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Interpolis21 Oct 2017 09:30Hello,
I have a fundamental question about purchasing land that is not focused on the financial aspect but rather on the general principle:
The situation is as follows:
My wife and I have wanted to move back to our hometown (about 15,000 inhabitants), located 40 kilometers (25 miles) east of Frankfurt, for some time now. We started looking for a plot this summer and did not expect to find one so quickly. We are now close to buying what we consider a dream plot, exactly as we had always imagined. The plot is almost square, located in a (significantly) upscale, well-established residential area, at the edge of a forest, flat terrain, with a view into the valley. From what I can see in the city’s cadastral plans, it is one of the last plots of its kind. All other available plots in the established neighborhoods have significant drawbacks in terms of location or shape, in our opinion. The areas designated by the city as building land / planning permission zones have plots sized between 450 and 550 square meters (about 4,800 to 5,900 square feet). These are too small for us, and we do not want to move into a new development where there will be construction noise for the next ten years.
The price per square meter of our plot is 200 euros. The city’s plots are priced between 150 and 170 euros per square meter. My wife and I are aware that a plot of this type and quality in our hometown might not be available again anytime soon, or possibly never. The real estate agent told us, however, that the plot has been on the market for six years. He had many viewings, and all interested parties admired the property, but according to the agent, the price for this area is considered “luxury level,” especially since the city offers much cheaper alternatives.
Here is our problem: We want the plot. But we cannot say with 100% certainty whether we will build on it ourselves. I would estimate the probability at 80 to 90 percent. The reason is that I currently work as a civil servant in the state capital, which is 90 kilometers (56 miles) away from the plot, but a transfer to a nearby office is possible. However, my employer has selected me for career advancement opportunities. I am currently seconded to a ministry and will be there for at least another one and a half years, if all goes well. Every additional day there improves my career prospects. Career advancement, however, in a large federal state also means geographical flexibility. So, I cannot say for sure where I might be assigned. On the other hand, I could also decide against pursuing a career and move to a local office near the plot at any time. It would also be possible to balance career and building on the plot, as there are enough promotion opportunities in the surrounding area.
Given these circumstances, would you buy the plot? We can cover the purchase price (about 180,000 euros in total including all additional costs) from our own capital. My concern is the possibility that we might suddenly be relocated elsewhere for work. This worries me because the agent said he couldn’t sell the plot for six years due to the price. Therefore, I wonder whether we would be able to sell the plot without a loss and whether there is any chance of making even a small profit. I have two siblings who both live in our hometown and intend to stay. Both will likely need to buy plots within the next five years. It might be possible to sell it to one of them. I also have some hope because of the proximity to Frankfurt (the connection is very good, with train station and highway). In a nearby town (about 10 kilometers / 6 miles closer to Frankfurt), comparable plots already cost more than 200,000 euros. If Brexit goes through, prices will probably rise further.
In short: I am thinking about whether this plot should be seen as an opportunity for returning home or as a burden considering our (professional) future.
I would appreciate any input.
I have a fundamental question about purchasing land that is not focused on the financial aspect but rather on the general principle:
The situation is as follows:
My wife and I have wanted to move back to our hometown (about 15,000 inhabitants), located 40 kilometers (25 miles) east of Frankfurt, for some time now. We started looking for a plot this summer and did not expect to find one so quickly. We are now close to buying what we consider a dream plot, exactly as we had always imagined. The plot is almost square, located in a (significantly) upscale, well-established residential area, at the edge of a forest, flat terrain, with a view into the valley. From what I can see in the city’s cadastral plans, it is one of the last plots of its kind. All other available plots in the established neighborhoods have significant drawbacks in terms of location or shape, in our opinion. The areas designated by the city as building land / planning permission zones have plots sized between 450 and 550 square meters (about 4,800 to 5,900 square feet). These are too small for us, and we do not want to move into a new development where there will be construction noise for the next ten years.
The price per square meter of our plot is 200 euros. The city’s plots are priced between 150 and 170 euros per square meter. My wife and I are aware that a plot of this type and quality in our hometown might not be available again anytime soon, or possibly never. The real estate agent told us, however, that the plot has been on the market for six years. He had many viewings, and all interested parties admired the property, but according to the agent, the price for this area is considered “luxury level,” especially since the city offers much cheaper alternatives.
