Demolition and reconstruction or renovation?

Hi,
I am new here and only recently discovered the forum. Great posts!

About my problem:

We were able to buy a plot of land 2 years ago and have now built our dream house (including a granny flat) on it.
To the south of our plot, there is a long (21m wide) plot with 1580m² and an old house from 1952, which stands at the southernmost position of the plot, so there is about 50m of space between our plot and the old house, perfect.
We were also able to buy the plot with the existing house because the owner passed away. The idea was: no one should block our view to the south. With a bit of imagination, the plot could also be divided into 3 plots and then we would have a direct neighbor instead of a free view. So: lucky, bought the plot.

But what now?

The house has hardly been renovated in the last 70 years, clearly, double-glazed windows (wood, about 40 years old) and a gas heating system (>30 years) and the bathroom (which you have to go through the kitchen to get to - let’s not talk about that...).

Our approaches:

1. Rent out as is:
Pro: The loan could be serviced 1:1
Contra: Reserves for repairs cannot be saved

2. Rent out after renovating:
Pro: The loan could not be serviced 1:1
Contra: Low rent for the loan burden, therefore no gain

3. Divide the plot and sell about 1/3 with the old house again
Pro: No more burden
Contra: Gone is gone

4. Build a multi-family house (offers are available)
Pro: Value will be created
Contra: We are too old (around 50) to be able to reap the returns

5. Tear down the house and let the plot rest
Pro: No work except garden maintenance
Contra: Low interest rates for a new build/renovation not utilized

Maybe I have missed a possibility or you could write me your opinion on the points listed?

Thanks and best regards,
Heiko

3 and 4 actually correspond to the opposite of what you want. You want peace in the garden and no neighbors.
With 4 you are building a block yourself
with 3 you no longer have control.

Do you really want to rent out for 1 and 2?

I would find 5 optimal, if it is financially feasible. It is primarily about your living comfort.

Depending on the region and location of the building, one must rebuild within a certain period after demolition or lose the building rights or have to comply with a new development plan. Keyword building obligation. I would consult a specialized lawyer to find out what consequences a vacancy or demolition could have.

3 and 4 actually correspond to the opposite of what you want. You want peace in the garden and no neighbors. With 4 you are building a block yourselves, with 3 you no longer have it under control. For 1 and 2 do you really want to go into renting? I would find 5 optimal if it is financially feasible. It's primarily about your living comfort.

Renting would be optimal if the property offers us an option to downsize in old age, we currently live in 190m², including 3 children's rooms, the youngest child is already 14... So yes, renting, but not at any price, it actually has to pay for itself, which seems difficult to impossible with current building costs... regarding 5: You are of course right, but unfortunately we then have the monthly burden and afterwards over 2500m² of garden – maybe a bit exaggerated :)

Depending on the region and location of the building, you must rebuild within a certain period after demolition, or you forfeit the building rights or must adapt to a new development plan. Keyword: building obligation. I would consult a specialist lawyer to find out what consequences a vacancy or demolition could have.

Good point, I will check that! To my knowledge, there is no development plan, it's all old stock anyway.

Maybe divide the property into thirds, keep the third by your fence and sell the other two. You have thereby bought distance, and a grandchild property, and make 2 other families happy. Assume that at least one of you will live to be 96 years old, and then you don't want to reap profits, but enjoy life healthily and carefree. And the number on paper at a bank doesn't matter to you, as long as the trend is positive.