New construction or house purchase and renovation in Bavaria

  • Erstellt am 2023-10-26 22:51:45

Wo1z3rl

2023-10-26 22:51:45
  • #1
Hello everyone,

I have been a (mostly) silent reader in this forum for several years. My husband and I moved from the city to the Bavarian countryside about four years ago, and we have been looking for a suitable property for three years now. Unfortunately, we never really found the right one – sometimes we were a day late, sometimes the desired property went to the neighbor, and so on.

We are a family of four, our two children are 2 1/2 and 5 years old. I work full-time, while my husband is a stay-at-home dad and homemaker. We have good savings and an additional net income of about 4,500 euros, including child and family allowances, but excluding possible bonuses.

The situation is as follows: My grandmother owns a plot of land in our town, about 1200 m² (about 300 m² of this is a private road, so 900 m² could be built on). About a year ago, she offered to give us this land for free (the standard land value in the new development area is 135 euros per m², to put things into some perspective). After talking with my grandmother, I spoke with the potential heirs, i.e., my father and my three uncles, and initially, none of them seemed to have any problem with it. However, at least one uncle seems to have some underlying concerns, as he started talking to my grandmother about her possible will (there isn’t one), which she did not find funny at all.

The land is located right in town, has no specific development plan, and is designated as a mixed-use area in the land-use plan. The neighboring plots mostly consist of gabled roof houses, ranging from single-family homes to multi-family houses. There was an approved building permit process for this plot in 2003 for a house with a granny flat by one of my uncles, but he ultimately decided against building. The floor plans are no longer quite state of the art today (pellet heating with a large tank in the basement, etc.), I have seen them from my uncle. To make it short, my husband and I decided after all the drama (and because I am picky and would actually prefer a south or west-facing slope) to continue looking for renovation projects instead.

Now the situation in our region is such that only run-down properties are available for at least 250,000 euros, while decent houses, mostly from the 1980s, cost around 450,000 euros. In the neighboring town, there were also new semi-detached houses for 430,000 euros, but these are too small for us (missing a study), and the neighboring town is remote and has no conveniently reachable local supply facilities.

My father-in-law currently lives in the apartment next to us. If we can afford it, we would like to include him in a granny flat. Most of the older existing properties had really large living spaces with 220-300 m², so it seemed logical and reasonable to us to somehow integrate him into the planning. Of course, we would also try to do this with a new build.

The big question now is whether we should continue trying to find a renovation project or seize the opportunity and build on grandma’s land? We are thinking of a house with about 160 m² of living space, a 40 m² granny flat, and a double carport – all with a budget of about 500,000 euros plus 10% buffer? According to the rule of thumb of 3,000 euros per m², that is going to be very tight. :-( My husband usually has some free time in the mornings, but in my opinion, he lacks significant handicraft skills, so I would really try to commission all trades.

I have already compiled a list of construction companies within a radius of about 50 kilometers. The question currently occupying me is the financial stability or liquidity of the construction companies: These are usually GmbHs – How does one assess such a thing as a potential future builder? Would it be better here to avoid smaller companies and choose a larger one?

Thank you very much for reading!
 

ypg

2023-10-26 23:23:09
  • #2
… the problem is additionally that the rule of thumb only refers to the living area or the house itself. On top of that come the ancillary construction costs, garage, outdoor facilities, i.e. also terrace and driveway. Is it a hillside property?
 

11ant

2023-10-27 01:27:19
  • #3
A 50 km radius is already a bit much, that sounds to me like little "planning" in the selection and the desire to draw from a large pool of candidates instead. Your architect can definitely name suitable companies for you. A GmbH is pretty much the classic legal form for a construction company, and a company’s economic health risk has little to do with its legal form. If GmbHs are still too small for you, what do you expect from a stock corporation or what are you thinking there? There is no such thing as too big to fail. A completion guarantee is more useful to you – and an architect who knows his experts. I professionally find architects and construction companies and have already written some posts here in the "Experiences with construction companies" section. It’s not rocket science to assess companies, look at the relevant posts. But it’s also a bit of a matter of practice, it can’t just be explained in half an hour. But better first go to a financing advisor, and then plan your house. With their preliminary draft, you can then meaningfully start your search. I recommend a proper tender anyway, and you can already read a lot from the response behavior of the bidders you ask.
 

KarstenausNRW

2023-10-27 09:21:50
  • #4
In my opinion, the choice of construction years is a choice between the devil and the deep blue sea. Houses from the 80s are just the right age to already have a lot of renovation needs. The roof is often approaching the end of its life. The heating system is oil or similar with old radiators, the windows are only slightly better than single glazing in the run-down properties, energy efficiency classes G-Z, etc. Then better something really old, where you know you have to tackle everything and that is factored into the purchase price. With the 80s houses, something has often been done in the meantime or it looks well maintained – and the seller thinks he can get a lot of money for it. And you think you can just move in (which you can) – but once you are inside, you no longer like the bahama-beige bathroom so much. Or the heating costs do hurt and your feet are always cold (no underfloor heating, basement ceiling not insulated). And so on. Good question, next question. I currently would not want (or be able) to build a 200 sqm house all in with a budget of 550K euros (with companies), because depending on the ground conditions (foundation, hillside location), development (house connections), architect, etc., driveway, terrace, etc., the first 100K euros (or only 75K euros or even 175K euros) are already spent. And then, without major personal contribution as you write, only 450K euros remain for the house (for two living units, so more expensive bathrooms, more electrical work, more entrances, etc.). That is 2,250 €/sqm for construction costs. And that will not work.
 

Wo1z3rl

2023-10-27 10:20:46
  • #5

Right, yes, my uncle’s planning back then included a basement living area. I have inserted a photo from January, the street is also included. Behind the row of apple trees there is still a strip of land about 1.5 m wide.

[ATTACH alt="PXL_20230111_142751042.jpg"]82608[/ATTACH]


thank you for your detailed contribution. Unfortunately, we have no one in our relatives or acquaintances who has built with an architect in the last twenty years. So far I have picked out a lady in this regard, whom I want to call after regaining my voice (thanks to a cold!).
Regarding the construction companies: we live quite rurally here (Lower Bavaria), if I go within a 20 km radius, the selection already becomes tight. Therefore I have initially considered companies recommended to me by acquaintances and colleagues, even if they might be a few kilometers further away.
The companies also build in Munich, for which they drive a good 2 hours one way.

The completion guarantee sounds exactly like the security I was looking for. Thank you very much for that!

The 550K euros is our intended budget for the residential building, without needing to engage a financing planner.
Assuming the granny flat is reasonably possible in our building project, then my father-in-law could potentially contribute the additional costs for it through the sale of his current (not barrier-free and too large) apartment. We were already close to buying an existing property, and he would have moved in without hesitation and shared the renovation costs.


I conclude from the answers that we can probably manage a ~155 m2 house with our own funds, but should speak again with my father-in-law about the granny flat.

Regarding the issue with 80s houses, I absolutely agree with you. Moreover, it was apparently fashionable in this area to put a sauna landscape in the cellar, with about 15 running meters of balcony and all of it maintenence-intensive wooden panelling. That all has to be processed first...
 

hanghaus2023

2023-10-27 10:56:49
  • #6
If grandma hands it over to you that easily, that's fine. But in my opinion, it won't be completely free. (Schenkungssteuer, Grunderwerbsteuer Notar, Grundbuch, Erschliessung usw.)
 

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