Opportunities for municipal land, experiences?

We looked at the leasehold properties today. 13 or 14 minutes commute, which is good. Very nice plots in a beautiful area. Talked to people who are currently building there. Everyone knows each other, cool people who build there. The only downside (because it’s unavoidable) is the leasehold right. At first, I thought it might even be rather cheap, but in the long run, you pay a lot. The people there have acquaintances with leasehold in the town, and for them, the amount hasn’t been raised in 25 years. However, even if the amount stays the same (about €120 + €36k connection fees), after about 35 years I come to the same costs as if I had bought a plot of land. After that, I’d be paying extra. On top of that, the plot increases in value. In the case of a sale after 30-60 years, I would have long since paid rent on top, even though the property is surely worth twice or more just due to inflation.

Every plot that might currently be an option has a major downside.
- Busy, noisy street directly at the property boundary
- Unattractive, cramped plot and expensive
- Long commute
- Leasehold

I can’t even decide which evil is worse. I’ll do some more calculations. I think the shortlist is the one with the long commute and the leasehold.

In addition, the property increases in value. In the case of a sale after 30-60 years, I would have already paid rent on top for a long time even though the property is surely worth twice as much or more just due to inflation.

Yes, of course. It is comparable to rent. The advantage is that you don’t have to finance the value.
A small bonus compared to conservative owner-occupied properties: You can increase the value of the house upon sale, as it tends to rise, unlike the land (land lease).

However, even if the amount always remains the same (approx. €120 + €36k connection fees), after about 35 years I end up with the same costs as if I were buying a plot of land.

Well, the only small problem is that apparently you cannot buy land there. And therefore the comparison doesn’t really make sense. Although please include the interest on a full financing of the land in a proper calculation. Then the period shifts significantly further back.

For financing a plot of land worth €90k plus ancillary purchase costs = €100k, you pay around €160k in 30 years at 3.5% interest and 2% repayment (assuming fixed interest).
For the same plot of land (let’s also assume €100k including ancillary costs, even if it is significantly less) under a hereditary building right at 3.5% ground lease interest, it is already 45 years. But it has the advantage that you do not have to finance it at all or many people would not even get this land financing.

Every plot of land that might currently be an option has a major negative point.
- Busy noisy street directly on the property boundary
- Unpleasant cramped plot and expensive
- Long commute
- Hereditary lease

No. Having too high demands could also be the problem.

It seems you must choose between two evils. Either NOT build or live with a flaw, but have your own house. Don’t focus on the problems, but see opportunities and possibilities or the positive aspects.

13 or 14 min commute, which is good. Very nice plots in a nice area. Talked to people who are currently building there. Everyone knows each other, cool people building there.

If you focus on that, the hereditary building right is not a real problem.

The plot of land costs more like 70k-80k€ when buying. At least the one with the long driving distance and the one with the noisy street. With more expensive plots, leasehold would already be more attractive but the prices here are still relatively reasonable. There are no big cities here. When I calculate ~80k€ for the plot of land compared to leasehold: Plot paid off after 28 years Leasehold after 28 years is almost 30k€ cheaper if the lease remains the same. Let’s say from then on it costs 150€ instead of 116€, then I still have about 16 years until it reaches the same amount. 45 years is already quite accurate, yes. I assume that we increase the rate after 10 years and pay off a bit faster. That shifts the whole thing forward by a few years maybe. So from 40-45 years, you pay more + the increase in land value is lost. In my case, I have to offset the saved fuel costs. But who knows how they will look in the future with possibly an electric car. But 50 years could be realistic, after that I will very likely pay more. I would be 82 years old then. Leasehold still moves forward somewhat in the evaluation.

I don’t know if these are too high demands. A completely normal plot at a reasonable price within 20 min by car would be totally fine. Just like almost everyone we know has. The disadvantages here are unfortunately a bit bigger in my opinion. The busy street, for example, is really very disturbing and I was renting directly on a 4-lane city ring road right at the traffic light. You couldn’t understand the TV when a truck drove by.

We’ll apply and see what happens.

Which one would you prefer here of the two marked? There is a slight slope to the south. However, the upper row of houses is already at the highest point. Northwards, there probably will never be any building plots, at least not for a long time. Very nice view also to the north. Also to the south, but there are other houses as neighbors there. The woman likes the lower one better because she doesn't want the garden facing the street. I don't necessarily see it that way because the upper plot has a lot of paved area in front of the house and no traffic. At the back then the top view. Up there you would have only one direct neighbor. But there is a footpath running east and north along the plot. I suppose not much will be going on on the footpath. It is rural.

Have you calculated interest? 80k at 4% over 25 years is simply 425 EUR per month, total cost over the term 126,000 EUR. And yes, even if you buy the land with equity, you still have the interest expense because you then lack the money for building the house and consequently have to finance more. Calculated this way, you don’t pay rent on top after 30 years, but only after 40, 45 years.