Hello "Yuccapalme",
now I will also add my "two cents":
Because I would take my time with the renovation and only work with the money I actually have on hand. Of course, I would only buy a house that is livable... do some initial renovation work beforehand, live there for a few months, and then move in... renovate bit by bit while living there. I wouldn't take out an extra loan for the renovation, and I would do everything myself... so no companies involved. I know people who are familiar with house construction, they can give me tips... my grandparents already built a house themselves and also helped my aunt with building her house. No idea if I’m imagining this too utopian... so that the renovation then takes ages.
Your optimism is commendable, but desire and reality collide there. I have already viewed many renovation projects within the financial range you favor, but there wasn’t a single one you could have moved into immediately. That would have only been possible under the worst, most primitive conditions, in which you certainly would not want to live for a short or even longer time. In most cases, it more or less involves "gutting" the building, i.e. from the basement to the roof, all ceiling and wall structures are removed except for the structural elements. Of course, there is then no electricity, no water, and no heating. Hardcore camping enthusiasts might survive in a sealed-off closet or a separate caravan, but would that be acceptable for you?
The "bit by bit" strategy only works with simultaneous living after a certain level of renovation progress: at least one finished room, a cooking area, and a washing facility. Depending on the size of the property and the extent of renovation, this can be reached after half a year to a year or only after many years.
A friend of mine recently bought an old house with a similar belief: "cheap" purchase price, move in right away and then always "tinker bit by bit.” For the viewing, he even took a retired civil engineer from the family with him, who unfortunately must have been blind that day. Result: besides a hefty loan (full financing and a high land and building price due to location), the family of four is drowning in ongoing costs because they are operating a gas boiler on a former gravity heating network where the huge pipes are embedded in the exterior walls. I would call that financing "global warming" through private overdraft credit. Just from photos, as a layman, I could identify construction errors and defects whose remediation would almost mean partial demolition of the house: no diffusion-open underlayment despite mineral wool insulation in the roof slopes, meter-long unbonded, open joints of the vapor barrier/damper, primitive electrical installation without protective conductor, etc. Regarding heating, I offered my immediate help free of charge, which was promptly rejected. They said they had to tear down the nice wallpaper that was put up over the mess before moving in. Everything is sugarcoated and self-deceit continues until the money runs out. It isn’t even enough to carry out necessary measures properly. It only takes the car to break down or some other unexpected, necessary expensive thing to appear to quickly put an end to the misery. But why do we have the nice new insolvency law with discharge of residual debt? The question is only: do you want something like that?
I have a 150 sqm house built in 1938 that I managed, after one year of renovation work in person, to make livable. But not everything was finished, and I was back in the dirt as soon as I opened the door of a finished room. After two years, the interior was at least finished, but then construction continued outside: completely exposing, cleaning, drying, replastering the basement walls, perimeter insulation, completely replastering the facade, cleaning and re-grouting the brickwork base, etc. Looking back, I can say that this action went relatively fast because the house was quite small and not completely dilapidated—but the purchase price was above the range you prefer.
Now I have been renovating a real "zero-euro" house for over seven years, where in half the building only the load-bearing elements have really remained original. Fortunately, in the other half, I was still able to save old floorboards. But 250 sqm of roof area, over 100 sqm of wooden beam ceilings with floor assembly, the entire interior plaster, 25 sqm of bathrooms, nearly 300 sqm of ceiling surfaces, all electrical, telephone/LAN, heating, and sanitary installations had to be redone. Due to the extensive fundamental work, I could only install the heating in the fifth year. Since then, I have at least been able to live somewhat comfortably on the construction site. Well, others may be tougher when it comes to comfort, but I hate camping. In the eighth year, the switch from a weekend house to a residence can finally take place, although there is still a lot to do. Here the strategy "living and building at the same time" only started to work much later.
Since your finances, according to your statement, are not very generous either, you will only get as far as your "money in hand" lasts. Especially at the beginning, you have to take big steps to make the house dry and tight. An initial investment sufficient for a new roof and new windows was necessary in all renovation houses I had seen. Only then can you apply the "small steps" strategy, whereby move-in readiness, however, recedes further and further into the distance. I do almost everything myself and therefore only have to pay for the materials, but even that has become an expensive affair due to exorbitantly rising prices. Believe me, it is pure torture when you can’t progress properly due to lack of money. You can insert limited pure manual labor in between that requires a minimum of material, but eventually, everything is torn down, all doors, frames, and windows burnt out, repaired, filled, and sanded—and then you have to spend money again. Diligent helpers might be good, but they also need materials and must be kept in a good mood. Furthermore, you have to hold back on criticism and, in the worst case, of course, have no warranty claims. In addition, most insurers do not cover "neighborly help" without an extra clause. What happens if someone gets injured or if you suffer damage to newly built parts? In my opinion, that is something to consider if you don’t want to do everything alone.
Why shouldn’t you build like in the old days (who says the quality was worse then than today)? I see no disadvantages, even advantages.
"Building like in the old days" is an illusion. Just as historical events can generally only be judged in the context of their respective time, you cannot transfer old construction methods 1:1 into our time. We are subject to completely different constraints than people 100 years ago. Fortunately, we don’t have a war or immediate war aftermath to endure, but we have to bear the civilian madness of an industrial and political clique that annually imposes new limits and regulations on home builders and renovators. The measure for sensible energy saving, in my opinion, has long been exceeded; now it is only about maximizing profits on both sides through constantly increasing sales (e.g., in the insulation industry) and increased taxes and fees (e.g., Renewable Energy Act levy, electricity tax). Whoever does not want to become a total outlaw or sociopath must submit to the conditions and make the best of it. Even if you wanted to, you would not be allowed to present an uninsulated house as completely uninsulated after comprehensive renovation. The Energy Saving Ordinance 2014 will probably still provide a kind of "grandfathering," but—as in building law—this is lost in the case of extensive measures to the affected component, for which then also the stricter regulations apply.
The property transfer tax + the property tax depend on the value of the property. That means, if for example I buy a property for 50,000€ instead of 150,000€, these two taxes differ significantly... so this is also a pro for cheap houses, especially for the property tax, which you have to pay annually for the rest of your life. Or is it the case that the property tax changes once I renovate the house, i.e. increase its value? Or does the property tax remain the same?
In addition to the explanations by mycraft, I just want to note that the savings potential with a "bargain house" with the lower property transfer tax is already exhausted. With property tax, you have to fear not only the value progression but also the use progression. This would be the case, for example, if a rental property lot is converted into a single-family house. This then changes the valuation method; a change from the income approach to the cost approach usually results in a higher assessed value. The valuation in the new federal states fundamentally differs from that in the old ones; a detailed listing of the methods would exceed the scope of the forum. The principle, however, is that the conditions at the main assessment point (East: 1/1/1935, West: 1/1/1964) are decisive. In the case of renovation, this means, e.g., in the income approach, that the annual gross rent is applied according to the value relationships at the main assessment point but for the condition at the assessment point (= end of renovation). The multiplier is set by the municipalities, so there are "expensive" and "more affordable" places in terms of property tax.
kaho: What a mistake! On the contrary, in the past, especially poor families were quartered in new houses for 2 years for "dry living." Only after that did the real owners move in or the house was sold. After two years of dry living, you would also have no mold in today’s houses, assuming you disregard big construction blunders.
"Dry living" back then was not due to mold prevention but to the widespread use of air lime mortars. This usually hardened through the carbon dioxide produced by poor people:
CO² + Ca(OH)₂ = CaCO₃ + H₂O
I wish you a merry, construction-free Christmas!