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?
C
Caspar202016 Jan 2019 18:25I haven’t seen this in new buildings for a long time.
There are companies that rent out the devices, handle billing, measurement, and maintenance of these, and they are installed before the manifold in the dwelling. Likewise, each room with a water connection has a meter for both cold and hot water. The costs for all of this are then passed on to the tenants.
kaho674 schrieb:
We would install underfloor heating. But then there would need to be consumption measurement for each control circuit.
There are companies that rent out the devices, handle billing, measurement, and maintenance of these, and they are installed before the manifold in the dwelling. Likewise, each room with a water connection has a meter for both cold and hot water. The costs for all of this are then passed on to the tenants.
I would not recommend tankless water heaters or boilers. That technology feels outdated. It’s better to install separate water meters for hot and cold water.
For underfloor heating, you can install heat meters in each apartment. These are also available with wireless reading capabilities. However, they tend to be quite expensive and need to be regularly replaced or recalibrated (even without wireless). The costs can usually be passed on through service charges.
The usual providers for heating and water metering and billing are Brunata, Ista, and Techem, to name some of the major companies.
For underfloor heating, you can install heat meters in each apartment. These are also available with wireless reading capabilities. However, they tend to be quite expensive and need to be regularly replaced or recalibrated (even without wireless). The costs can usually be passed on through service charges.
The usual providers for heating and water metering and billing are Brunata, Ista, and Techem, to name some of the major companies.
Tankless water heaters are commonly used for domestic hot water when the outlet is more than about 10 meters (33 feet) away and hot water has to travel a long distance, although I don’t know the exact distance. Especially nowadays, when “electricity costs” seemingly no longer matter. This is not something outdated.
ypg schrieb:
Instantaneous water heaters ... are not outdated at all. Yes, long distances would be expected. The building alone is 40m (131 feet) long and has 4 floors...
ypg schrieb:
This is not outdated at all.Ok, the new electric systems aren’t bad. But you still have to watch the connection load so the cables don’t overheat... although I mostly see that in renovations of older buildings. New electrical wiring is easier to install than additional hot water pipes.
Hot water pipes are usually insulated and operated with a circulation pump and timer control. You can certainly debate which option is better or more cost-effective in the long run.
Spunk schrieb:
One can certainly have a good debate about what is more efficient or cost-effective in the long run. I can imagine that. Continuously circulating water through long pipes all the way up to the fourth floor requires more than just a small circulation pump. An instantaneous water heater is definitely easier in comparison and also more straightforward for tenants to understand. Unfortunately, ours only activated once the water pressure reached a certain minimum level. So, it was never possible to run just a small amount of warm water. That used to annoy me.
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