These 5 factors determine the value of the apartment building

Tip in advance, I recommend my guide:

• Valuate apartment building

Decisive for the value are:

1. Real estate location (macro and micro location)
2. Property and defects (condition)
3. Types of use
4. Tenants and rental agreements
5. Potential

Quickly explained:

Real estate location: Berlin, Wuppertal or a village in the country?

Location is known to be a decisive factor in real estate valuation. Both the macro-location (regional and city-wide factors such as economic situation, infrastructure and development prospects) and the micro-location (immediate surroundings of the property, neighborhood, access to public transport) are taken into account.

Here is a quick offer check on ImmoScout24:

• Rudow, Berlin – 1,149,000 € / for 355 m² living space – A-location
• Oberbarmen, Wuppertal – 629.000 € / for 456 m² living space – B-location
• Wusterhausen/Dosse (Brandenburg) – € 128,000 for 305 m² living space – C-location

Berlin and Wusterhausen are ~ 100 km apart, the purchase price differs by a factor of ~ 10. The location has this major effect on the property value.

Want to learn more? Read my guide here:

• Real estate location

Condition of the property

The condition of the apartment building plays a key role in the valuation. Aspects such as year of construction, building fabric, need for renovation and modernization as well as energy efficiency are taken into account. A well-maintained and modernized building can have a higher value than an older property in need of renovation.

More on years of construction and defects:

• Property and defects

Types of use

The various possible uses of the apartment building also influence its value. Is it a purely residential property or are there also commercial units? Are there potential development opportunities, e.g. through conversion or extension?

Tenants and rental agreements

The quality of the tenants and the long-term stability of the rental agreements are decisive factors for the value of an apartment building. A stable tenant mix and long-term rental agreements can increase the attractiveness of the property and thus increase its value.

Potential of the apartment building / surroundings

Finally, the potential of the apartment building is taken into account. This includes possible increases in value through planned developments in the surrounding area, through modernization measures or by optimizing rental income.

Overall, determining the value of an apartment building is a complex task that requires a comprehensive analysis of various factors. A professional valuation by a surveyor or real estate expert may therefore be advisable in order to determine the realistic market value of the property.

If you would like further information on the subject of multi-family house valuation or require professional support, I will be happy to assist you. Write to me without obligation: Contact.

A little reminder, I recommend my guide:

• Valuate apartment building

Quick answer: What to consider for tax-free sale?

A note in advance: The speculation period of 10 years is predominantly relevant for multi-family houses, as 99.9% of multi-family houses are rented out. “Owner-occupied” is possible in the context of an apartment building if you are not renting it out. Let’s say you buy a vacant or multi-family house in Berlin today, wait 3 years and then take the profits from the property price increase.

Whether it’s a rental property or real estate in general, you can sell tax-free:

1. Speculation tax: sell tax-free
2. 3 objects rule in Berlin
3. Commercial property: Value added tax

Speculation tax: sell tax-free

The speculation period explained more quickly:

• Owner-occupied = 3 years
• Rented = 10 years

If you sell within the speculation period, you must – simply put – pay tax on the profits as normal, just like income from work, regardless of whether you are employed or self-employed. After the period has expired, the sale is tax-free. If you want to do a quick calculation, use my free speculation period calculator.

If you sell within the speculation period, you must – simply put – pay tax on the profits as normal, just like income from work, regardless of whether you are employed or self-employed. As a single person, this would typically mean a top tax rate of 42%.

Sale within the speculation period as a private individual

Let us consider the sale within the speculation period (< 10 years) as a private individual:

• Purchase 2024 = 2,100,000 euros
• Sale in 2033 = 4,100,000 euros
• Taxable profit = 2,000,000 euros
• At 42 % (single person) = 840,000 euros

Sale within the speculation period as a company

A look at the sale within the speculation period (< 10 years) as a company:

• Purchase 2024 = 2,100,000 euros
• Sale in 2033 = 4,100,000 euros
• Taxable profit Berlin approx. 19.1 % (trade tax 4.1 %, corporation tax 15 %) = EUR 2,000,000
• At 19.1 % = 382,000 euros

Sale after the speculation period

Sale after the speculation period (> 10 years / or > 3 years for owner-occupation):

• Purchase 2024 = 2,100,000 euros
• Sale in 2034 = 4,100,000 euros
• Taxable profit = 2,000,000 euros
• Tax free

But you can’t buy 10 properties now, wait 3 years and take the profits from property appreciation, because:

3 Objects Rule: Commercial trade

There is also the 3-property rule. If you sell more than 3 properties in 5 years, it is commercial real estate trading.

