Evaluate apartment building in under 5 minutes

Let’s start with a case that could happen to you today:

Imagine an acquaintance sitting next to you in a café and saying: “Someone here in the street wants to sell an apartment building, I knew the old lady, her son is now looking after it. I’ll ask about it for you.” A day later, you receive the figures on WhatsApp: 240,000 euros annual rent, purchase price is said to be 8.5 million, A-location. Sounds exciting – but is it really a good deal?

The important thing is that you only need two figures – the purchase price (PP) and the annual net cold rent (ANR). Once you have these, you can immediately calculate the purchase price factor and the yield. Both are the most important key figures for recognizing whether an investment makes sense or not.

Another tip: Whether you’re looking for a return on investment or a purchase price factor, use my free real estate calculator on Immobilien Guru.

Stream here for free – the fastest real estate valuation in the world

Calculate purchase price factor and yield

Example:

• Purchase price: € 8,500,000
• JNKM: € 240,000

Now you can get started right away:

Purchase price factor = purchase price / JNKM = 8,500,000 / 240,000 = 35.4

A purchase price factor of 35 means that it takes over 35 years to recoup the purchase price through rental income – without costs, without interest, without risk. Far too long.

How much return are you making?

You can also see this immediately:

Yield = JNKM / purchase price = 240,000 / 8,500,000 = 2.8 %

Sounds okay at first – but is it really?

The magic limit: 5.5% or more – applies at current interest rates of 3.5%

If you work with borrowed capital – and almost everyone does – you have to take the current interest rates into account. Let’s assume you get 3.5% interest. Then realistically add around 2% for maintenance and reserves. That makes a total of 5.5 %.

So you only earn from a return of over 5.5 %

With a return of only 2.8%, you are making a loss month after month – despite rental income.

How much should you pay at most?

Here’s the trick: simply reverse the formula. You want at least 6% return? Then:

Purchase price = JNKM / desired return Purchase price = 240,000 / 0.06 = € 4,000,000

At a yield of 6%, the property should cost a maximum of €4 million. With an 8 % yield, it could even be as low as € 3 million.

Example: You want 8 %

Purchase price = 240,000 / 0.08 = € 3,000,000

Anything above that is not financially attractive – or you have to negotiate the purchase price down.

That’s all you need to remember in the first step, with a quick assessment from your smartphone or notebook! Are you getting an offer? Ask for the address, purchase price, JNKM (renovation status, rental status, …) – then you can evaluate quickly and the seller can sell their apartment building quickly.

Conclusion: “Only 2 numbers decide” – to put it simply

All you really need:

• The annual net cold rent (JNKM)
• The purchase price

Then compare that with the current financing costs and the 2% maintenance buffer. From a return of 5.5 %, you are in the black – anything less is a risk or a hobby.

Formula for your everyday life

Desired yield / JNKM = maximum purchase price

Keep this formula in mind – you’ll need it more often when you’re checking real estate offers. It will tell you in seconds whether a property is suitable or not. And even better: you can immediately make the seller a realistic offer.

Is 8.5 million a good deal?

I went into this in detail on immobilien-erfahrung.de, you can read about it again here: The difference between yield and investment properties.

The difference lies in the focus: with an investment property, what counts is what comes into your account each month – i.e. a positive cash flow from rental income, usually in B locations and C locations. With an investment property, on the other hand, you focus on long-term value appreciation and sales proceeds – usually in A-locations such as Berlin, Cologne, Düsseldorf & Co.

You want direct cash? The first option brings you income directly. Do you want more cash in the long term? The second requires patience, capital and market knowledge – in return, you can expect a big profit later on.

Even better:

If you buy cheaply in an A-location, all the better Cash flow + long-term cash = top class. Buy, upgrade, increase rent, increase value.

That’s it. This is how you evaluate extremely quickly. Good luck with your investment!

Your purchase price offer therefore always depends on your personal goals: Do you need / want operational or strategic cash.

What would this property with a net annual rent of 240,000 euros in an A-location be worth to you?

More tips from the field?

Do you want to regularly recognize good deals, make faster decisions or simply learn from my experience? Then browse through the blog or read the most important articles on the topics – step by step, from practice, for investors.

