Social and post-bonding: Definition & Explanation

What does social binding mean? A social commitment is a price commitment of the property. In order to support low-income citizens, the state thus offers social housing.

Important: If you want to rent here, you need a certificate of eligibility for housing.

This is favored by the promotion of public funds, such as low-interest loans and grants from public authorities. If you want to buy a property with a social commitment, you are bound to it until the public loans and grants have been repaid. If everything has then been paid off, it takes another 10 years until the social binding officially ends – also called: Nachbindung.

Maximum rent: cost rent & rent increase

How much rent can you expect as a landlord of a property with social commitment? In order to ensure affordable housing, only a “cost rent” is charged here. For this, only the running costs of the property are taken into account, such as the financing costs and the public building loan. A rent increase may then only take place every 3 years. After the end of the additional commitment period, you can then adjust the rent to the current rental prices.

These factors are taken into account in the cost rent:

• Current costs
• Financing costs
• Public building loans

Summary: What is a social bond?

So here are the most important points summarized at a glance:

• Financing through public funds
• Renting to low-income persons through housing entitlement certificate
• Post-commitment period ends 10 years after full repayment of public loans
• Maximum rent is limited by cost rent

Invest in a property with a social commitment

Now that we have clarified what a property with a social commitment is, the question naturally arises: Is it worthwhile at all to invest in such a property as an owner-occupier and capital investor? Let’s take a closer look at the two cases:

Buy property with social commitment for personal use

As already mentioned, only people who have a housing entitlement certificate due to their low income can move into a property with a social commitment. This also applies to owner-occupancy. So if you as a buyer earn only a low salary, the purchase of a property with social binding for owner-occupancy is quite possible. However, if you earn too much, you will need to apply for an extra exemption. This can also lead to increased incidental purchase costs, as you will have to pay a shortfall occupancy tax.

The most important summarized:

• Only for low-income buyers
• If salary is too high: apply for an exemption and pay a shortfall levy.

Real estate with social commitment as capital investment

If you invest in a property with a social obligation as a capital investment, you must always expect a shortfall. Real estate with a social commitment is therefore only really interesting as an investment for capital investors if the low return is reflected in a favorable purchase price and your goal is tax-free capital appreciation.

Conclusion: Should you buy a property with social binding?

As an investor, an investment in a property as a social commitment is therefore only worthwhile if the focus is on tax-free appreciation without time pressure. Whereas owner-occupiers benefit above all if they themselves have a residential entitlement certificate.

You can find even more tips about real estate with social binding here:

• Social obligation: Real estate, social housing, obligation, rent control and deadlines (external).

First apartment / first house: Learn for free

My thought behind the website? The entire buying process, on one page, in detail, with tips and insider tips. Not just one page with the typical 1, 2, 3 processes.

Learn completely free, 24 hours, 7 days a week online. With important calculations, of course, calculations and formulas, as well as their calculation paths, checklists but also valuable experience and mistakes.

If you have any additional questions, you can always write to me and my team on the website. We will then include these additional questions in our Q&A and.

This means that with every question you ask, our platform gets better! From the preparation on the real estate purchase, to the purchase price negotiation, to subsequent rental, if you buy your property as an investment.

• Real Estate Experience.com

Old real estate: apartment & house from older decades

Over 2,650,000 properties in Germany were built before the year 1919. And some time later in the middle of the century, there were even almost 7,500,000 houses! Of course, construction technology was different back then. But as the decades passed, the building industry rapidly learned and not only resorted to more efficient building materials, but also focused on the topics of sound and heat insulation, as well as fire protection.

