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

Metropolises in Germany: Rating

Tip: Here you can also find large cities and towns. Click here to go back to the overview: Real Estate Lage | Lukinski Rating.

List: Attractiveness of location / metropolises

List of all 17 metropolitan areas (over 500,000 inhabitants), sorted alphabetically. You can take the exact rating to compare the column “Value”. The general rating can be found under “Grade”. “Short term” refers to the trend of the last 10 years, long term considers the last 30 years.

Germany Rating: Capital Investment Location Comparison

Current Lukinski Ratings:

Large cities (67) up to 500,000 inhabitants

Often more interesting than the metropolises, the numerous big cities in Germany. From east (Leipzig) to west (Bonn), north (Rostock) and south (Nuremberg). Here you will find good yield properties with A and B ratings.

• Rating: Large cities up to 500,000 inhabitants

Cities up to 100,000 inhabitants

Your advantage in cities between 40,000 to 100,000 inhabitants? You have less national and international competition. Especially if you live locally, a good strategic advantage, even for real estate newcomers. What’s your city’s rating? Find out here:

• Rating: Cities up to 100,000 inhabitants

A / A+ Ratings: Hidden Champions

A / A+ ratings means fairly secure performance. Perfect for investment properties with low yield but high, later resale value. At the same time a strong inflation protection. However, in metropolises like Munich, nothing for real estate beginners without sufficient equity.

• A / A+ ratings in Germany

B- / B / B+ Ratings

All B ratings show cities with solid development. Here you can also find yield properties that immediately provide income that covers your monthly burdens around repayment, interest and maintenance. Ideally with additional extra, for active asset accumulation.

• B- / B / B+ ratings in Germany

C- / C / C+ Ratings

All C ratings show cities with lower growth rates. Here, real estate as an investment should be treated with caution, because the vacancy risk is greater. This means that you pay more for every month in which your property is not rented out. In addition, the increase in value of the property is very low, to hardly available.

• C- / C / C+ ratings in Germany

D- / D Ratings: Risk Champions

D-rated cities have high risk, because their entire structure is extremely stagnant or even reduced. Economy, inhabitants, infrastructure, these are all indicators. D-Ratings are definitely not for beginners. Here you need not only experience, but also very good local knowledge to find the few, profitable properties. However, you will hardly ever experience an increase in value here.

• D- / D Ratings in Germany

Living in Cologne: Where is the best place to live in Cologne?

The media city of Cologne is young, urban and cool. The universities are popular throughout Germany and attract several thousand students to the city on the Rhine every year. Cologne’s property prices have also developed accordingly. Not only locations close to the city centre are popular, but especially the areas where you can escape the hustle and bustle of the big city for a moment.

Here is an overview of the most popular residential areas in Cologne:

• South Town
• Marienburg
• Rooster Forest

Cologne: Map & Location

In Cologne, time never stands still. This city of millions on the Rhine is bustling 24 hours a day. Neighbourhoods such as the Latin Quarter or the Belgian Quarter are lined with bars, trendy nightclubs and restaurants offering delicacies from all over the world. For those who like things a little quieter, one of the two green belts that surround the city is a quiet place to relax.

Once a year, the entire city is put into a state of emergency. During the carnival or carnival time you simply must have been in Cologne. The Kölsch flows in masses and the city is in an exuberant mood, as you usually only know in Munich during the Oktoberfest and the Cologne people are very proud of that!

Popular districts to live in: Südstadt, Marienburg & Hahnwald

Are you drawn to the great entertainment and media metropolis of Cologne? Whether it’s a quiet detached house in an idyllic residential area for family and children or a spacious loft close to the city centre, each of the districts has a unique and individual flair. More details in a moment, here first an overview:

Südstadt: Lively district in the heart of the city

Südstadt is not only the place to go for those looking for a central, lively living solution. There are mainly condominiums in the luxury sector here. Penthouse apartments and lofts are the easiest option here to grab a high-end property. If this is exactly what you are looking for, then check out the popular South City. The evenings here never get boring and the streets never sleep.

• Living in Südstadt

Marienburg: Green quarter near the Rhine

In Marienburg it’s already a bit quieter and the properties are all the bigger for it. You can find townhouses and villas in Marienburg, and close to the city centre. In addition, the streets and green spaces here invite you to stroll. Wide paths provide space for cars, give children a place to play and add to the flair of the neighborhood. The many well-kept green spaces and gardens also make Marienburg one of the most family-friendly areas of Cologne.

