Table of contents:
- Removal and remodeling costs
- Planning with foresight
- Building society contract helps with financing
- Rental income finance the expansion
- Financial guidance example from LBS
- LBS expert advice: "Invest further"
If the family grows, even a home can become too small. Fortunately, home savings contracts are also ideal for expansion.
After moving into your own house, there is initially plenty of space. Three bedrooms are enough: one for the parents and one for the children, who initially like to share one room. There is even room for guests. But over the years the children and their demands grow. And soon one of the offspring conquered the guest room. Finally, visitors can also spend the night on the couch in the living room. Problem solved? Not necessarily. Because as soon as the children are older, many parents want to accelerate professionally again. Now a home office would be ideal.
Experience confirms the much-quoted rule: a room is always missing. With a bit of creativity, reserves can still be found in most properties: under the roof, in the basement or as an extension next to the house. In this way a move can be avoided, and with the expansion your own property even gains in value.
Removal and remodeling costs
How much money owners have to invest for the expansion or renovation depends on the scope of the construction measures and the desired equipment. Are you looking for a cozy retreat under the roof? Then builders can roughly calculate around 800 to 1000 euros per square meter of living space. The addition of a small apartment with its own kitchen and bathroom costs a little more.
Planning with foresight
So that not only the financing works, but the money is also invested very well, builders should keep an eye on the long-term uses of the expanded living space. What should happen to the area when the children have moved out? “Ideally, there is a separate entrance. At least connections for the kitchen and bathroom should be made,”advises Heinz-Hermann Arens from LBS. Then maybe your own parents or a housekeeper can move in later - or the studio is rented out and thus improves your pension.
Building society contract helps with financing
Anyone who has already saved a building loan contract ready for allocation can now apply for the loan and finance the planned additional square meters with the home savings sum. Others may need a larger sum and still want to start remodeling soon. LBS can also help here: with a pre-financing loan that closes the financial gap. LBS building society tariffs with short savings and repayment times are particularly well suited to pay off the debts in a few years. For example, with an LBS loan of over 50, 000 euros, the monthly installment is around 494 euros (see table). No matter how interest rates develop on the capital market in the future, the burden remains unchanged throughout the term.
Rental income finance the expansion
A granny flat can be rented out well. Perhaps a parent wants to move in there, or an adult child chooses to grow it as the first separate place to stay. Our financing example shows: Even those who rent cheaply to relatives can cover a good part of their costs with the rental income.
Financial guidance example from LBS
|Funding period||1st - 4th year||5th-9th year|
|Financing costs||per month||per month|
LBS pre-financing loan
(1.30% pa borrowing rate fixed until allocation, 2.26% APR, no repayments)
|€ 50, 000||€ 54.17|
|LBS building society contract
(Savings amount: 50, 000 euros, Home loan: 2.75% pa
fixed borrowing rate, 3.17% APR) *
|€ 50, 000||€ 440.00||€ 494.17|
|Total funding||€ 494.17||€ 494.17|
|Rental income||€ 300.00||
LBS expert advice: "Invest further"
Heinz-Hermann Arens, LBS district manager explains: “Would you like to invest in your property through renovation, extension or modernization? Have you not yet completely repaid your current building loan? No problem with the LBS. Up to a loan amount of EUR 30, 000, LBS may grant loans without collateral. Advantage: You do not have to have a land charge entered in the land register and thus save fees and time-consuming paperwork. This so-called blank loan is only secured with your credit rating. This does not affect your ongoing financing in any way. LBS can also grant loans in the amount of more than 30, 000 euros without entering a new land register. This can benefit property owners who have already secured their existing financing through land charges. If the remaining debt on current loans is less than the hedge, the difference can be used as collateral. With the combination of a pre-financing loan and building society contract, you always get the cheapest building interest for your project.”