Here is a brief overview:

• Built before 1919: 2,655,042
• 1919 – 1949 Built: 2,374,762
• 1950 – 1979 Built: 7,357,255
• 1980 – 1989 Built: 2,090,142
• 1990 – 1999 built: 2.490.829
• 2000 – 2011 built: 1.954.588

Each decade brought different advantages and disadvantages. Do you want to invest in a condominium built in 1940? Or buy an apartment building built in 1967 as an investment? Before we go into the different defects, here in advance the advantages and disadvantages of such an older existing property:

Existing property: advantages and disadvantages summarized

If you want to invest in an income property, then an existing property from older decades has very clear advantages: The purchase price is low and the rental yield is high. The ancillary purchase costs and the equity capital to be invested are also kept within reasonable limits. At the same time, maintenance costs are comparatively high.

Older existing properties in B and C locations make excellent yield properties!

Here again summarized, the advantages and disadvantages.

Advantage of buying an old property:

• Mostly more favorable purchase price
• Costs are calculable if you are aware of the defects
• Lower purchase price often ensures better return on investment
• Location in grown infrastructure

Disadvantage of buying an old property:

• High costs for maintenance and repairs
• Possible hidden defects

So what distinguishes the properties of different construction years from each other? And what are the respective defects you should expect? So let’s start chronologically – with properties older than 120 years.

Real estate with year of construction 1900

Cracks in the masonry are typical for older properties built before 1900. Due to the outdated construction technology of that time, thermal insulation is either non-existent or inadequate. The windows are usually single-glazed, letting the cold into the house in winter, while moisture accumulates in the attic and basement rooms. And some deficiencies can be found in the bathrooms as well: Lead pipes, which have not been permitted since 1971, can often be found here and usually need to be urgently replaced after purchase.

Typical for 120+ year old properties: energy sufficiency was not an issue back then!

Defects of real estate before 1900

Here is a brief overview:

• Cracks in plaster and masonry
• Lack of thermal insulation on the facade, roof and windows
• Damp basement
• Outdated technology and electronics
• Outdated clay and lead pipes in the bathroom

Real estate with year of construction 1900 – 1939

Similar defects can also be found in properties built between 1900 and 1939. A lack of underlayment lets cold and damp into the house, wooden beam ceilings are plagued by sponge infestation and the walls, which are often constructed far too thinly, are prone to mold. Not only the ceiling is made of wood, but also the stairs – an enormous fire risk!

Characteristic: In the past, no attention was paid to fire protection during construction!

Checklist: Defects of real estate around 1900 – 1939

All shortcomings briefly summarized at a glance:

• Missing underlays
• Condensation problems
• Sponge and mold infestation
• Hardly any fire protection available
• Obsolete clay and lead pipes
• Cracks in the masonry

Real estate with year of construction 1939 – 1945

Typical for real estate built between the years 1939 and 1945 is the poor building fabric. During the war, raw materials, time and energy were put into the war. Building was therefore fast and cost-saving, which is why both building fabric and the statics of some properties suffered. Unsuitable building materials were also used, such as building rubble and summer wood.

Checklist: Defects of real estate around 1939 – 1945

Typical deficiencies include:

• Poor building fabric
• Pest infestation due to wrong building material
• Static problems
• Cracks in the masonry
• Obsolete gas pipes
• Hardly any fire protection

Real estate with year of construction 1945 – 1959

Above all, poor or missing thermal insulation is often found in properties built between 1945 and 1959. Building materials that are now considered questionable were also often used. These include asbestos, tar, formaldehyde paint and lead paint. Still an issue: the lack of fire protection. After the war, houses had to be built quickly and efficiently. As a result, there is usually a lack of access for the fire department, and fire doors are also almost non-existent. Soundproofing was also not considered at the time, which is why old apartments from this period are often very bright.

Checklist: Defects of real estate around 1945 – 1959

Characteristic of real estate from the period are:

• Use of questionable building materials
• Lack of fire protection
• Lack of soundproofing
• Lack of thermal insulation
• Leaking gas pipes
• Cracks in the masonry

Real estate with year of construction 1960 – 1969

In the second half of the 20th century, the construction method improved. Wood was no longer used for stairs and ceiling. Instead, stone and concrete were now used and the windows were insulated with aluminum. Drains prevented moisture from causing mold in the basement and attic, and underlayment was installed. From now on, emphasis was placed on thermal insulation, but harmful substances continued to be used for this purpose.

