ᐅ Sell the entire property or opt for a partial sale with reinvestment?
Created on: 10 Jun 2018 13:41
K
kaho674
There is a large property in the family located in the center of Dresden. It is a residential area—surrounded by 6-story or even taller new apartment buildings. The land is currently occupied by a very old factory building. The owners do not have the funds to demolish this building and replace it with modern new construction. On the other hand, the ongoing costs and rental income are just about breaking even. If income continues to decline, the property could financially ruin the family.
So the question is what should happen with this "factory land." It is quite certain that it could be completely redeveloped since there are multi-family buildings all around. Adjacent to this land is the family’s own business property (including land), which is not intended to be sold as it is their livelihood.
The immediate idea was, of course, to sell the entire factory land. Its value is estimated at around 1-2 million (minus demolition costs), without going into details here. The money could be taken, divided among the family, and essentially spent without long-term benefit.
However, there are also grandchildren who are struggling to establish themselves in Dresden. The family would like to support them over the long term and believes that a rental property would be ideal. Coincidentally, the grandchildren are trained in property management and could help oversee the project.
So the idea came up to sell only part of the land to gain liquidity, demolish the old building, and construct a multi-family house—ideally in collaboration with an investor who would buy and develop the other half. Of course, everything would need to be carefully calculated to see if this is feasible and if the land will generate enough value.
Is something like this possible, or is it just a scam? What would you do?
So the question is what should happen with this "factory land." It is quite certain that it could be completely redeveloped since there are multi-family buildings all around. Adjacent to this land is the family’s own business property (including land), which is not intended to be sold as it is their livelihood.
The immediate idea was, of course, to sell the entire factory land. Its value is estimated at around 1-2 million (minus demolition costs), without going into details here. The money could be taken, divided among the family, and essentially spent without long-term benefit.
However, there are also grandchildren who are struggling to establish themselves in Dresden. The family would like to support them over the long term and believes that a rental property would be ideal. Coincidentally, the grandchildren are trained in property management and could help oversee the project.
So the idea came up to sell only part of the land to gain liquidity, demolish the old building, and construct a multi-family house—ideally in collaboration with an investor who would buy and develop the other half. Of course, everything would need to be carefully calculated to see if this is feasible and if the land will generate enough value.
Is something like this possible, or is it just a scam? What would you do?
H
HilfeHilfe28 Jun 2018 21:19Cool mentioned twice
Spunk schrieb:
YouTube is full of videos on how to invest money in real estate. I consider YouTube to have more expertise when it comes to funny life hacks and makeup tutorials, if you know what I mean...
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
A consultant recently suggested the idea of offering student dormitories. The university would be reachable by bike, and the many small living units would be very profitable. Even when accounting for the constant turnover—the buildings would be constructed differently—this could be a profitable solution. What do you think?
Student dormitory also doesn’t sound bad. It saves underground parking spaces on one hand, but requires more bathrooms and kitchens.
And if you’re not afraid of the additional effort.
DD should have many students. So you should find out the demand and prices from the student services organization.
And if you’re not afraid of the additional effort.
DD should have many students. So you should find out the demand and prices from the student services organization.
N
nordanney16 Aug 2018 10:36Student apartments are currently experiencing significant growth, especially in suitable locations or cities. In Düsseldorf, Bonn, Frankfurt, etc., you can get between €20 and €25 per furnished student apartment. However, this also depends on the average financial willingness of residents in each city.
Points to consider:
Market analysis and competitive situation?
Production costs are not exactly low
Furnishing
Features such as high-speed Wi-Fi in every unit, network infrastructure, etc.
Common areas like billiards, TV, study and relaxation spaces, laptop connections are standard in larger, newer developments
Additional services such as laundry facilities, security concepts, e-bike charging stations are also increasingly becoming standard
High administrative effort
High ongoing maintenance costs
Significant investment required
These are a few points that come to mind.
Points to consider:
Market analysis and competitive situation?
Production costs are not exactly low
Furnishing
Features such as high-speed Wi-Fi in every unit, network infrastructure, etc.
Common areas like billiards, TV, study and relaxation spaces, laptop connections are standard in larger, newer developments
Additional services such as laundry facilities, security concepts, e-bike charging stations are also increasingly becoming standard
High administrative effort
High ongoing maintenance costs
Significant investment required
These are a few points that come to mind.
nordanney schrieb:
Points to consider:
Market analysis and competitive situation?
Construction costs are not exactly low
Furnishing
Facilities such as high-speed Wi-Fi in every apartment, network infrastructure, etc.
Common areas like billiards, TV lounges, learning and chill spaces, laptop connections are standard in larger new developments
Additional services such as laundry facilities, security concepts, e-bike charging stations are also becoming increasingly common
High administrative effort
High ongoing maintenance costs
High investment requirements
These are a few points that come to mind spontaneously. Great, thanks for the suggestions!
The consultant said he has completed a similar project and all units were taken within a very short time. So demand does seem high, especially since we have not only the technical university but also the university of applied sciences here.
Aside from the cost and technical aspects, I’m mainly wondering if it fits into the residential area. The surroundings consist of many former East German panel buildings that have all been modernized and are well, if not fully, occupied. Many retirees live there since our parents’ generation stayed in the area. It’s not a neighborhood like "Family Flodder" in Gorbitz, but more like "Family Schulze and Schmidt." If a lively group of young students moves into this neighborhood, can that work?