When selling real estate, the “3-object rule” refers to the fact that private individuals in Germany can sell up to three properties within a five-year period tax-free. If a person sells more than three properties within this period, this is considered commercial real estate trading and is subject to income tax – even if they are not rented out but are owner-occupied.

After 10 years of holding, however, the sale is always tax-free.

Commercial property: Value added tax

When selling a commercially used property that is subject to VAT and is rented out, the seller must correct the input tax deduction. If the new owner continues to let the property, no refund of input tax will be granted.

1. Commercial properties subject to VAT require an input tax adjustment on sale
2. The continuation of the rental does not affect the input tax refund for the seller

Sell apartment building & tax

Do you want to sell your apartment building and find out more about possible taxes? Then I recommend my two guides:

• Selling an apartment building
• Selling an apartment building: Taxes

Little time, read here how you can help her:

• Sell apartment building quickly

Selling an apartment building in Hamburg: step by step

Let’s start with the most frequently asked question: How much is your apartment building in Hamburg actually worth? Then you will learn about all the steps of the sales process, right up to handing over the keys.

Determine the value of your apartment building

The value of your apartment building depends on various factors, including the property location, the size of the apartments and the condition of the property. An informed, market-oriented purchase price is crucial for a successful sale.

How to value an apartment building

The valuation of an apartment building is based on specific methods such as the comparative value method, the asset value method and the capitalized earnings value method. A combination of these methods provides a realistic market value.

At least two of these methods are usually used to determine an exact value.

• Valuate apartment building
• Typical evaluation procedures
• Free evaluation by experts

Selling in Hamburg: What to look out for?

When selling your apartment building in Hamburg, you should consider a few important aspects:

1. Location and property prices: The target group of buyers depends heavily on the location and current property prices.
2. Documents: Make sure that you have prepared all relevant documents such as floor plans, land register excerpts and tenant lists.
3. Good contacts or an estate agent: An experienced estate agent can help you to organize the sales process efficiently and to approach the right buyers.

Location and property prices: The buyer target group in Hamburg

Hamburg is a sought-after real estate market with high property prices. Whether Altona-Altstadt, Altona-Nord, Altona-Altstadt, Eimsbüttel, Hoheluft-West, Eppendorf, Rotherbaum, Sternschanze, St. Pauli or Harvestehude. The target group of potential buyers is looking for long-term investments and is prepared to pay corresponding prices.

You need to reach people who focus on long-term investments and do not need immediate cash flow.

Documents: Floor plans, land register excerpt, tenant lists, etc.

Before you start the sales process, make sure you have all the necessary documents for the property sale ready. This includes, among other things:

1. Land register extract
2. Parcel map
3. Building plans and building permits
4. Refurbishment status
5. Tenancy agreements and tenant list
6. Operating cost statements
7. Energy certificate
8. Status report or expert opinion

Good contacts or a good broker

As apartment buildings in Hamburg often fetch high prices, it is advisable to consult an experienced estate agent. An estate agent has the necessary contacts and can help you to approach the right buyers and achieve the best possible price.

Ultimately, it is always a personal question as to whether you want to sell with or without an estate agent.

Taxes when selling in Hamburg: What will you have to pay?

A quick look at the tax aspects of selling your apartment building in Hamburg:

1. Speculation tax: Sale within the speculation period is subject to tax.
2. 3-object rule in Hamburg.
3. Asset & share deals: differences in taxation depending on the sales structure.

Speculation tax: selling tax-free?

The speculation period is generally 10 years for rented properties. If you sell within this period, you must pay tax on the profits. After the period has expired, the sale is tax-free.

Further details on the 3-property rule and asset deals vs. share deals can be found in our article here.

Real estate & tax coaching

Do you need further support with the sale of your apartment building in Hamburg? We offer real estate and tax coaching by experts and investors. Contact us for more information:

• Real estate coaching
• Real estate tax coaching
• Contact us

Also discover our resources for real estate beginners:

• Real estate beginners

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Selling an apartment building in Wuppertal: step by step

Let’s start with the basic question: How much is your apartment building in Wuppertal worth? Find out everything about the individual steps of the sales process, from the valuation to handing over the keys.

Determine the value of your apartment building

The value of your property depends on various factors, including the location, the size of the apartments and the condition of the apartment building. A realistic selling price is crucial to attracting potential buyers and successfuly completing the sale.

How to value an apartment building

The valuation of an apartment building is carried out using various methods such as the comparative value method, the asset value method and the income capitalization method. A thorough valuation, taking into account all relevant factors, is essential in order to correctly assess the value of the property.

As a rule, at least two of these methods are combined to determine a realistic market value.

