Hello,
after receiving such great help here in the forum regarding my question about cancellation periods, I’m coming back with another situation.
Maybe there are experts here who can help me make a decision on this topic as well.
Here’s the deal:
On our neighboring property, there is an old house, estimated to have been built around 1900, with a thatched roof, and the plot is about 800 square meters (8600 square feet).
The house belongs to my mother-in-law.
Currently, there are two rental units in the house; one is vacant at the moment, and the other is rented out.
Now the property is up for sale because the money is needed.
The construction company said that renovating for personal use is not worthwhile; demolition and rebuilding would be cheaper.
A real estate agent apparently came to appraise the property—I’m not entirely sure, but he suggested they might get around €160,000 (about $175,000) for it.
Although the bank is only considering €120,000 (about $130,000).
I know it’s hard to assess much from a distance and with limited information, but we are facing the decision whether to buy the house and then continue renting out the apartments.
The problem is that the entire building is quite old, and it seems inevitable that some renovations will be necessary over time.
Would you go for it?
Interest rates are extremely low right now, so the time for buying would be favorable.
Is it realistic to cover the entire financing through the rental income, or is that too risky?
We don’t want to put much equity in, so the plan would be to fully finance it and then effectively pay off the loan through the rental income...
You’re probably going to tell me right away to stay away from it...
But I would still appreciate any opinions.
Regards,
Egon
after receiving such great help here in the forum regarding my question about cancellation periods, I’m coming back with another situation.
Maybe there are experts here who can help me make a decision on this topic as well.
Here’s the deal:
On our neighboring property, there is an old house, estimated to have been built around 1900, with a thatched roof, and the plot is about 800 square meters (8600 square feet).
The house belongs to my mother-in-law.
Currently, there are two rental units in the house; one is vacant at the moment, and the other is rented out.
Now the property is up for sale because the money is needed.
The construction company said that renovating for personal use is not worthwhile; demolition and rebuilding would be cheaper.
A real estate agent apparently came to appraise the property—I’m not entirely sure, but he suggested they might get around €160,000 (about $175,000) for it.
Although the bank is only considering €120,000 (about $130,000).
I know it’s hard to assess much from a distance and with limited information, but we are facing the decision whether to buy the house and then continue renting out the apartments.
The problem is that the entire building is quite old, and it seems inevitable that some renovations will be necessary over time.
Would you go for it?
Interest rates are extremely low right now, so the time for buying would be favorable.
Is it realistic to cover the entire financing through the rental income, or is that too risky?
We don’t want to put much equity in, so the plan would be to fully finance it and then effectively pay off the loan through the rental income...
You’re probably going to tell me right away to stay away from it...
But I would still appreciate any opinions.
Regards,
Egon
Tassimat schrieb:
I would calculate the maximum amount based on the expected rental income and all the related factors.I meant in comparison to a new build.S
SuperEgon12 Sep 2019 08:22hampshire schrieb:
Renting out a building with deferred maintenance only makes sense if you do not intend to keep the property – for example, due to new construction or selling a building plot.That would definitely be a building with deferred maintenance... the current tenants don’t mind much, they are quite undemanding as well...hampshire schrieb:
Anyone knowledgeable about renovation and with a reliable network of tradespeople and helpers can find some real bargains. You don’t seem to be a professional, and that is your risk. What else could anyone advise here besides hiring an expert?It’s true that I’m not a professional... However, I could do some of the work myself, depending on what is necessary...
But most likely in this case, we won’t be able to avoid consulting an expert or other specialists...
Still, thanks for your assessments
DIY work is difficult to carry out in rented apartments. If something major needs to be done, it has to be done quickly, or during the weekdays when you are at your regular job.
The situation is better when renovating an empty apartment. Longer vacancy versus contractor costs, which are also treated very differently for tax purposes compared to owner-occupied property.
The situation is better when renovating an empty apartment. Longer vacancy versus contractor costs, which are also treated very differently for tax purposes compared to owner-occupied property.
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