I have explained these topics to you in detail:

• Valuate apartment building
• Calculate purchase price factor
• Tip: My purchase price factor calculator
• Estimate returns correctly
• Financing with leverage

You want to sell or have questions? Then write to me – I’ll be happy to help you.

• Contact us now
• Purchase profile

Sell real estate quickly: Uncomplicated and profitable

Selling a property successfuly as quickly as possible is harder than you think. There are many things to consider and many mistakes that can be made. So you should inform yourself about the processes from the beginning and be sure that you do everything right. Made easier, this process will only be easier for you if you have the right expertise and the right support on the subject.

• You have time? Read our guide to selling a house here

Procedure: How to sell your house

A smooth sales process is the be-all and end-all. Many different steps are necessary to sell a house profitably. For most people, it takes a lot of time to tackle them alone. An extensive specialized knowledge is needed, whose appropriation alone already takes much time.

In order to make the sale of your house as simple and above all as fast as possible, real estate experts help you with their knowledge and years of experience. The process can be fast and easy for the house owners and without having to invest a lot of time. Lay back and relax while real estate agents do the work for you.

Fast property sale: 3 frequently asked questions

We do not want to take up much of your time, so here are 3 specific questions that we are most frequently asked in consultation sessions.

How fast can you sell?

Question 1: How quickly can good real estate agents sell a property?

Every place, every condition varies the time. We can make you an offer for your property in Germany, in Hamburg, Berlin, Munich, Cologne, Düsseldorf, Frankfurt and for all other cities in the area of Germany, Austria and Switzerland.

In about 32% of our clients’ inquiries, we have a preliminary offer available the same day, within 24 hours. After closer examination and evaluation, the shortest duration is 72 hours. In addition, however, there are the usual procedures for the purchase contract and notary appointment. You will learn more about both of these in a moment.

Real estate agent with buyer pool or online portal ?

Question 2: Why should you hire a real estate agent for a quick house sale and not just sell online?

You should hire a real estate agent for quick house sales. If you want a guaranteed quick sale that is hassle-free and with no additional costs.

If you place your property on one of the usual online portals, there are no guarantees that it will actually sell – not even at your self-determined desired price.

Without a real estate agent (with contacts, off market buyer lists and investors in the background) your property could be offered on the open market for months without viewings, let alone offers.

For a quick, guaranteed cash sale, you will not get a better offer from Privat for a quick house sale – sell to professionals who want and are able to develop your property further.

In addition, we have a strict valuation process, which means that we always receive the most accurate valuation for each property.

Guaranteed fast sale ?

Question 3: How can you guarantee that I can sell my house to you quickly?

What distinguishes investor brokers from other companies is that we have our partners’ own money ready to buy your house. Our investor partners have been in the industry for over 25 years and together have hundreds of years of experience. This allows us to have a fast sales process and means that if necessary, we are able to complete a purchase in just seven days.

With an external team of legal experts and experienced professionals, the process is seamless from valuation to closing. You will be in regular, direct contact with a dedicated sales representative, so that you are always kept up to date and potential problems can be solved quickly.

Here are free guides for all common cases of selling:

• All tips: Sell a property
• Selling an apartment
• Selling a house
• Selling an apartment house
• Selling a plot of land
• Sell property: Heir
• Selling property: Divorce

Calculate property value: This is how experts proceed

What are the exact criteria for determining the value of a property and how exactly do experts proceed when preparing their expert opinion? In general, according to § 194 BauGB, the market value should reflect the price that would have been achieved in the normal business year at the time of the determination without consideration of unusual or personal circumstances. To determine this value, experts use various criteria:

Location of the properties

The location of the property includes the infrastructure of the nearby surroundings, such as transport connections, shopping facilities, but also connections to doctors or hospitals. On the other hand, trendy locations have an advantage, especially in large cities. The higher the popularity of the district, the higher the value of the property there.

Of course, it is particularly easy to sell real estate in the city centers and in the suburbs of popular urban areas.

Real estate prices: Germany comparison

Real estate prices:

• Berlin
• Düsseldorf
• Frankfurt
• Cologne
• Hamburg
• Hanover
• Munich
• Stuttgart

Standard floor value

The standard land value is probably the most important criterion for determining the market value, as it is the basis for its determination. The standard land value indicates the value for one square meter of undeveloped land in the respective standard land value zones.