Here is our problem: We want the plot. But we cannot say with 100% certainty whether we will build on it ourselves. I would estimate the probability at 80 to 90 percent. The reason is that I currently work as a civil servant in the state capital, which is 90 kilometers (56 miles) away from the plot, but a transfer to a nearby office is possible. However, my employer has selected me for career advancement opportunities. I am currently seconded to a ministry and will be there for at least another one and a half years, if all goes well. Every additional day there improves my career prospects. Career advancement, however, in a large federal state also means geographical flexibility. So, I cannot say for sure where I might be assigned. On the other hand, I could also decide against pursuing a career and move to a local office near the plot at any time. It would also be possible to balance career and building on the plot, as there are enough promotion opportunities in the surrounding area.
Given these circumstances, would you buy the plot? We can cover the purchase price (about 180,000 euros in total including all additional costs) from our own capital. My concern is the possibility that we might suddenly be relocated elsewhere for work. This worries me because the agent said he couldn’t sell the plot for six years due to the price. Therefore, I wonder whether we would be able to sell the plot without a loss and whether there is any chance of making even a small profit. I have two siblings who both live in our hometown and intend to stay. Both will likely need to buy plots within the next five years. It might be possible to sell it to one of them. I also have some hope because of the proximity to Frankfurt (the connection is very good, with train station and highway). In a nearby town (about 10 kilometers / 6 miles closer to Frankfurt), comparable plots already cost more than 200,000 euros. If Brexit goes through, prices will probably rise further.
In short: I am thinking about whether this plot should be seen as an opportunity for returning home or as a burden considering our (professional) future.
I would appreciate any input.
You’ve understood it correctly. It is both an opportunity and a burden at the same time, not one or the other.
I feel the same way. Committing to our house makes me a bit uneasy, especially since I approached my twenties very opportunistically, including moving across the country on short notice, long-distance relationships, and so on. Looking back, it was definitely the right choice.
Recently, there was a job posting in our old hometown that I found interesting. It could have meant a step forward in my career and was also quite rare. At the same time, we have a great plot of land reserved for us here, and the job and finances actually fit well... so I didn’t apply and was relieved when the posting was finally taken down [emoji6]
It’s a strange feeling. But money and career are things that never feel fully satisfying. There’s always room for more. However, if that’s the priority, then being single or a maximum DINK (double income, no kids) is the way to go.
I feel the same way. Committing to our house makes me a bit uneasy, especially since I approached my twenties very opportunistically, including moving across the country on short notice, long-distance relationships, and so on. Looking back, it was definitely the right choice.
Recently, there was a job posting in our old hometown that I found interesting. It could have meant a step forward in my career and was also quite rare. At the same time, we have a great plot of land reserved for us here, and the job and finances actually fit well... so I didn’t apply and was relieved when the posting was finally taken down [emoji6]
It’s a strange feeling. But money and career are things that never feel fully satisfying. There’s always room for more. However, if that’s the priority, then being single or a maximum DINK (double income, no kids) is the way to go.
I
Interpolis21 Oct 2017 10:20kbt09 schrieb:
If a property has been listed with the real estate agent for six years, there might be a reason beyond the price. Have you checked the zoning plan for the lot? Are there possibly any significant restrictions?I have the zoning plan and land registry extract—all without restrictions. The reason for the six years is probably that the seller is enjoying retirement in Spain, is not dependent on the money, and, frankly, might be somewhat difficult on a personal level. Contact between him and the agent was also lost for a long time because the agent eventually became frustrated. For example, if an offer was just 5,000 euros below the seller’s expectation, he rejected it.
K
Knallkörper21 Oct 2017 10:37The price does not seem unreasonably high to me. Even here in southern Lower Saxony, we have already paid 190 per square meter (20 per square foot) in a suburb (village). Based on your description, it sounds like you would be taking very little financial risk by purchasing the plot, whether you build on it in the medium term or not.