Hello,
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.
Alex85 schrieb:
What do you think is the lowest price you can get so that at €16.50 per square meter (about $17.50 per square yard) there’s still a cent left in the village budget?
There’s nothing left at all—in fact, the administrative costs make it a loss. You only do it so someone will move into the village, no matter the cost. Huh, why should I care about the village budget?
Here you can clearly see your mistake in thinking. It’s not just about where you buy, but also about when and especially from whom.
It doesn’t matter at all. Whether it’s a new residential development by the municipality or privately owned: for €16.50 (about $18), you don’t even get utility connections included. The land itself is basically worthless, meaning the seller is practically paying to get rid of it. And this obviously affects the value of the house built on such a plot.
B
Bau-Schmidt22 Oct 2017 09:36Alex85 schrieb:
From several new development areas in the region.
The "cheapest" is about 25.XX€ per square meter (per square foot). You are projecting your own experience onto others....Bau-Schmidt schrieb:
You are projecting your own views onto others....Huh?
I’m sharing insights from this region. This has nothing to do with "me" or "others."
If you have different knowledge, please share it. Contribute something for a change.
B
Bau-Schmidt22 Oct 2017 09:53Alex85 schrieb:
It doesn’t matter at all. Whether it’s a new development area owned by the municipality or private property: For €16.50 (about $18) you don’t even get the land development costs covered. So the land itself is basically worthless, or the seller is essentially paying to sell it. And that obviously affects the value of the house built on such a plot. In our area, single-sided housing development is common. The municipality doesn’t need to invest anything further. This approach also closes gaps in the village’s housing. In smaller communities, it helps prevent depopulation. The municipalities here act against > rural exodus. Alex85 schrieb:
Huh?
I share the experience from this region. This has nothing to do with “me” or “others.”
If you have different information, please share it. For a change, contribute something. Gladly. In new development areas, prices are naturally higher.I
Interpolis22 Oct 2017 10:05Thank you in advance for all the responses, which have given me a lot of input. To be honest, I don’t have any issues with the price per square meter itself. Especially when I see that the city offers plots for 150 to 170 euros per square meter. A previous poster mentioned earlier that the current market situation is aimed at many prospective builders who have little or no equity and are looking for small plots to be able to build somehow. The real estate agent confirmed this to me, and the city is also prepared for it.
As for work, I am not a federal civil servant but a state civil servant. Even a transfer to Kassel for career reasons would be unlikely, and even if it happened, the state would provide separation allowance so I could afford a small apartment during the week. The notary appointment is scheduled for next week, and as such an important event approaches, you tend to reconsider everything once more.
As for work, I am not a federal civil servant but a state civil servant. Even a transfer to Kassel for career reasons would be unlikely, and even if it happened, the state would provide separation allowance so I could afford a small apartment during the week. The notary appointment is scheduled for next week, and as such an important event approaches, you tend to reconsider everything once more.