• Living in Marienburg

Hahnwald: Exclusive villa district on the outskirts of the city

If you are looking for real luxury real estate, you will find it in Hahnwald. Due to expansive property areas, the inhabitant density of Hahnwald is not particularly high. However, this also means that you are offered enough space and, above all, a great deal of discretion. Fences and high hedges offer privacy and allow private living away from the eyes of the curious.

• Living in Hahnwald

Südstadt: New and old town as an attractive residential area

Whether listening to music at the Eierplätzchen, sunbathing in the Volkspark or skating along the Rhine – in Südstadt there is always an option to pass the time. Cafés and restaurants invite you to feast and allow you to unwind. This is exactly why properties in Cologne’s Südstadt are so popular, because everyone wants to live here. If you are thinking of buying a property in Cologne, then take a closer look at Cologne Südstadt.

Südstadt: Map & Location

Young and urban, that’s how Südstadt can be described very briefly and succinctly. The tram stations Chlodwigstadt and Bonner Wall connect Südstadt with the rest of Cologne. Bonner Straße runs right through the middle of Südstadt and is lined with restaurants and cafés on both sides. If you are looking for a place to go out in the evening, this is the place to be. In addition, Südstadt has some top-class central living options to offer.

Sightseeing: Relaxed culture and student flair

Fans of street art and street music will find what they are looking for here, as will those who enjoy culinary delights. Students in particular can often be found in this district during the day, as the Technical University of the City of Cologne can also be found here. You don’t have to do without green spaces either, as the Friedenspark, located on the Rhine, offers picnic areas for the balmy summer evenings.

See the architecture and street scene for yourself here:

Marienburg: Luxury residential area on the southern edge

Those who like real luxury will find it in Marienburg. The villa area with a golf club and the banks of the Rhine is the absolute top residential location in Cologne. Those who have the necessary small change and are self-respecting will become part of the exclusive residents of this Cologne district. In addition to luxury villas, you will of course also find detached houses with gardens for sale here. If you are looking for a rich suburban feel in Cologne, you will definitely find it in Marienburg.

• Living in Marienburg

The average purchase price for a property in Marienburg is 4,500 – 6,000 €/m². Single-family homes, semi-detached houses and villas are particularly sought-after here.

Square metre prices: 4,500 – 6,000 €/m²

Marienburg: Map & Location

Marienburg is a residential area where people who want to settle permanently in Cologne particularly like to buy property. The reason for this is that despite its location close to the city, the district offers quiet streets and access to green spaces. Perfect for a relaxing walk after a stressful day at work! Schools, supermarkets and smaller restaurants form other advantages of this luxurious district. It only takes a few minutes to get from Marienburg to the city centre and be in the middle of the action.

Sightseeing: Architects’ Houses on the Rhine in Cologne

Especially people who are looking for a high-quality living solution will find what they are looking for in this upscale district. Villas and architects’ houses characterise the streetscape. Wide streets also provide parking spaces at the side of the road. Anyone looking for an exclusive property with a garden has the best chance of finding the ideal house in Marienburg.

Tip: Want to sell your property in Marienburg? Find out more here: Sell property in Marienburg

Take a look at the beautiful streets of the district here:

Hahnwald: Relaxed and luxurious living in an exclusive location

This district is definitely the underdog of Cologne. Due to its location just outside the city, Hahnwald is often forgotten. Unjustified, we think, because here are a few real treasures of the Cologne real estate market. The word is going around that Cologne’s celebrities also particularly like to settle here. With neighbours like Oliver Pocher, you know how exclusive the area is.

• Living in Hahnwald

The average purchase price for a property in Hahnwald is 1.5 – 3.6 million euros. But that is well worth it. After all, the properties here are among the most lucrative in the entire city.

Square metre prices: 4,800 – 9,000 €/m²

Hahnwald: Map & Location

The population density of Hahnwald is not particularly high. The reason for this is that the plots on offer come with a comfortable area that not only offers space for a luxury villa, but also room for a large garden with pond, fountain, terrace. Does this sound exactly like what you are looking for? Then feel free to take a closer look at the area and your potential new neighbor.

E

Visiting: High discretion and a lot of privacy

It is interesting to take a closer look at the residential area, because it quickly becomes clear that the residents of this Cologne district attach great importance to privacy.

View the exclusive streets themselves here:

Conclusion and comparison: Where is the capital investment worthwhile?

