Hello everyone,
I am considering building a multi-family house on a plot of land I already own in a northern German regional center, with the intention of renting it out entirely afterwards.
Since I have no experience in house construction, I am thinking of having a developer build the house and appointing a building surveyor/architect to represent my interests. I do not want to create a personal statement or a landmark with this building, but it should be functional, durable, and as low-maintenance as possible.
Before approaching developers, I would like to create a minimal list of requirements so that the person I talk to can best tailor their approach to my needs (and so I save time). As mentioned, I would like to keep the building for the long term—maybe it can still help me enjoy my retirement in a few decades.
My question to you:
From your perspective, what are important aspects you would focus on, things that make sense, and so on?
To clarify what I mean, here is what I have come up with so far:
Solid construction
Fully brick-faced
KfW55 standard (and each residential unit as a separate entity for subsidy purposes)
...
Admittedly, this is still very little, so I would appreciate any contributions.
Klaus-Peter
I am considering building a multi-family house on a plot of land I already own in a northern German regional center, with the intention of renting it out entirely afterwards.
Since I have no experience in house construction, I am thinking of having a developer build the house and appointing a building surveyor/architect to represent my interests. I do not want to create a personal statement or a landmark with this building, but it should be functional, durable, and as low-maintenance as possible.
Before approaching developers, I would like to create a minimal list of requirements so that the person I talk to can best tailor their approach to my needs (and so I save time). As mentioned, I would like to keep the building for the long term—maybe it can still help me enjoy my retirement in a few decades.
My question to you:
From your perspective, what are important aspects you would focus on, things that make sense, and so on?
To clarify what I mean, here is what I have come up with so far:
Solid construction
Fully brick-faced
KfW55 standard (and each residential unit as a separate entity for subsidy purposes)
...
Admittedly, this is still very little, so I would appreciate any contributions.
Klaus-Peter
K
Klaus-Peter4 Jan 2016 15:28Of course, the overall return is what counts, but I do see a difference between building and immediately selling as condominiums versus holding long-term. In the first case, short-term return is the main focus; I don’t really care if the exterior façade needs repainting in, say, 5 years, since it won’t be mine anymore.
Furthermore, the property should still attract new tenants in 10 to 20 years. What ideas do you have about factors that might help with this?
I already asked a real estate agent, who said that, conservatively, you could expect a rental price of around €8.50 per square meter (about $8.80 per square foot) in this location, assuming the construction is not extremely cheap. The market here is currently so strong that as soon as a sign is put up announcing a multi-family building for rent, people flock to it.
Regarding apartment sizes, I’m currently thinking of 65–85 square meters (700–915 square feet) for 6 units (approximately 450 square meters / 4,840 square feet total). Smaller units tend to have higher tenant turnover, while larger units see a significant drop in price per square meter.
Furthermore, the property should still attract new tenants in 10 to 20 years. What ideas do you have about factors that might help with this?
I already asked a real estate agent, who said that, conservatively, you could expect a rental price of around €8.50 per square meter (about $8.80 per square foot) in this location, assuming the construction is not extremely cheap. The market here is currently so strong that as soon as a sign is put up announcing a multi-family building for rent, people flock to it.
Regarding apartment sizes, I’m currently thinking of 65–85 square meters (700–915 square feet) for 6 units (approximately 450 square meters / 4,840 square feet total). Smaller units tend to have higher tenant turnover, while larger units see a significant drop in price per square meter.
B
Bauexperte4 Jan 2016 16:38Hello,
The question of luxury accommodation only comes into play in areas that capital investors generally avoid… unless they own an exclusive piece of land.
Happy New Year!
MarcWen schrieb:A typical tenant usually doesn’t care whether they live in a brick-clad rental building or if it was built to KfW 55 standards or whatever. If that were the case, they probably would never move into a concrete block. What matters to them is solely the monthly rent and the incidental costs; even the location is often secondary as long as the transport connections are reasonably good.
Maybe it’s possible to achieve a higher monthly rent on the rental market by specifically advertising as a KfW-efficient house.
The question of luxury accommodation only comes into play in areas that capital investors generally avoid… unless they own an exclusive piece of land.
Happy New Year!
B
Bauexperte4 Jan 2016 16:40Klaus-Peter schrieb:
Regarding the apartment sizes, I am currently thinking about 65-85 m² (700-915 sq ft) for 6 units (a total of approximately 450 m² (4,840 sq ft)). Smaller sizes will likely increase turnover, while larger ones significantly lower the price per square meter.Don’t forget that you also need to make one floor accessible for people with disabilities 😉Happy New Year!
K
Klaus-Peter4 Jan 2016 17:10Bauexperte schrieb:
Don’t forget, you also have to make one floor accessible for people with disabilities 😉 Of course, that so-called accessible design effectively excludes every wheelchair user. I would rather call it age- or knee-friendly.
What I’m really interested in is whether my rental building has a brick veneer or not, because otherwise I will have to repaint it again after a number of years. I thought that had been made clear.
B
Bauexperte4 Jan 2016 17:40Hello,
Regards, Bauexperte
Klaus-Peter schrieb:This is a fairly simple calculation. How much does the brick veneer cost for the apartment building, and how much would repainting the facade after 15 years cost in comparison? Don't forget that a brick veneer facade also gets dirty.
I am interested in whether my rental building has a brick veneer or not, because otherwise I will have to have it repainted after x years. I thought this was clear.
Regards, Bauexperte
Speaking as a tenant (not sure if anyone here cares ;-) ... I don’t mind whether it’s brick or plaster as long as it looks neat – although, as someone from Northern Germany, I tend to associate brick with slightly higher quality.
I do care if the heating costs are 50 € or 100 € (euros), but I’m not concerned about whether it’s KFW200 or KFW20.
What really matters to me is soundproofing... I currently live in an apartment where I can hear my neighbor’s phone vibrating and the bathroom ventilation from the flat above.
Of course, I also care whether the rent without utilities is 550 € or 700 € (euros).
You mentioned there is a high demand for housing – wouldn’t it then make sense to target certain tenant groups? In your case, those willing to pay 700 € (euros) but who also expect solid construction quality?
Don’t cut corners on detailed planning and construction supervision.
I do care if the heating costs are 50 € or 100 € (euros), but I’m not concerned about whether it’s KFW200 or KFW20.
What really matters to me is soundproofing... I currently live in an apartment where I can hear my neighbor’s phone vibrating and the bathroom ventilation from the flat above.
Of course, I also care whether the rent without utilities is 550 € or 700 € (euros).
You mentioned there is a high demand for housing – wouldn’t it then make sense to target certain tenant groups? In your case, those willing to pay 700 € (euros) but who also expect solid construction quality?
Don’t cut corners on detailed planning and construction supervision.
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