Planning a multi-family house - optimizing costs

To put it bluntly... she should build her bungalow - for you it is probably also financially cheapest if you directly support Mom financially in case of emergency, hopefully only many years from now (you can already make provisions). Are you the only son?

If you get involved at all, make sure the bungalow is well usable, even for a family of four (floor plan issue!), so that it can hopefully have good reuse in the distant future.

And I also like the advice from - if there is such a person.

Hi, yes I am the only child. Planning the bungalow sensibly, I was already doing that with her and the architect of a provider, but that was even more expensive, which would have used up the remaining capital even faster. In that area we keep going in circles.

I had already mentioned that. But I would also turn it around. If Mutti has such high demands or is "difficult," how will a tenant like living in a house where difficult landlords live? I know some cases of regular tenant turnover when the landlord = owner = neighbor drives away his tenants and constantly complains about the costs of tenant turnover.

I have also thought about it. Overall, I understand that it is not the optimal solution, but in my assessment, it is still the best possible one among the alternatives feasible for you.

How high would the price be for a nice hipped roof bungalow with you?

We ended up with additional costs, including the kitchen, at 350 - 400 thousand euros. But she didn’t like the bungalow and it was still too small. And the layout was a disaster.

May I ask how old she is?
I guess around 60 (you mentioned the age as 39), so she’s still in the middle of life and her expectations are understandable. However, even at this age she is still very responsible, so she should actually be aware of the imprudence.

Mid 60s – as I said, when it comes to living, her emotions absolutely prevail, not the rational.

As a first-degree relative, she only has to pay you half the cold rent. The rest is a tax loss for you.

I think that is actually the real problem here, the psychological one :(

According to my information, 2/3 because of the depreciation, but then she also has to invest the money securely again so that she can use it over the long term. For me, the rent increases the taxable income; I cannot cover the full loan net from it, meaning I would have to contribute additionally.

Yes, the real problem is the psychological one, no question. At the moment, a construction project, in whatever form, is a fixed point for her.

Is she even able to have "strange" people in the house, noise, sounds in the hallways when people come home and leave, parties/visitors, possibly pets, etc. etc. Later you'll be to blame if she feels uncomfortable and would have preferred to have a bungalow after all..

We talked about that, as it could, of course, become difficult. But she understands that with her "demands," the bungalow alone with capital consumption is an issue that will probably go wrong (in the medium term).

If she then had to move out at 80 and is as fit as my grandmother was, she wouldn’t emotionally survive that either. And my grandmother lived to be 98. If she can realize her living space wish through the multi-family house regarding size, has her garden (even if smaller), and gets that secured through 1-2 rents (estimated €1,000 per month) that secure her part for the future, then she sees that consistently as a positive compromise.

She also doesn’t want to "unnecessarily" spend the money herself but would like to leave something of lasting value for the grandchild. She is therefore stuck in a dilemma between her wishes again.

I want to restrict my "like" of your post exclusively on this point, in that I assume, as is well known, that the market for retirement homes will be able to function well as a closed system in just a few years.

Of course you are right, but still a retirement apartment of this size is once again beyond the mainstream. In the end, there are probably not that many who want and can afford it. (Of course, a well-off retired couple who can easily pay for household help and a gardener... for them it surely fits, but by far not all retirees fall into this category). I don’t quite understand Mutti’s financial situation. She has savings, but little ongoing income? With the savings, one could build the bungalow, and then withdraw amount X every month from the rest, which would allow one to foresee when the money is used up? I would still advise against the multi-family house idea. The question of whether the planned five apartments would even be approved has completely fallen out of focus. With a maximum of three that seem “certain,” the whole construct collapses (two rental apartments each generating income for you and Mutti). Let her build her bungalow and that’s it. If, in 15 years, the worst case really occurs, you can deal with it then. But I would already start saving now.

We ended up with additional costs, including the kitchen, at 350 - 400 thousand euros.

How exactly does that break down? It really seems relatively expensive.

But she did not like the bungalow and it was still too small.

I would try to proceed here with standard floor plans from the major prefabricated house providers. She should just make a selection. Or to put it another way, what does she not like about a normal bungalow floor plan that leads to price inflation?

If she then had to move out at 80 and was as fit as my grandmother was, she wouldn’t survive that emotionally either. And my grandmother lived to be 98.

You always talk about her having to move out at some point. But why exactly? I don’t understand that. If due to illness, confusion, or other ailments it becomes impossible for her to live there anymore, then she has to move out, no matter where she is. That’s how it is, and the same would be true in a rental apartment or wherever she lives.