Old pollution on the property

Contaminated sites on the property are of course not an advantage for the property, as they have to be taken over by the new owner. Such inherited burdens are noted in the land register and have a negative influence on the expert opinion, as more costs are incurred by potential buyers.

Tip! Do you want more detailed information on the subject of land sales? Read more here: Selling land.

Energetic condition

First of all, of course, the presentation of the energy certificate is required. This states how high the energy consumption is. The higher, the worse. In addition, the quality and newness of the insulation of the outer walls and the roof. These have a decisive influence on the energy consumption and the energy costs increase enormously with poor insulation. Our tip, if time is not pressing and you need to sell quickly: renovation for added value.

Building and technical condition of a property

The second important criterion is of course the condition of the property. This includes not only the materials used, such as building materials, pipes, conduits or electrical installations, but also the age of the property and the materials. In addition, extras such as an outdoor area, carports, gardens and garages can have a positive effect on the rating and confirm a positive evaluation.

Current market situation

The price of a property is always determined by supply and demand, which is why this criterion also plays an important role for the expert. Here, sales data from comparable properties in similar locations are used and compared with the data of the property to be examined.

The degree of development of the property

The degree of development is also important for the value of the property. This means that it must be checked whether the property is connected to important networks, such as the water system, the telephone network but also the electricity. Of course it is an advantage if the property is connected to all important networks.

Free tip? Yes!

All my tips in this guide are free of charge for you. As real estate brokers, we broker real estate from 1 million Euro sales value under the category luxury real estate. We give you here gladly Tipps and cheat for your sales, free of charge, in detail and step by step explained. Please also pay attention to our links, here you will find more detailed information on the individual topics. Should you wish to sell your property with us: Do you know what our unbeatable advantage is? We independently reach over 250,000 readers per month, which means 3 million people per year. We are independent from common real estate portals and reach a solvent, special target group. In addition, we offer internal buyer groups and investors in our Off Market area, to whom you have no access via usual offers. Read more here: Real Estate Agents.

Exposé: Present your house & market it

The right advertisement is the be-all and end-all for the self-marketing of a property. But other aspects must also be considered. If you approach a house sale without help, you should be prepared for a lot of time and self-organization. This process can only be made easier if you have the right expertise on the subject.

Display: Formulations, the pictures and the first impression

There’s nothing worse than your ad going under in the crowd. Short, sober descriptions bore potential buyers and are not very inviting. So make sure that the title is already written in a relaxed but serious way. You should use a language that is as rich in images as possible, which arouses emotions and thus attracts attention.

Think about the title that would make you stick to yourself.

Special advantages of your real estate can be emphasized by formulations, like ‘elegant old building with stucco’ or ‘sun-flooded south terrace’, because you appear inspired and invite the real estate-looking for directly. Try to attract the buyer already with the headline, so that he clicks further on your advertisement.

Pictures: Interior, property and details

But the most important factor are probably the pictures. A buyer naturally wants to see as much of the property as possible to get an idea of whether the object could be something for him.

In order to take great pictures of your property, there are a few things you need to consider. First of all, the rooms should be tidy and clean. You should definitely take the pictures in daylight so that the rooms can be seen very well and the buyers can estimate how much daylight falls into the rooms. Your cover picture should be the most meaningful and represent the best of the apartment.

The most beautiful room, the roof terrace, the open kitchen or maybe the bay window with a view. Pictures of all rooms and if available the garden/balcony/terrace, an exterior view and above all a floor plan should not be missing. The floor plan should never be missing, as it gives potential buyers an impression of the size of the individual rooms in relation to each other and allows them to see the layout of the rooms better.

This is how a professional works with real estate photos:

Text: Detailed description and advantages

Once the potential buyer is on your ad, two additional factors can convince him or her of the property. The ad text and your pictures. With your text you should explain important key data of the property as well as object criteria. These include

• Number of rooms
• District
• Balcony
• Built-in kitchen
• Floor- but also full bath
• Fellar rooms

Describe the location of the apartment, its advantages and also name the furnishings as precisely as possible. This includes kitchen equipment, heating systems but also other objects that will remain in the property. In this connection, mention the costs for the compensation payments for existing equipment and brokerage fees. Also important is information such as rent, additional costs and the size of the apartment in square meters.

