ᐅ Semi-detached house built in 2003 with land: What is a realistic price?
Created on: 4 Sep 2011 19:44
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elvsiett
We have found our house, now we just have to hope we actually get it...
Semi-detached house, built in 2003, at that time with land for €250,000, now they want to sell it to us and we are wondering: What price is realistic? Does a house lose value in such a short time? Or is the price higher today because it doesn’t need to be newly built but is ready to move in? How should we approach the price negotiation?!
Best regards
Semi-detached house, built in 2003, at that time with land for €250,000, now they want to sell it to us and we are wondering: What price is realistic? Does a house lose value in such a short time? Or is the price higher today because it doesn’t need to be newly built but is ready to move in? How should we approach the price negotiation?!
Best regards
Brombadegs schrieb:
But then pay rent and a loan? I hardly think many people can manage that.
At least a preliminary purchase agreement would certainly be appropriate, right?
Regards, BromiHello Bromi,
in this case, a rental agreement should definitely be arranged. I would only consider doing it rent-free for a few weeks at most...
It would also benefit the seller, as they would have the necessary funds directly available for the purchase of their new property without needing bridge financing.
But so far, it’s all just wishful thinking until further steps are taken...
Dear elvsiett, please share what your analyses have revealed!
Best regards
I am currently also searching and have come across two "rules of thumb":
1.) Depreciation: Commercial real estate investors calculate depreciation at about 1% to 2% per year. This forms the basis for reserves to cover future repairs and renovations (heating system, windows, roof, installations, etc.). For a house that has only ever been owner-occupied, I would estimate depreciation at 1.5%, meaning the house lost about 11% of its value between 2003 and 2011 (in euros of the year 2003). Interestingly, this almost matches the inflation rate (just under 13% from 2003 to 2010).
2.) Annual net rent and yield: Commercial real estate investors calculate the value of a property by multiplying the annual net rent by a factor of 10 to 14 for rural properties, 15 to 18 in towns and large cities, and up to 20 in metropolitan areas. For a relatively new house in the Stuttgart metropolitan area with S-Bahn (commuter train) access, the factor might be in the range of 15 to 18. This results in a value of 225,000 to 270,000 euros with a monthly net rent of, for example, 1,250 euros.
Owner-occupiers are often willing to pay more. However, in that case, the property should not be viewed as an investment but rather as a "luxury good" to improve quality of life.
1.) Depreciation: Commercial real estate investors calculate depreciation at about 1% to 2% per year. This forms the basis for reserves to cover future repairs and renovations (heating system, windows, roof, installations, etc.). For a house that has only ever been owner-occupied, I would estimate depreciation at 1.5%, meaning the house lost about 11% of its value between 2003 and 2011 (in euros of the year 2003). Interestingly, this almost matches the inflation rate (just under 13% from 2003 to 2010).
2.) Annual net rent and yield: Commercial real estate investors calculate the value of a property by multiplying the annual net rent by a factor of 10 to 14 for rural properties, 15 to 18 in towns and large cities, and up to 20 in metropolitan areas. For a relatively new house in the Stuttgart metropolitan area with S-Bahn (commuter train) access, the factor might be in the range of 15 to 18. This results in a value of 225,000 to 270,000 euros with a monthly net rent of, for example, 1,250 euros.
Owner-occupiers are often willing to pay more. However, in that case, the property should not be viewed as an investment but rather as a "luxury good" to improve quality of life.
Thanks in advance for your replies...
By good connection to Stuttgart, I meant that you can quickly get onto the B29 and be there in about 45 minutes, but there is no commuter train line (S-Bahn) reaching our area.
I’ve been following the prices online since I started looking for a house here in town, and I would say they could probably get around 260,000 for it—so in this case, I might set a good price at about 240,000, but I’m not certain, since I know the house and land prices here, but none of the comparable houses have been sold yet...
I’ll let you know as soon as we agree on a price—it might also be interesting for readers coming across this thread later.
Best regards
By good connection to Stuttgart, I meant that you can quickly get onto the B29 and be there in about 45 minutes, but there is no commuter train line (S-Bahn) reaching our area.
I’ve been following the prices online since I started looking for a house here in town, and I would say they could probably get around 260,000 for it—so in this case, I might set a good price at about 240,000, but I’m not certain, since I know the house and land prices here, but none of the comparable houses have been sold yet...
I’ll let you know as soon as we agree on a price—it might also be interesting for readers coming across this thread later.
Best regards