Is renovating old buildings worthwhile?

Hello everyone,

we have bought a house in need of renovation from 1909 in the Stuttgart metropolitan area because we liked the location and the plot. The plan was to completely renovate it. Now we are quite torn whether a new build makes more sense. Of course, I don't expect this forum to make this decision for us :) I just hope to get a few inputs, as both options currently weigh 50/50.

In summary: The house can be renovated well, all the experts who have been inside gave positive feedback. It is estimated at around €250k. The question is more of an economic nature: Does it actually make sense to invest so much money into an old house? The plot and development plan allow for a house about twice as large. Therefore, the other consideration is: tear down, build bigger, rent out 1-2 units. The project is also cleared with the bank. But the potential risks of new construction and renting make us a bit uneasy.

I don't want to bombard you with a bunch of details. I have summarized everything in a pro-con list. Looking forward to inputs or your gut feelings.

I would like to doubt that a 165m2 house from 1909 has worse substance than a new building. 165m2 is also very large. For that, you have a house that has surely stood safely and well for over 100 years. Give the lady new shine; if done well, she will thank you for it. Now I don’t know what you want to make out of it, what your goal is, but the budget is really generously set. With that budget, good insulation, etc. must surely be included, there aren’t many more costs then and nothing is more prone to repairs. Such a house is also a form of retirement provision.

Renting out, etc., yes, but you first have to put money into it, will never have peace, and with a bit of bad luck, even deal with tenants from hell or who knows what kind of trouble. I wouldn’t want to specifically put myself through that.

For me, the question wouldn’t even arise.

Would you have 300 sqm of living space in the new building yourselves? Otherwise, it's comparing apples and oranges, in my opinion. Does the new building have to be tied to rental?

Just a few questions as a help:

Does the old house have anything worth preserving? Beautiful features that you would keep, because that’s why you fell in love with the house? Was the house ever something special or just a functionally built structure that maybe has now been completely renovated to death?

Do you really want to rent it out? You have a single-family house also for the independence from others. Tenants would annoy me terribly here.

Is the garden worth preserving?

I think the pro and con list is nonsense. You have to decide for yourself whether you want to play landlord or not. Whether it pays off as an investment... I dare to doubt it. I would rather want to live in my house without tenants.

About the costs: Renovating 165m² for €250,000 is still cheaper than building a new house for 165m² * €2000/m² plus incidental building costs plus demolition.

Macht es tatsächlich Sinn, soviel Geld in ein altes Haus zu stecken?

Yes, that definitely makes sense.

So first of all, I don’t understand the thing with the Kfw point. Almost every new building has Kfw55, and you would even get it for several residential units. I don’t understand the Baukindergeld either. If you should get the building permit by the end of March, it would theoretically still be possible with the new building. In the renovation option, you would also have to move in within 2 months. I imagine that would be difficult with a real renovation.

Apart from these points. I personally would rather live in a new building, BUT rather than in a new building with rented units, I would live alone in the renovated house. But that decisively depends on how much of the current house does not fit. For example, no basement, even though you want one? Hardly any windows? Terrible room layout?.... Only you can decide that.

So this landlord version would be nothing for me at all....And for example, the point about retirement provision is total nonsense. You can just as well renovate for 300k and still have 600k left to buy an apartment elsewhere as retirement provision. The comparison does not fit overall.