The 5 most common mistakes in selling

Most home sellers are rather inexperienced in the field and do not know where to start. They often take a few pictures and put them on a real estate portal. However, the homeowners do not know what to expect, what you have to consider and what all is in store for you. To avoid this uncertainty, the most important thing before selling a house is to inform and seek help from experts in the field.

Realtor is excluded from the outset

Of course, it is also possible to successfuly complete a real estate sale without an estate agent. So before you decide for or against an estate agent, think about what makes the most sense for you in your situation. An estate agent can save you a lot of work and time when selling a property. He also advises you in financial and marketing matters. So ask yourself the questions:

• Can I coordinate the sale alone on the fast moving, regional and targeted real estate market?

You should be aware that selling a property requires a lot of time, organization and expertise. An estate agent will receive a commission for a successful sale, but this can be recorded in an estate agent contract. In addition, the real estate agent will take care of all the work for you, such as the correct advertising of the property, arranging and conducting viewing appointments, the preparation of sales contracts and the presence at the notary appointment. Thus, you have permanently someone competent with sufficient expertise at your side, who can advise you in all questions.

Exposee gives a wrong impression

The exposé is one of the most important factors in the successful sale of your property. The exposé is the first thing a potential customer sees and should therefore make the perfect first impression. A bad exposé can ruin even the most beautiful house.

What you should definitely pay attention to are good pictures. It helps to have them taken by a photographer, but even self-made pictures can look great. Make sure that the pictures are taken in daylight and that the room is clearly visible. In addition, it should be tidy and clean so that the potential buyer immediately feels comfortable and can imagine living there.

Take pictures of all rooms and preferably also the floor plan so that the buyers can get a clear picture of the property. Pictures of the garden or special features of the house will also look good. Be honest in the text of your exposé. Do not give the customer false hopes or exaggerate, because this will only lead to disappointment at the viewing appointment.

Real estate market value is unknown to you

Every homeowner still knows how much he paid for his house and how much renovation, refurbishment etc. cost. However, it often happens that the value of the property differs from the original purchase price, as property prices are determined by supply and demand.

So before you put your property up for sale, you should know the value of this knowledge. You can have the property value estimated by an appraiser or an estate agent and thus know better what range you can move in the price. Small defects in the house can reduce the value of the property and be a reason for potential buyers to lower the purchase price. So before selling, consider whether you can have small defects repaired beforehand and thus demand a higher sales price. However, experts or real estate agents can also help you with this decision and estimate whether such an investment is worthwhile.

You are unprepared for viewing appointments

Potential buyers are faced with the decision to make a large investment or not. So they want to play it safe and be 100% sure in their decision. So that you conclude the house sale successfuly, you should give potential buyers as much security as possible.

During an inspection appointment you should be prepared for many questions of the buyers and have a good answer to all of them. Often it concerns thereby the condition of the house:

1. How old are the windows / doors?
2. When was the last time renovated and refurbished?
3. What kind of insulation is there?
4. How much are the additional costs?
5. … and and and and and

Be prepared for all these questions and inform yourself about your house in detail right from the start. Ignorance can unsettle potential buyers or be an excuse to lower the price. Also be open to surveyors and understand that your buyers only want to play it safe.
As a seller, you naturally want to sell your property as profitably as possible. However, you are faced with a buyer who is happiest to make a profit in the end.

So don’t spoil your chances of buying a house by not being willing to negotiate, but meet your buyer halfway. There is only one thing that helps in negotiations: good preparation.

You should consider from the outset within which framework you can move and what is the absolute minimum for you. You should also have good arguments to justify your selling price. This includes, for example, a good infrastructure, the location of the house or special advantages of your property. An experienced real estate agent can also help you to prepare for a successful negotiation or even support you on site.

Stubbornness can be a major hindrance and can unnecessarily prolong negotiations. Approach each other and find a price that both parties are happy with.

