Land available - how to use it?

Hello everyone,

we have owned a plot of land for a year. It is not very large (389 sqm), but the development plan allows quite a lot.

We ourselves have decided against building a single-family house.

Friends gave us the impetus to think about whether we would like to build a multi-family house on the property as an investment. Especially since KFW now grants more repayment subsidies.

Several ideas have emerged.

1. Build a multi-family house with the maximum possible living space, and all apartments would be rented out.
2. We build a 3-family house, where each floor contains only one apartment. We would move into the ground floor apartment ourselves, and I would rent the upper floor and attic apartments to two of my siblings.
3. We build a two-family house with one of my siblings, where each receives and occupies an independent condominium.

Would you do something like this, or is there anyone here who has already realized something like this?

What is the best approach? Have an offer prepared for all three options, etc., and then choose the best one?

How do you best proceed here? Get an offer for all 3 variants etc. and then choose the best one?

First, check what is even possible in terms of building law. Then roughly assess the finances and costs.

1. Construction of a multi-family house, with the maximum possible living space, and all apartments are rented out.

Build a simple energy-efficient house with as few frills as possible.

2. We build a 3-family house, where each floor only houses one apartment. We would occupy the ground floor apartment ourselves, and I would rent out the upper and attic floors to 2 of my siblings.

Oh God! The whole gang under one roof and you’re the bad landlord. I would never put up with that; the stress is guaranteed. Also, your siblings would have certain expectations for their apartments, which would lead to higher costs but not correspondingly higher rent.

3. We build a 2-family house with one of my siblings, where each receives and occupies an independent condominium.

That’s along the lines of option 2. It’s not really ideal for resale either, as apartments in two-family houses are rather unpopular. Better to let external tenants move in and charge them a proper price. And if you already want to build with family, then please build together so that everyone can contribute their wishes and also pay for them themselves.
P.S. If you build yourselves and then sell, it can trigger a tax burden.

Personally, I would only consider variant 1 from your options. Alternatively, just sell the plot of land and pocket the money. No stress with construction and renting. Possibly even with a building permit for a 3-family house as a finished project.

Build a simple energy-efficient house with as few frills as possible.

When renting to "strangers," that would be the plan.

Oh God! The whole gang under one roof and you’re the bad landlord. I would never put up with that; the stress is inevitable. Also, your siblings would have certain demands for their apartments, which would lead to higher costs but not correspondingly higher rent.

Yes, I agree with you.. I have always gotten along very well with these two siblings and we see each other almost daily, but I realize it would definitely be different if everyone were to live under one roof.

That leans towards option 2. It’s also not really nice in the context of a sale; apartments in a two-family house are rather unpopular. Better to let external tenants move in and charge them a proper price.
And if you build with family, then please build together so that everyone can contribute their wishes and then also pay for them themselves.
P.S. If you build yourselves and then sell, it can trigger a tax burden.

Personally, I would only consider option 1 of your variants. Alternatively, just sell the land as is and pocket the money. No stress with construction and renting. Possibly with a building permit for a 3-family house as a finished project.

If I were to build with one of my siblings, then the costs would also be shared accordingly and everyone would contribute their wishes for their own apartment and pay for them accordingly.

I don’t want to sell the land – speculation tax would also be an issue there.

Thanks for your assessment

Whatever is done, I would keep the family out of the project. I would not mix business with family if it can be avoided ...

Always leave the family out and never move into your own rental property.

So I'll argue against that: I think family is great, and if semi-detached houses are an option, that wouldn't be a bad choice: sharing a plot of land - semi-detached house in the middle and a fence in between - everything nicely separated. If there's still stress, the relative just moves out again and you rent out the other half or move out yourself. But it costs a fortune.

I don't see any of the options as an investment - at least not in your lifetime. Maybe the next generation.