House construction with multiplier > 30?

& : we live in a 3-room apartment with kitchen and bathroom. We don't want to sell the house for now, but financially, as mentioned, it would be a calculated loss. At the latest when inheriting or similar.

I don't want to wish it on you, but so many factors play a role. My parents bought an xxxxl house in a village at an old age because there is no condo. Father is sick, mother can't keep up. We children have no time to do their gardening. Everyone commutes daily. Now they are hiring a gardener.

So I just did some calculations... the factor would be about 30 for us... but why should I care about that? I don't understand. First of all, you don't know how rents will develop and secondly, I actually plan to live in the house anyway, unless it no longer works for age reasons... and then I don't care if, upon selling (provided no child wants to live in it), I theoretically make a profit compared to the rent I would have otherwise paid... because after all, I had the pleasure of being able to use my own house with a garden in a nice location with my family. When deciding whether to build, we rather looked at what existing properties cost and what would still need to be invested and then came to the conclusion that in the end you would pay almost the same as for a new build, only that it would remain an old house and you would have to live with more compromises. Hence the decision to build. And regarding the fact that no one mentions that in the construction financing... well... first and foremost, WE wanted a loan. It's not as if the bank came and asked if we would be interested in owning a house, since they wanted to sell us a loan. We had clear ideas about the amount, the fixed interest period, and the maximum rate and then looked at who could offer us the best within that framework.

And owner-occupied properties always have about 25% higher market value than rental properties.

And owner-occupied properties always have about 25% higher market value than rental properties.

Why?

That's how it is. Demand. Compare it. Four-party building, rented with four condominium units, unrented in a similar location. Or row house rented with one unrented.

The factor expresses the fictitious gross yield of the property. 1 / purchase price factor = yield. At 20, thus 5%, at 25, 4%, and at 40, 2.5%. Before costs, etc.

For owner-occupied properties, I would rather see it as a kind of indicator. I would consider a high purchase price factor in rural areas more problematic regarding the resale value than in the city. That does not have to be the case – see current market developments – but I see the risk as higher.

Like most here, I see the own property as a lifestyle decision, luxury, and consumer good. The additional quality of life cannot be measured with money.

As a second argument, however, it is often said, "it's also for old age," and at the latest then, the purchase price factor becomes relevant again. Otherwise, the fate you described threatens you: "for the price, I can almost build new."

In conclusion, a purchase / new construction is not value-neutral. The loss is not 120k but the transaction costs (purchase incidental costs), which are immediately lost.