ᐅ Valuation of Existing Property

Hmm, yes, exactly, that’s what I mean. The asking price will probably be significantly higher than these 24 annual cold rents (even the current properties cost much more than that, although here they are not built or bought as investment properties in the usual sense, and there aren’t many rental houses like single-family homes). I wonder if I might risk losing capital if we want to move again later. It’s residential space in a convenient location, decent, but I don’t think anyone dreams of this house. It was built with other properties about ten years ago and was initially offered unsuccessfully. But I realize this is difficult to discuss, as there’s probably no law or guarantee. Thanks anyway.

Greenie schrieb:

It would be frustrating if another interested buyer offers 5,000 more than the maximum we set as our limit.

Greenie schrieb:

But I don’t think anyone dreams of this house.

Then play the game. But don’t be upset afterward.
If you already have other properties, for example through a building transfer (BT), it is easier to accept if you’re not the winner. However, be aware that with a BT price there are usually many additional costs.
You can’t just gamble here; you need to know the entire local market.
In spring: sale of a bungalow built on a leasehold, constructed by the deceased owner using Ytong blocks by himself. The tiling clearly shows the self-build, outside everything is unfinished, no driveway, no garden, no terrace. Energy efficiency is questionable. Impossible floor plan. The kitchen had to be removed due to pest infestation. The builder was over 60 years old (a self-builder over 6 years). It was sold within a week. And don’t believe there was any haggling or bargaining involved.

Is the house vacant or rented? If rented, then use number 24. Otherwise, the return on investment will not be accurate. If vacant, then close to the new construction price.

The value can also be calculated the other way around: land value per square meter * area + €1500/m² (approximately $165 per sq ft) * living area. Additional costs for the basement, garage, and other features can be discussed further, but a 10-year-old property is move-in ready for many people with minimal renovation, so I would estimate €2000/m² (about $220 per sq ft) as a starting point.

What data do you have on your end?

Nordlys schrieb:

For investment properties, it is said that the realistic price equals about 24 times the annual cold rent.

That was true back in the last millennium. In reasonable locations (not in major cities, where it can go up to 100 times—for example, Munich) it’s more like 30 to 35 times.

Greenie schrieb:

The asking price will probably be significantly higher than those 24 times the annual cold rent.

For single-family houses or condominiums, you can’t really calculate using factors. For example, I have a rented apartment from the 1960s in an average location in the Ruhr area—the factor there is already above 20 times. It doesn’t really say anything.

Greenie schrieb:

I wonder if I’m risking burning capital if we want to move again later.

You can only answer that in hindsight. It’s the same with purchase prices as with loan interest rates. You’re always wiser looking back.

You don’t seem to really believe in the house; otherwise, you wouldn’t be worrying so much.

Set your pain threshold, get financing approval from the bank, and make an offer including the approval. They will either accept it or not. I wouldn’t stress about it. You have nothing to lose, especially since it’s not the absolute dream house.