semi-detached house well and have similar needs on the ground floor as a family of four.

Actually, since you plan to build as an investment property, you should consider the return on investment in relation to the average tenant profile. Your profitability for the property is already very poor, without taking potential value appreciation into account (bearing in mind that houses tend to wear out over time and, unlike with condominiums, you are responsible for all major repairs).

With an investment of €500,000 for 130 m² (1,400 sq ft), your gross return is below three percent (before operating costs and taxes).

kaho674 schrieb:

I didn’t mean the plot size, but the building area. So where the house is allowed to be located on the plot.
Gable roof?

The building envelope is 232 sqm (2,496 sq ft), roof style flat or gable roof 0-45 degrees possible.

nordanney schrieb:

Actually, since you want to build as an investment, you should consider it from a return perspective combined with the average tenant profile.

Gladly, I have already built there once and would build with a local general contractor. The fixed turnkey price is 500,000 for a total of currently 220 sqm (2,368 sq ft) including 2 garages and 2 parking spaces. At least for the initial rental, I could certainly achieve 11/sqm plus 50 for garage and parking space. There is a special feature: I was able to convert my meadow into building land through a change of use, so apart from the infrastructure connection, I have no costs for the land. Selling the plot would only be possible tax-wise after 10 years at the earliest. This is how my calculation currently looks for two semi-detached houses and 220 sqm (2,368 sq ft) living space. PS, these are not true semi-detached houses: a subdivision is not possible. Essentially, two condominiums are created that could be sold separately one day. However, there is only one entrance. How do you assess the numbers? I would finance over 15 years at 1.67% interest.

30,240 annual rent
- 1,662 maintenance (3/sqm as new build plus 40/apartment for property management)
28,620 rent after costs
- 7,776 interest
20,843 operating result
- 10,000 depreciation (2% building value = construction cost)
10,843 result before taxes
- 4,804 taxes
6,038 result after taxes
- 9,472 principal repayment
- 3,433 result after depreciation, taxes, and principal
+ 10,000 depreciation (I add depreciation back, as it doesn’t affect my liquidity)

= 6,567 free cash flow

If rental income drops by 30%, I still end up with a positive cash flow of 1,500.

If there is no increase in value for 10 years and I sell at today’s average price of 3,250/sqm (302 sq ft), I could realize a tax-free 715,000 - 367,000 remaining debt = 348,000 capital gain plus 70,000 cash flow from 10 years of rent, which I could of course also use to pay down the loan.

Of course, prices could be significantly lower in 10 years. Statistically, though, prices in good locations in Baden-Württemberg have not declined since the early 1970s.

The question is whether 110 sqm (1,184 sq ft) per unit isn’t too small. The low price is partly due to the architect using an existing design out of the drawer...

@ingho: That sounds like a plan. Unfortunately, many don’t have one...

I would simply calculate from the opposite perspective. What can small families afford to pay in rent? With 110 m² (living area, possibly larger if including gross floor area due to the attic?), you’re looking at €1,210 plus garage and additional costs. So that’s almost €1,500 fully inclusive rent. I think that’s reasonable if the layout is good.
If the house is larger, the rent will increase as well – over €200 more for 130 m². Not everyone can or wants to afford that, considering they could build themselves then.

So, I would keep the living area as it is, maybe increase to 115 m². When renting out, you can add a bit by counting the terrace. You can include at least 50% of it as living area for rental purposes.