New construction, selling, renting? Idea generation

You already have 240K in debt and now want to take out another 400K for a home? If I were the bank, I would be skeptical. For that, one would need to know your income.

I would probably try to keep the building plot for the children later and rather look at what options the old building still offers. What about an extension, for example? I assume the roof is already being used?

We have also already considered an extension. It would theoretically be feasible, but would need to be clarified with the authority. But then all the disadvantages of the old building remain. A ventilation system would be sensible to save the three-times-daily airing. Insulation would make sense, but that brings problems again. And the extension also costs 50,000,-.

You can forget about the roof. We already thought about that a few years ago. But you only have a width of 1.5m where you can walk upright. That’s why we simply laid the top floor ceiling with mineral wool as insulation.

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Location is about 50 km radius from Munich with top train connections. Excellent highway access. All doctors and schools on site.

And then only 190 sqm rental space on 1600 sqm of land in a property from the oil heating era. Considering the existing property at all shows an emotionality that a commercial real estate developer would not "allow" themselves. Whether own renovation hours or funds or the uncle's family: these are hobbies - admittedly sympathetic, but purely from a business perspective they actually belong on the negative points list.

Since the Munich area: If the municipality and development plan cooperate, you can play developers against each other: you give the land in front for a semi-detached house to the developer, your old house is demolished by them, and in return you get a 140 m2 house at the back in a more or less extended shell construction (depending on negotiation skills).

The uncle could buy a semi-detached house at the front if that should be an option. Or with the size of the plot, you build another semi-detached house together.

But then all the disadvantages of the old place remain.

Yes, and all its advantages. Of course, a new house is nicer because it is built individually for you. If you can finance it on acceptable terms, why not? Have you already approached the bank about it? You don't have to worry if another loan would be unrealistic. Possibly the number of options decreases just because of that.