ᐅ Renting out an old house or selling it and buying a condominium/apartment
Created on: 24 May 2021 13:02
S
Sine_bati
Hello 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.
Sine_bati schrieb:
and I imagine 900 euros cold rent plus additional costs, which are certainly higher than for a newer house (high electricity and heating costs).Whether that is a reasonable rent, we can’t judge because we don’t know the local rent index. But if you want to rent out a property in need of renovation or even damp, or rather neglected, then you have to drastically lower the rent. The rent reflects the value of the apartment or house. Based on your rosy description, even the city wouldn’t rent that apartment out to low-income people or immigrants/asylum seekers...Sine_bati schrieb:
since it is uninsulated, meaning, among other things, you can’t place cabinets too close to the walls, you have to heat sufficiently to avoid mold risk, plus it needs renovation (wallpaper, floors). The heating system itself is new, but here and there there are issues you need to watch out for.Let me put it this way: either you invest to have a properly rentable apartment, or you sell the plot.Then I found your question... it seems you don’t know what to do with all that money?
That’s straightforward:
Sine_bati schrieb:
We are currently building a houseSine_bati schrieb:
But I’m not the type for stocks nor for renting out properties,Sine_bati schrieb:
And how would you invest the money then?Extra mortgage repayment!
S
Sine_bati28 May 2021 23:13Thank you for the detailed assessment. However, I realize that the situation is quite complex and depends on many different factors. Perhaps I did not explain it thoroughly enough.
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