Checklist: Defects of real estate around 1960 – 1969

Here is a brief overview:

• Building materials of concern
• Insulation harmful to health
• Concrete damage
• Uninsulated roof trusses

Real estate with year of construction 1970 – 1979

In the 1970s, building technology once again improves immensely. The newly adopted requirements for sound insulation lead to more efficient construction. Lead pipes are no longer laid, but copper water pipes, and construction is mainly done with concrete. Despite improved building materials, cold penetrates the living spaces in winter and leads to mold.

Checklist: Defects of real estate around 1970 – 1979

Typical deficiencies include:

• Parquet adhesive containing tar
• In need of renovation
• Concrete as a building material

Real estate with year of construction 1980 – 1999

Properties built in the last 30 to 40 years are usually characterized by their modern construction technology. Nevertheless, some deficiencies can be found here as well. The costs for maintenance are high, the roof connections are broken and the central heating before 1985 often leads to problems.

Checklist: Defects of real estate around 1980 – 1999

Here again the typical defects from 1980 – 1999:

• Connections and terminations for flat roof
• Central heating
• Expensive maintenance

Conclusion: Should you invest in old real estate?

Admittedly: Compared to new buildings of the modern age, properties from older construction years have their very own charm. And depending on the year of construction, they bring their own advantages and disadvantages, and with a little capital, even building services, roof and masonry can be renewed.

You can now find even more about the respective defects by year of construction on my new project for real estate buyers (Immobilien-Erfahrung.de):

• Year of construction property: defects and condition (external)

New! Specifically for Real Estate Buyers

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Jetzt auf Immobilien-Erfahrung.de

Buy an apartment, buy a house, own use or investment, return or investment property? On my new project Immobilien-Erfahrung.de you will now find everything you need to know for a successful real estate purchase! Learn everything about objectives in real estate purchasing, location types (A-, B- and C-locations), types of real estate, their returns and more! All online and free! What you must definitely pay attention to before your apartment search. Now on Immobilien-Erfahrung.de:

• Criteria for Buying an Apartment

Checklist: Criteria for Your Real Estate Investment

With our 11-point checklist, you are well prepared for your real estate purchase:

Real Estate as an Investment vs. Personal Use

At the beginning, the question is clear: Do you want to live in your property yourself? Or do you want to rent out your apartment as a rental property after the purchase? You should think about this at the beginning. After all, this affects not only the financing. As an owner-occupier, you are still responsible for the operating costs after acquiring the property. However, if it is a Real Estate as an Investment, these costs are mainly covered by the tenant and the tax office.

• Own use or investment? Comparison

Price of purchase: Factors

Equally important is that you set a maximum purchase price for yourself. Here you should take several factors into account. These include your creditworthiness, available equity, as well as your loan-to-value ratio.

Find out more about the important factors including tips and tricks here:

• Maximum purchase price

Maximum Gross Rental Yield: Formula

How high must the rental yield be at a minimum for the investment to be profitable and paid off by the tenant? For this, we recommend the following formula:

Formula: Annual rent / purchase price * 100

Investors pursue a primary goal, efficient wealth building. Accordingly, the gross rental yield of a yield property must be high. Learn more here:

• Minimum Gross Rental Yield

Rent out or buy vacant?

Of course, you can buy an already rented property just as easily as an unrented one. However, if you are purchasing the property for personal use, an unrented property would definitely be more advantageous. If there are already tenants in the apartment, you can terminate the lease for personal use after purchasing the property. Something similar applies to investors. On the one hand, you save time by not having to search for new tenants, but you are simultaneously bound to the rent. So, should you buy a rented or unrented property? Find out all the advantages and disadvantages here:

• Rented vs unrented

Location, location, location!