• Valuate apartment building
• Typical evaluation procedures
• Free evaluation by experts

Selling in Wuppertal: What should you look out for?

There are some important aspects to consider when selling your apartment building in Wuppertal:

1. Location and property prices: Demand for real estate in Wuppertal is high, which has an impact on land prices. The location of the apartment building therefore plays a decisive role.
2. Documents: Make sure you have prepared all relevant documents such as floor plans, land register excerpts and tenant lists to make the sales process run smoothly.
3. Good contacts or an estate agent: An experienced estate agent can help you approach potential buyers and organize the sales process efficiently.

Location and property prices: The buyer target group in Wuppertal

Wuppertal offers attractive residential locations and a high quality of life, which attracts many potential buyers. The target buyer group is often investors who are looking for long-term returns and are prepared to pay corresponding prices.

You need to appeal to potential buyers who want to make long-term investments and are not just looking for short-term returns.

Documents: Floor plans, land register excerpt, tenant lists, etc.

Before you start the sales process, make sure you have prepared all the necessary documents for the property sale. This includes, among other things:

1. Land register extract
2. Parcel map
3. Building plans and building permits
4. Refurbishment status
5. Tenancy agreements and tenant list
6. Operating cost statements
7. Energy certificate
8. Status report or expert opinion

Good contacts or a good broker

As the real estate market in Wuppertal is very dynamic, it is advisable to use an experienced estate agent. An estate agent has the necessary contacts and resources to approach potential buyers and speed up the sales process.

Taxes when selling in Wuppertal: What do you need to consider?

When selling your apartment building in Wuppertal, you need to consider various tax aspects:

1. Speculation tax: Check the speculation period to enable tax-free sales.
2. The 3-object rule in Wuppertal.
3. Differences between asset deals and share deals and their impact on taxation.

Speculation tax: selling tax-free?

The speculation period is generally 10 years for rented properties. If you sell within this period, you must pay tax on the profits. After the period has expired, the sale is tax-free.

Further details on the 3-property rule and asset deals vs. share deals can be found in our article here.

Selling an apartment building in Frankfurt am Main: Step by step

Let’s start with the fundamental question: How much is your apartment building in Frankfurt actually worth? In Frankfurt, location (A-/B-/C-location), rental level compared to the rental index, preservation regulations, and tenant structure determine the factor. Here you will learn all the steps from market value to handover of the keys, with Frankfurt market data and tax specifics in Hessen.

Do you want to sell your rental property in Frankfurt? We offer ✓ Free property valuation ✓ Off-market buyer network ✓ Personal consultation ➔ Request now: Contact us

Frankfurt Market Overview: Factors, Returns, Prices

Frankfurt is one of the most expensive locations in Germany. The gross initial return varies depending on the location between 2.8% and 4.5%. Overview of typical multipliers on the annual net cold rent:

• A-location (Westend, Sachsenhausen-Nord, Nordend-West): Factor 26 – 32, approx. 7,500 – 11,000 €/m² living area
• B-location (Bornheim, Bockenheim, Ostend, Nordend-Ost): Factor 22 – 26, approx. 5,500 – 7,500 €/m²
• C-grade (Rödelheim, Bockenheim-Rand, Sachsenhausen-South, Riederwald): Factor 18 – 22, approx. 3,800 – 5,500 €/m²
• D-grade (Höchst, Sossenheim, Fechenheim, Griesheim): Factor 15 – 19, approx. 2,800 – 4,000 €/m²

Calculation example: MFH in Bornheim

A typical Frankfurt rental property for illustration:

• 8 residential units, 620 m² living area, renovated building year
• Annual net cold rent: 148,800 € (avg. 20 €/m²)
• Factor B-grade: 24x → market value approx. 3.57 million €
• Gross initial yield: 4.17 %
• Price per m²: approx. 5,760 €

If the rent is below the rent index (rent increase potential), investors often pay an additional premium factor of 1 to 3 points.

Determine the value of your multi-family house

The value of your property depends on various factors, including the location, the size of the apartments, the rental structure, and the condition of the building. Additional factors relevant to Frankfurt: Is the property located in a conservation area (Milieuschutz)? Does the city’s right of first refusal apply? What is the WEG capability (division into condominiums)?

How to evaluate an apartment building in Frankfurt

The evaluation is carried out using three classic methods:

• Income capitalization approach: Standard for rented apartment buildings. Calculation based on net income and land yield (currently 2.8 – 4.2% in Frankfurt).
• Comparison approach: Based on factors and €/m² of similar sales in the neighborhood. Very informative in Frankfurt due to the wealth of data.
• Cost approach: Only supplementary, as profit-oriented buyers dominate.