Legal: notary, land register and purchase contract

A house sales is a large decision with that many legal procedures, contracts and conditions accompany. As owners of house one should inform oneself first of all well about it, which comes to one and which one must consider, so that one comes out profitably from the business. For ignorant ones in the area there are many legal bases to consider and above all small Stolperfallen, which one should absolutely avoid.

Notary: Monitoring of the sales contract

The duties of a notary public are to regulate the sale of real estate as an impartial legal entity in such a way that all parties are satisfied and all possible points of dispute are avoided or settled from front to back. The notary draws up a public deed (the purchase contract) in which all necessary legal issues are regulated in a transparent and unambiguous manner.

The notary also notarizes the real estate purchase contract:

§311b of the German Civil Code (BGB) stipulates in Germany that all legal contracts concerning land, property, estate and real estate require mandatory notarization.

Another task of notaries is to ensure the protection of both buyer and seller. For the legal protection of the buyer, the notary reserves the property for the buyer in the land register as a prior notice, so that the seller cannot sell the property to someone else at short notice. For the legal protection of the seller, the notary arranges the final transfer of the property in the land register as soon as the buyer has actually paid the purchase price.

Enforceable claims

Notaries additionally provide for immediately enforceable claims. This means that the claims stipulated in notarized contracts are immediately enforceable. In order to execute the claims, it is no longer necessary to take legal action at a court, but a bailiff can be appointed immediately. This takes place, for example, in the case of non-payment of the purchase price.

In addition, a notary public explains all unclarified legal questions in a real estate sale. He must explain all legal and juridical questions to all contracting parties in such a comprehensive, understandable and sufficient way that a documentary record of the actual will of both parties is possible. You are obliged to do so by virtue of your public office.
Should a notary strive for a different cost regulation, he is thus ineffective, as this is legally prohibited. This applies to both cost reduction and cost increase.

Purchase agreement in real estate trade

How can a purchase contract be concluded? When does a purchase contract exist? And what must be included in a sales contract?

The purchase contract is the legal basis on which a house sale is built. Depending on the case, a sales contract always looks different, contains more or less regulations, depending on what the parties have agreed.

A sales contract is a complex and extensive contract, which contains many legal ambiguities and also traps for one or the other. The implementation can also take some time.

Sell fast? Sometimes it takes up to 8 weeks from the signing of the contract at the notary to the transfer of ownership in the land register.

This non-simultaneity between the transfer of the purchase price, the change of ownership and thus the change of use and encumbrance and the final change of ownership and the handover raises further legal questions in the sale of a house, which must be regulated in detail in the purchase contract.

Checklist: 14 points in the sales contract

Just to the question: What must all be included in a sales contract?

The most important points which should be regulated in every sales contract are as follows:

1. Which object of purchase is being sold ?
2. Who sells to whom?
3. What is sold with everything? (fitted kitchen, property,…)
4. How is it sold?
5. How is the payment done? (cash, bank transfer, …)
6. When is the transfer date?
7. What is the distribution of the incidental and maintenance costs?
8. How are the development costs regulated?
9. Are there possible warranty claims?
10. What is the state of the object?
11. Does the object have defects?
12. Which permits are available and which ones are missing?
13. Allocation of costs
14. Authorization of the notary’s office

All the facts – alimony in separation and divorce

Separation maintenance is payable for the period between separation and divorce. However, the payment of separation maintenance is subject to certain conditions. Moreover, separation maintenance is not calculated automatically, but must be applied for separately. But when is there a claim to separation maintenance? How much is it? And what about maintenance after the divorce?

The most important at a glance:

• In order to claim separation maintenance, a number of requirements must be met. The spouses must live separately from each other and one of the two must be needy and the other must be able to perform.
• Separation maintenance is calculated according to the adjusted net income of the spouses. This is calculated with reference to many different financial factors
• Separation maintenance is generally payable for the period from separation to divorce and is intended to ensure a similar standard of living for both partners even after separation.
• Even if the separation maintenance ceases after the divorce, the maintenance obligation does not also end automatically. Post-marital maintenance must be applied for again separately after the divorce.

When is there a claim to separation maintenance?