Not only the city is important, but also the neighborhood. Where is the nearest hospital? How is the connectivity? Are there a lot of vacant properties in the surrounding area? And how safe is the residential area? All of this affects not only your local living experience, but also the value of the property and the purchase price. What exactly does A-, B-, and C-location mean? How is it determined and how does it affect the purchase price? Find out more here!

• A-, B-, C-location

The perfect location

Depending on whether you are looking for a property as an investment or for personal use, the requirements for the location also differ. What are good locations for your personal investment goals?

• Find a location

New construction or existing property?

Both new construction and existing properties have their respective advantages and disadvantages. Here, the question is particularly important: Are you using your real estate for personal use? Or as an investment? After all, the use of your real estate also influences your decision. The differences between existing properties and new construction, as well as the respective advantages and disadvantages, can be found here:

• Existing property or new construction?

Age of the real estate: Advantages & disadvantages

Over 2.650.000 real estates currently located in Germany were built before 1919. Alone 5.000.000 of them before 1949. Some of these properties are real bargains on the market, whose later selling price can be significantly increased through value-enhancing measures. But what advantages and disadvantages does the purchase of an older property bring with it? Here is a direct comparison:

• Defects according to construction years

Size of House and Apartment

How big should the property be? In addition to the location and age of a property, its size also plays an important role. One-room apartment or villa with several bedrooms? Bungalow with basement or rather a duplex apartment? Here, both living area for personal use and for investment are compared. Especially for investors who plan to rent out their acquired property, the room layout and number of square meters are crucial.

• Optimal size of a property

Heritage lease? Yes or no

In some real estate properties, an inheritance lease is in place. But what exactly is an inheritance lease? Can the costs be deducted for tax purposes or even passed on to the tenant? Learn everything about the inheritance lease here, how it works and its advantages and disadvantages:

• Inheritance lease

Social binding? Yes or no

In addition to the inheritance lease, you may also come across the topic of social binding. Everything about your obligations regarding subsidized loans up to the binding period – is it worth it for you to buy a property with social and binding conditions?

• Yes or no? Social binding

Annual General Meeting – The decision-making body

The Annual General Meeting acts as the decision-making body of a stock corporation. It represents the legislative body of the company and is intended to relieve the members of the supervisory board and the management board of their duties. The general meeting consists of the shareholders of an AG and is usually convened once a year.

More on the other bodies of a public limited company:

• Board of directors
• Board of directors

Duties of the Annual General Meeting – Auditor, appropriation of profits & Co.

It decides which shareholders are appointed to the supervisory board and also elects the auditor(s) for the annual financial statements. The general meeting is the only body of an AG that may decide on the appropriation of the balance sheet profit and can be influenced by proposals from the members of the management board and the supervisory board. Another important task of the general meeting: It passes resolutions on essential issues – for example, with regard to capital increases or reductions, possible mergers or dissolutions, sales, takeovers or acquisitions…. insofar as these result in an amendment to the Articles of Association.

Overview of the tasks of the Annual General Meeting:

• Discharge of the Management Board & the Supervisory Board
• Election of the Supervisory Board members representing the shareholders
• Election of the auditor
• Decision on the appropriation of profits
• Decisions on matters concerning amendments to the Articles of Association

The members of the general meeting are automatically provided with participation in the formation process of the stock corporation. In contrast to the management board and supervisory board, they are not bound to fixed terms of office, but are allowed to hold office until they leave the company. Each shareholder receives votes in proportion to his profit shares. The shareholder is granted one vote per share.

AG: foundation, legal form, special case real estate

1. Stock corporation (AG)
2. Real estate stock corporation (REIT-AG)
3. Real estate company

Stock corporation (AG): Formation, liability, legal form & Co.

