ᐅ Renting out an old house or selling it and buying a condominium/apartment
Created on: 24 May 2021 13:02
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Sine_batiS
Sine_bati24 May 2021 13:02Hello dear forum members,
We are currently building a house, and the financing is secured. I own an older single-family house in the Rhein Main area that is fully paid off, where we have registered a land charge of 100,000 euros to get a better interest rate.
The plan was to rent out the old house, which is generally possible since there is demand. It has 100 sqm (1,076 sq ft), and I am thinking of 900 euros (about $980) rent excluding utilities, which are likely higher than for a newer house (due to high electricity and heating costs).
However, I have concerns about renting it out because it is uninsulated, meaning, among other things, you are not allowed to place cabinets too close to the walls, and you have to heat it sufficiently to avoid mold risk. Also, it needs renovation (wallpaper, floors). The heating system itself is new, but there are certain specific issues to watch out for. I am also worried that if I want to sell the old house in 10 years, it might be more difficult because I may not be able to get the tenants to leave or because I cannot properly assess the condition of the house, and so on.
Now I am considering selling the house since prices are currently very high and using the money to buy one or two small new-build apartments (price per sqm about 4,800 euros (approx. $5,300)) to rent out. Possibly, in 10 years, if interest rates rise significantly, I could sell one apartment again to pay off part of the loan for our newly built house.
What would you do? Would you rather rent out the old house or sell it and invest in new-build apartments, and then register the land charge for the new house here? Thanks in advance.
We are currently building a house, and the financing is secured. I own an older single-family house in the Rhein Main area that is fully paid off, where we have registered a land charge of 100,000 euros to get a better interest rate.
The plan was to rent out the old house, which is generally possible since there is demand. It has 100 sqm (1,076 sq ft), and I am thinking of 900 euros (about $980) rent excluding utilities, which are likely higher than for a newer house (due to high electricity and heating costs).
However, I have concerns about renting it out because it is uninsulated, meaning, among other things, you are not allowed to place cabinets too close to the walls, and you have to heat it sufficiently to avoid mold risk. Also, it needs renovation (wallpaper, floors). The heating system itself is new, but there are certain specific issues to watch out for. I am also worried that if I want to sell the old house in 10 years, it might be more difficult because I may not be able to get the tenants to leave or because I cannot properly assess the condition of the house, and so on.
Now I am considering selling the house since prices are currently very high and using the money to buy one or two small new-build apartments (price per sqm about 4,800 euros (approx. $5,300)) to rent out. Possibly, in 10 years, if interest rates rise significantly, I could sell one apartment again to pay off part of the loan for our newly built house.
What would you do? Would you rather rent out the old house or sell it and invest in new-build apartments, and then register the land charge for the new house here? Thanks in advance.
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Sine_bati24 May 2021 19:20caspar.1 schrieb:
We sold our old house because repairs are bound to come up eventually, and those cost money, plus you still have to pay tax on the rent 😉 Right now, you can get a good price for a house 😉Thanks. And what did you do with the money? Did you use it directly to pay down the mortgage on the new house?Sine_bati schrieb:
Thank you. And what did you do with the money? Did you use it directly to pay off the new house?Yes, that way I only had to borrow a small amount, and now I pay the same amount every month for 10 years. After 10 years, I will have fully repaid it 🙂H
hanghaus200025 May 2021 18:49Has the loan agreement for the new house already been signed? If so, remember to consider the prepayment penalty. I would also recommend trying to sell the old house for the best possible price instead of renting it out. Are you still living in the old house?
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Sine_bati25 May 2021 21:14Yes, the loan has already been signed. I don’t want to pay off the loan for the new house right now. The interest rate is good, and it was fixed for only 10 years.
I also don’t plan to fully repay the loan in 10 years. However, I’m not the type for stocks, nor am I interested in rental properties, but I have to do something. So the idea was to buy an apartment, preferably a newly built one, to keep things low stress...
I also don’t plan to fully repay the loan in 10 years. However, I’m not the type for stocks, nor am I interested in rental properties, but I have to do something. So the idea was to buy an apartment, preferably a newly built one, to keep things low stress...