As long as a marriage exists, the spouses are also responsible for each other, even if they live separately. This refers especially to the financial aspect, as this changes significantly for both partners after a separation. Generally speaking, the person who cannot support themselves is entitled to separation maintenance, but this only applies if the other partner earns enough money to be able to pay maintenance at all. However, these rules are subject to certain conditions.

Living apart from each other

A prerequisite for receiving separation maintenance is that both partners live separately from each other. This is possible both in separate dwellings and in the same dwelling. The decisive factor is that both partners run a separate household from each other. Things such as shopping or eating meals together are therefore done separately from each other. When separating, it is also important to record the exact date, both for determining the separation year and for other legal consequences of the separation. A document signed by both partners with the date and content of the separation is therefore helpful for taking further legal steps.

The neediness of a partner

The partner who demands separation maintenance must be needy according to the law. There are no fixed framework conditions for this principle. The decisive factor is the income of both spouses that was achieved during the marriage. The aim is that the person entitled to maintenance should be able to maintain a similar standard of living during the separation as before the separation. This arrangement is particularly important for spouses where one of them has not worked during the marriage and has no income of his or her own.

The performance of the partner

In order for the person entitled to maintenance to be able to claim maintenance at all, the partner must be able to pay. This means that the partner must be able to pay maintenance without jeopardising his or her own reasonable livelihood. The paying partner must have a deductible after deducting the maintenance. If this is less than 1,200 euros per month or if the paying partner only receives unemployment benefit I or II, he or she does not usually have to pay separation maintenance.

If all these conditions are met, one of the spouses is entitled to separation maintenance. However, this must be applied for and is not automatically paid to the spouse in need.

• In order to claim separation maintenance, a number of conditions must be met
• The spouses must live separately and one of the two must be indigent and the other must be able to pay.

How is separation maintenance calculated?

In general, each spouse is entitled to half of the total disposable income, but the working spouse receives a kind of employment bonus amounting to one seventh of the income. The maintenance claim therefore amounts to three sevenths of the adjusted net income of the spouse according to the Düsseldorf table. However, this calculation is only applied if the maintenance recipient does not generate any income of his or her own. However, if the recipient of maintenance is gainfully employed himself, the maintenance amounts to three sevenths of the difference between the two adjusted net incomes. If both partners work, the maintenance claim is lower.

However, the law does not provide a uniform rule for calculating the adjusted net income on which the amount of separation maintenance is based. In determining this income, the family courts are guided by guidelines issued by the competent higher regional court. To determine this, a large number of factors are usually added together and an average monthly income is calculated from this for the time during the marriage. Here, not only the income plays a role, but also factors such as back taxes, income from renting or leasing and Christmas and holiday bonuses.

• The separation maintenance is calculated according to the adjusted net income of the spouses
• Adjusted net income is calculated with reference to many different financial factors

How long is there entitlement to separation maintenance?

Separation maintenance is generally calculated from the time of separation until the divorce. How long the separation lasts is not important. In certain cases, however, the obligation to pay maintenance can also end earlier. For example, if the spouse entitled to maintenance earns enough money himself or herself and is no longer dependent on maintenance, if the spouse entitled to maintenance lives permanently with a new partner or if the spouse entitled to maintenance has committed a serious criminal offence against the other. In these cases, it always depends on the individual situation.

• Separation maintenance is generally payable for the period from separation to divorce
• Separation maintenance is intended to guarantee both partners a similar standard of living even after separation

Maintenance after divorce – spousal maintenance and separation maintenance

The right to separation maintenance expires with the divorce, but this does not mean that the obligation to pay maintenance ends. After the divorce, maintenance can still be claimed, namely post-marital spousal maintenance. This is usually even the same amount, unless the income situation has changed with the divorce. However, it should be noted that post-marital spousal maintenance must also be applied for separately and is not paid automatically, even if separation maintenance was previously paid!

• Even if the separation maintenance ceases after the divorce, the obligation to pay maintenance does not end automatically.
• Post-marital maintenance must be applied for again separately after divorce

Divorce: guide, help and tips

Divorce is complex, it’s true. But you are not alone! Many let themselves separate and in fact, a large part always finds a good solution. Only a small part ends in a quarrel. So that you can prepare well, you will find here our small guides and tips on divorce, family, money and real estate.

• Divorce: Guide