Aktiengesellschaft (AG) – The stock corporation is a German legal form founded by at least one person and organized by different bodies. Instead of a managing director, the company is managed by a board of directors consisting of at least one person. As the name already indicates, this legal form of a company primarily stands for stock trading. You would like to start a company alone or together with other people and learn more about company law forms in advance? Then you’ve come to the right place!

• Stock corporation (AG)

Real estate stock corporation (REIT-AG)

Real estate stock corporation / REIT-AG – You don’t find the idea of a stock corporation bad at all and are now wondering how you can combine your capital company with the real estate industry? A real estate company is a company that serves the financing, development, realization, leasing, or marketing of real estate – starting with a single property up to a real estate portfolio in the three or multi-digit range. The management of real estate property or third-party real estate on behalf of third parties can also be handled by a real estate company.

• Real estate stock corporation (REIT-AG)

Real Estate GmbH & Asset Management GmbH

Alternative – In this article you will learn the basics about real estate companies. Briefly explained, a real estate company is a company that has the purpose of leasing, developing, financing, realizing and/or marketing. It doesn’t matter if it is one or more properties. The management of residential and commercial real estate – in its own interest or as a service offered to third parties – is also a popular focus for real estate companies and asset management GmbHs. Find out more about the main advantages and disadvantages of buying real estate and the expected costs.

• Real estate company

The Right Words for the Expression of Sympathy: Speech to Wreath Choice

Finding the right words is very difficult, especially in a bereavement. No matter whether it is a funeral card, the inscription of a wreath ribbon or a funeral speech. The words should be chosen tactfully and carefully to pay the deceased the necessary honor. For those who find the choice of words difficult, we offer support and give some examples and tips for the appropriate words as a funeral service.

Pay Attention to the Level of Relationship to the Deceased

In order to find the right words and gestures in the case of bereavement, one should first of all be clear about the relationship one had with the deceased. It may well make a difference whether the basis of the expression of mourning was a rather business or clearly personal relationship. For example, surviving relatives do not expect profound thoughts when expressing sympathy if the deceased and the mourner had a purely business relationship. In this case, the standardized phrases (“With great dismay…”, “Deeply saddened I was…” etc.) may be used in the card text without any problems.

More demanding and also accompanied by the corresponding expectations of the relatives are condolences based on a previously very personal relationship with the deceased. For both sides – the immediate family of the deceased and the conductors – memories of shared experiences play a major role and influence the content and form of what is said.

But it can also be a great help for the conductor to find the right words and to fall back on the personal relationship with the deceased. The beginning of the conversation with the bereaved, even a speech or written condolences can help us to remember these personal encounters. Often, the right words and thoughts arise from these encounters, even without “outside” help.

The Introduction – Mourning and Salutation

And yet: It is often the moment of mourning that is the hardest. A funeral oration can be started well with a tactful funeral proclamation, condolence or condolences. Sayings of this kind deal with the topic of mourning, death, parting or loss. They are always empathetic and encourage reflection and contemplation.

For the entrance into a mourning procession it is however quite alright to begin with an important sentence or thought of the deceased, which remained in good memory to the conducting person. In this way, a personal bridge is immediately built between the deceased, the immediate bereaved and the speaker.

In the context of the later following personal words of condolence reference can be made to this saying. Afterwards follows the address of the mourning family. If there is a personal relationship to them, they should be adressed directly with their first name. More details: inheritance guide. Some formulations, which are well suitable as salutation, are for example love mourning family, love mourners, love family Mayer, …

The Words of Condolence – Personal Stories and Words of Condolence

After the salutation, the words of condolence should follow directly. Here the topic death can be adressed directly, but also personal memories of the deceased can be mentioned. Together experienced moments, small stories or anecdotes about the life of the deceased or simply the deep expression of grief. It is important to show the mourning family that the loss was also very painful for you, but that the memories, love and experiences are much stronger than death. Make sure to remain tactful and choose your formulations wisely. It helps to make some notes about the content of the speech before you start.

