Building a house financially feasible or a pipe dream?

When selling, the parents of the OP do not retain the lifelong right of residence in the old house, but are granted a new one in the new property. In this respect, this circumstance does not lead to a reduction in value.

Lifelong rights of residence are tied to a property, as they are registered in the land register and additionally regulated by contract. This would need to be resolved and transferred to the new property, e.g., the new building. However, this right then has a depreciating effect there, i.e., the bank will take it into account when determining the value and accordingly be willing to provide less external capital.

Option 3: Rent out the house. In my opinion, the two apartments together should be able to bring in 1,000€ cold rent per month – which exactly corresponds to the current installment payments on the loans. So if you had secure rental income, you could cover the costs of the house with it. I would then have this house again as collateral for the bank to finance a new build, but otherwise no equity anymore.

Whatever you want to do: I would rule out option 3. You would have to build without equity and still have a crutch at your leg. Just wait for a rent default to happen. When the house is paid off, you have to invest again...
My opinion: You are not doing yourselves a favor with this, rather the opposite.

Regards Yvonne

Good morning,

these are all correct points that you are raising.

The architect has indeed only evaluated the property and spoken based on experience. Although the lifelong right of residence is neither recorded in the land register for the old property nor for the potentially new one!?
Under which entry would that appear? I have the land registers in front of me, and I don’t see anything in this regard – at least not in "plain text."

Looking at what prices are sometimes listed in our residential area when properties are sold, and how quickly they still go, 280,000 EUR certainly isn’t exaggerated.

What I’m still missing a bit is simply a basic assessment of the other figures:

1) With our income and 2-3 children plus parents "on the leg" (=> granny flat), is a proper new build even conceivable?
2) How do I arrive at the narrowest possible price range for what a new build will cost me, given the conditions mentioned?

I realize that point 2 is very difficult to answer. I’m also not aiming to narrow it down to 10,000 EUR. But you have already done some rough calculations in other threads, something like price per m², or price per m³ of enclosed space. Prices for garages, prices for outdoor facilities,...

Very naively calculated, I would say we need 160 m² plus 80 m² for the granny flat. Calculating at 2,000 EUR per m², that would be 480,000 EUR plus land, plus incidental building costs, plus everything that might have been forgotten – so not achievable for under 700,000 EUR.
But I think that is far too high. The architect once mentioned as a rule of thumb 400 EUR per m³ of enclosed space for us. Again very naively: 300 m² * 3 m * 400 EUR = 360,000 EUR. That is a difference of 120,000 EUR compared to the m² price.

What is your calculation on this?

Regarding the point of renting or selling: with selling, we also have the problem that we would have to sell first and only then could take care of the land, planning, and of course implementation. And which buyer wants to wait ~1 year before they can use "their" property?

Why is that way exaggerated? We are building 132m2 with a basement and the house construction costs will amount to 350k€. Calculated according to enclosed volume (874 m3) 400€ per m3 and the basement is not a living basement. I mean you want to build 240m2. That is already intense. That is at least 3 floors without a basement. So the 700k€ are more than realistic.

So 700,000€ for a new building with a granny flat - if that is realistic, I wonder who can afford something like that.

Are 150m² + 80m² of living space really that excessive?

Guess why I'm only building 132m2 of living space? I end up with everything but without the kitchen, moving, and small stuff like lamps, planting, etc., at 520k€. After 5 years, when everything really everything is finished, I will have spent 600k€, and that's basically net without interest.