In practice, experts combine at least two methods. When it comes to Frankfurt Premium MFH, experienced appraisers weigh the income capitalization approach with 70 – 80 %.

• Apartment building appraisal
• Typical appraisal methods
• Free appraisal by experts

Questions? Appraisal, Sale, Lukinski

Stephan M. Czaja (Lukinski)

• Contact us

Guide: How to sell your rental house / income property

Use my checklist as an overview or click through the individual sales phases. All 18 steps in 3 phases:

Apartment building & prepare for sale – Phase 1

1. Financial planning and sale timing
2. Hire a real estate agent – if using a real estate agent
3. Documents and papers
4. Increase property value
5. Determine offer price for Frankfurt market
6. Create property exposé

Marketing and finding solvent buyers – Phase 2

7. Market the property
8. Contact with potential buyers
9. Filter and select potential buyers
10. Credit check
11. On-site viewing appointments
12. Sales conversation & price negotiation

Purchase contract and handover of keys – Phase 3

13. Drafting the purchase contract with a notary
14. Notary appointment in Frankfurt am Main
15. Land register entry and payment processing
16. Handover of the property
17. Notary fees & real estate agent commission
18. Taxes when selling a rental property in Frankfurt

Sell in Frankfurt: What to watch out for?

When selling your multi-family home in Frankfurt am Main, there are Frankfurt-specific aspects that differ from the national average:

1. Location and micro-location: Neighborhood factors vary from 15x to 32x.
2. Preservation ordinance & right of first refusal: Frankfurt has preservation protections in many districts, and the city can exercise the right of first refusal.
3. Rent control: Limits new rental prices, affects rating.
4. Buyer target group: International financial center = family offices, asset managers, foreign capital.
5. Hessian land transfer tax: 6.0%, one of the highest in Germany, affects buyer calculations.
6. Documents: Complete tenant lists, WALT, list of maintenance backlogs.
7. Off-market strategy: Premium multi-family homes in Frankfurt are largely traded without public marketing.

Buyer target groups in Frankfurt: Who buys what?

Frankfurt am Main is one of the most dynamic investment locations in Germany as an international financial center. Depending on volume and location, you will address different buyer types:

• Wealthy private investors (1 – 5 million €): Seek B-locations such as Bornheim, Bockenheim, Nordend-Ost. Hold long-term, factor-oriented.
• Family offices (3 – 20 million €): Prefer A-locations Westend, Sachsenhausen-Nord, Nordend-West. Capital preservation before return.
• Institutional buyers / Asset managers (from 10 million €): Portfolio purchases, often structured as share deals.
• Developers: Seek WEG-divisible properties or potential for expansion / densification. Pay a premium for development potential.
• International buyers (CH, AT, Asia, Middle East): Frankfurt = safe haven. Westend and inner city locations.
• Funds & pension funds: Only core assets, long WALT, new building stock.

You must target potential buyers who are looking to make long-term investments and are not just focused on short-term returns. Targeting the wrong type of buyer can cost up to 15% of the selling price.

Neighborhoods compared: Which buyer pays which factor?

Overview of the most important Frankfurt locations for MFH investments:

• Westend-South / Westend-North: Top location, factor 28 – 32, buyers: Family Offices, international investors
• Sachsenhausen-North (Old Sachsenhausen, Museumsufer): Factor 26 – 30, buyers: wealthy private investors
• Nordend-West: Popular residential area, factor 25 – 29
• Bornheim (Berger Straße): Trendy district, factor 23 – 26
• Bockenheim: Near the university, factor 21 – 25
• Ostend (EZB Quarter): Appreciation due to the ECB, factor 22 – 26
• Sachsenhausen-South: Factor 20 – 24
• Rödelheim: Factor 18 – 22, buyers: return-oriented investors
• Highest / Sossenheim: Factor 15 – 19, cash flow investors

Preservation Ordinances and Neighborhood Protection in Frankfurt

In several districts of Frankfurt, social preservation ordinances apply. Consequences for the sale:

• City has right of first refusal, buyer must submit a non-objection declaration
• Division into condominiums requires approval
• Modernizations are restricted
• Longer notary processes (right of first refusal period 3 months)
• Developers pay lower factors due to division restrictions

Documents: Floor plans, land register extract, tenant lists & Co.

Before you start the sales process, make sure you have all the necessary documents prepared:

1. Land register extract (not older than 3 months)
2. Parcel map / property map
3. Building plans, building permits, certificate of completion
4. Renovation status & modernization history
5. Rent agreements and tenant list with start date, cold rent, indexing

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