Stay True to Yourself

Many people are tempted to pretend to be sadder, more pious, more affected by expressions of sympathy than they really are. The reason for this attitude is often that the person conducting the conduction believes that a certain mourning attitude is expected of him. But the opposite is the case: whoever has not presented himself as a particularly spiritual person in his previous relationship with the deceased and the bereaved should not suddenly appear “more papal than the pope” in his words of condolence.

The basic rule is: Even in the event of a bereavement and with condolences, remain authentic. The person conducting the condolence should remain true to himself and his kind. Thus, a person who is fundamentally fun-loving and who has always met the deceased with humor and lightness may also take this attitude when expressing his or her condolences. Provided that one is really serious about this lightness. As a rule, people can sense very well whether their counterpart is really serious – even in the case of bereavement.

Grave and Wreath Ribbon – the Right Choice of Words

In the event of a bereavement, it is common for close family members, relatives and good friends to buy a wreath in memory of the deceased. For this purpose it is not only necessary to choose the flowers and the optical picture, but also to choose an inscription of the wreath bow. It can be both sayings, which come particularly from the heart but also a sensitive last greeting. Examples are words like ‘We will never forget you! – Yours …’ or ‘In silent remembrance’.

Mourning – Ideas and Suggestions for your Speech

So that you are not alone in writing the funeral proclamation, we have put together some ideas and suggestions for your funeral speech to help you find your bearings. Every funeral oration should contain something personal, which is why we recommend supplementing our ideas and suggestions with personal anecdotes or stories.

Beginning the Eulogy

• Dear Family XY,
• Dear Mrs. XY,
• We express our deepest sympathy for the death of your husband.
• I am deeply saddened and express my sincere condolences to you and your family on the death of your dear mother…
• We have prayed, trembled and hoped with you. But now we quietly mourn with you.
• We still cannot believe that your brother has left us forever…
• It hurts me a lot to lose a good friend…
• It is so unspeakably difficult to find suitable and comforting words.
• I would like to express my sincere condolences to you for the heavy loss through the death of your wife…
• It is so painful to lose a loved one so suddenly.
• We share with you the painful loss that you have suffered through the death of …
• We are all very saddened by the tragic loss of your beloved brother. Our sincere condolences as well as much strength for the difficult hours of mourning and farewell.

The Words of Condolence

• We will keep her in best memory and continue her life’s work in her spirit…
• Deeply touched, I would like to express my deepest sympathy to you.
• All who knew her were impressed by her charisma and her helpfulness…
• May the pain of death not overwhelm you and may the memory of our time together give you enough strength for the future.
• He was my best friend, I will never forget him…
• I wish you, supported by your children and grandchildren, to find enough strength to master the further path of life.
• We loved her very much, and her cheerful nature was always an example for us…
• I wish you a lot of strength and mutual love during this time
• Many people will remember her with gratitude and love…
• I hope that your grief will soon become a loving memory.

Sadness Quotes

Johann Wolfgang von Goethe

It is a distance that was, that we come from. It is a distance that will be that we go to.

The following quotation is also from Johann Wolfgang von Goethe. Absolutely true words, which anyone who has ever mourned can understand.

What you have deep in your heart,
one cannot lose by death.

Franz Kafka

You can see the sun slowly setting and yet get a fright when it is suddenly dark.

Ernest Hemingway

Only a few people are really alive and those who are never die. It does not count that they are no longer there. No one you really love is ever dead.

Dalai Lama

Inner happiness is not dependent on material circumstances. It is rooted in our mind

Confucius

All worldly things are only a dream in spring. Think of death as a homecoming.

Theodor Fontane

Still it will be! And as the deep peace
a quiet contraction now went through,
there it may be that isolated
the earth soul flew upwards.

Thomas Mann

The bonds of love are not cut with death.

William Shakespeare

We are such stuff as dreams are made on, and our little life is rounded with a sleep