House renovation: Costs and step-by-step instructions

If you dream of your own four walls, you are usually faced with the following question at the beginning: New or old building? If you decide to build a house, you can design it entirely according to your individual wishes and ideas. However, new construction usually comes with high costs and a long waiting period for this to happen. For many people, the choice therefore falls on the second alternative – they simply buy an existing house. But beware: with the purchase price it is usually not done, especially in older buildings.

Renovate your house: Here's how you should proceed

About 50 percent of the total stock of real estate in Germany is old buildings. Roughly speaking, this applies to houses that were built more than 50 years ago – i.e. before 1970. However, you should not underestimate the renovation effort of younger houses either. While you often have to reckon with structural problems such as rising damp, poor insulation and thin walls in pre-war buildings, it is not uncommon for more recent houses to have structural-chemical weak points. For example, the harmful substance asbestos was still permitted until 1993 and was thus used liberally in the construction of numerous houses.

Step 1: Take a close look at the current situation

If you want to buy a house or have inherited one, you should first put the property through its paces. While some defects, such as extensive mold growth or leaky windows, are obvious to the layperson, other problems are noticeable only to a trained eye. It is therefore inevitable to consult a real estate appraiser. While a building expert may well cost several hundred dollars, it can save you from making expensive bad decisions. If you forgo an appraiser and don't notice serious defects until after the purchase contract has been signed, your chances are rather slim: When buying real estate, the principle of "bought as seen" usually applies.

What's more, a building expert won't just point out hidden vulnerabilities like moisture in the walls, an outdated heating system or a dilapidated attic. He or she will also educate you on what energy retrofits are mandatory under the Building Energy Code (BEC) and what subsidies you are eligible for. The expert will also inform you about the legal framework: For example, if the building is a listed building, you have to adhere to strict conditions.

The surveyor will also be able to give you an initial rough estimate of the costs, which can help you decide whether you want to renovate the house. Especially with older buildings, renovation measures can easily amount to 60 percent of the purchase price. As a rule of thumb you can remember: If the renovation is likely to cost more than three quarters of the purchase price, you should better keep your hands off the property.

Step 2: Create a plan of action

Once you have listed all the shortcomings and weaknesses with the help of the expert, it is necessary to prioritize them. Here, you should keep in mind two golden rules:

• Always proceed from the outside in. Because renovation work always builds on each other. The new, energy-efficient heating system is of little use to you if the windows are poorly insulated and thus the cold penetrates from the outside.
• First work on the "real" defects and then take care of your wishes. Especially static-constructive as well as health-endangering deficiencies should be worked off first. Only when there is still money left over should you start with visual renovation measures such as new floors, a contemporary room layout or modern doors. In case of doubt, these measures can be carried out at a later date.

When prioritizing your list of defects, also take into account all measures that are necessary from an energy point of view. For example, the Building Energy Act may require the replacement of old windows, the insulation of floor ceilings and roof insulation. If this applies in your case, you must undertake the appropriate renovation measures. Otherwise, you will be threatened with fines of up to 50.000 euros.

Step 3: Request offers

You now have a list of renovation work in front of you and also know which measures have top priority. On the basis of this action plan, you can now obtain quotes from tradesmen. Do not hesitate to ask for quotations from several tradesmen so that you can compare costs.

In order to reduce the costs of renovation, you should also consider whether you can carry out some of the work yourself. However, don't overestimate your craftsmanship: While you can usually do the interior work yourself, you should call on a specialist, especially for major remedial work. This is advisable in terms of safety and warranty alone. If you make a mistake with more complex work, this can result in high follow-up costs.

Tip: You can deduct tradesmen's costs from your taxes. However, you may only claim the pure labor costs minus VAT and additional items such as travel costs. However, the upper limit here is only 1.200 euros, which is why the tax advantage for comprehensive building renovation unfortunately carries little weight.

Step 4: Financing

Last but not least, it's time for budget planning. Although you can now put a relatively precise figure on what the necessary renovation measures will cost, you should leave a little buffer. Additional defects often only become apparent during the work, which result in correspondingly higher costs.

Also check whether you are entitled to state, regional or municipal subsidies. The Federal Office of Economics and Export Control (BAFA), for example, subsidizes individual energy-related measures with up to 10.000 euros. With the KfW subsidy, you can also obtain low-interest loans specifically for the energy-efficient renovation of existing buildings. If you do not have the remaining amount on the high side, you can apply for a modernization loan from your bank or another credit institution.

Renovation costs: cost examples and overview

It is not possible to make a general statement about the costs you should expect when renovating your house. Even the many renovation calculators that you can find online should only be considered as a rough guide. Basically, the cost of renovation depends on numerous factors, including:

• Age of the property
• Structural and chemical condition of the property
• Size of the house
• Extent of the remediation work
• desired optical measures and preferred equipment

Experts assume that for a complete renovation you should expect to pay around 400 to 600 euros per square meter of living space. If you have to renovate a house, the total costs may well be in the middle to high five-digit range.

Average costs of individual renovation measures at a glance:

Renovation measure	Average costs
Insulation of the roof	50 to 90 euros per square meter of roof area
Renewal of the roof truss	60 to 120 euros per square meter of roof
Covering the roof	About 100 euros per square meter of roof area
Insulation of the external wall	depending on the method, 100 to 200 euros per sqm of facade area
Facade painting	about 25 euros per square meter of facade area
Floor insulation	30 to 50 euros per square meter of space
Window replacement	depending on the model, about 500 to 1.000 Euro per window
Renewal of electrical installation	70 to 100 euros per square meter of living space
Replacement of the heating system	7.500 to 25.000 euros

In principle, there are hardly any upper limits to the cost of refurbishment – especially if you attach importance to upscale fittings and fixtures. A new parquet floor, modern design radiators or an extensive smart home system quickly drive up the total cost of renovating and modernizing your building. Accordingly, it is important to prepare an accurate financial plan in advance and to rank the actions according to their relevance and urgency.

Conclusion: A house renovation is an expensive undertaking

Do not fall for supposed bargain prices when buying a house. The purchase price of your property may seem attractive: If you have to renovate the building, the costs for this undertaking can amount to up to 60 percent of the purchase price. If you still want to buy an existing property, you should not save in the wrong place: Consult an experienced surveyor in order to be able to quantify the probable costs for the refurbishment as accurately as possible. This is the only way to rule out costly surprises from the outset.