After we have introduced you to the most diverse residential districts of Cologne, which offer various possibilities in the area of home buying and capital investment, we would like to take a closer look at the characteristics of each district and, above all, how it compares to the others.

Südstadt offers what you expect from city life: Gastronomy, many shops and bright streets. Disadvantage can be the noise and in apartments the sometimes lack of privacy, but you are in the middle of the action.

Both Marienburg and Hahnwald offer much more peace and quiet. The way into the city can be longer, but here you have completely different, much more luxurious housing options and plots for the new construction of your dream property.

Whichever part of town you choose, contact your trusted real estate agent to help you find a property. He will advise you not only on the topics of real estate purchase, taxes and finances, but also on the topic of off market.

Cologne: Real estate in the media city on the Rhine

With over 1 million inhabitants, the media metropolis on the Rhine is one of the hubs in NRW, but also in Germany. Located in western Germany, the city borders other metropolitan areas such as Düsseldorf and Bonn. The media city is located directly on the Rhine and can be divided into different parts and districts. Neighbouring cities include Düsseldorf, Bonn and Leverkusen. Cologne stands for media, TV and press like no other city in Germany. That is why the metropolis on the Rhine is constantly growing. Südstadt, Altstadt, Ringe, Ehrenfeld or Sülz, where is the best place to live?

Real estate in Cologne

Hardly any other large city in Germany offers so much “room for improvement”. From the purchase price to the architecture of the existing property. Whether condominium, apartment building or luxurious loft with a view of the Rhine. Cologne has enjoyed steadily growing popularity for years. The most beautiful city on the Rhine really does have something to offer everyone. The stately old buildings in Südstadt and the famous area around Rheinauhafen are particularly impressive.

• Real Estate Cologne

Living in Cologne: Popular districts & residential areas

The media city on the Rhine offers a diverse cityscape, guaranteeing the perfect living solution for everyone. From luxury apartment to villa, there really is everything. With the help of the right real estate agent, you can undoubtedly find your dream property – whether Südstadt, Marienburg or Hahnwald – a property as an investment in Cologne always pays off! One of the largest universities in Germany ensures a young cityscape and gives the ‘Veedeln’ their inimitable freshness. Would you like to invest in a property as a capital investment in charming Cologne? Find out everything you need to know about the city’s most sought-after residential districts, including tips on location, prices per square metre & co! To the overview: Living in Cologne.

• South Town
• Marienburg
• Rooster Forest

House, apartment and land for sale in Cologne

Selling an apartment, an apartment building or your own property. The colourful media metropolis of Cologne has a lot to offer: While Marienburg and Rodenkirchen inspire with their proximity to the Rhine, Neustadt is bustling with big city life. Lindenthal, located to the west, convinces with its quiet atmosphere and those who prefer it exclusive and prominent settle in Hahnwald. You want to sell your property in Cologne? Everything about the selling process, the most important documents and whether you should sell privately or with an estate agent. To the overview: Selling real estate in Cologne.

• Old Town
• Marienburg
• Rodenkirchen
• Lindenthal
• New Town
• Rooster Forest

Sell land: drain

In all areas, the location is what counts most, not only when selling your developed or undeveloped property. With sale of an apartment, sale of a house but also when you sell your multi-family house, the location is a central valuation factor for the selling price of your property. Selling privately or “free of charge” and without an agent carries risks and makes the sale as well as the entire transaction (valuation until notary and contract of sale) prone to errors. Selling real estate needs a good network of buyers, often real estate is not presented publicly, but only internally as off market property.

When selling a property, similar questions arise as with a house sale. However, there are also some other points worth mentioning here. With a property it is to be paid attention to whether it concerns building land or building valuation land. In the latter case, the land must first be developed by the respective municipality. Only when there are connections for water, gas, electricity and sewerage, may construction work be done on the property. Building plots are usually more valuable than building land.

A professional exposé and meaningful pictures are the basis for selling a property. By listing the data and photos you establish the first contact to prospective buyers and lay the foundation for requests for viewings. If your description does not contain enough information or if the pictures leave questions unanswered, the interest will be lost or you will have to expect a large amount of individual questions.

Procedure in short form: Pictures until credit check

Another important point is the sales-related documents. Procuring them costs a lot of time, money and nerves. But without the important documents you cannot offer your property, so you cannot leave this part of the organizational tasks out. To simplify the sale and to offer your house with all relevant documents, it is worthwhile to engage an estate agent.

If your property attracts interest, potential clients will be waiting for a quick response and assume that you can be reached by phone and online.

With your assignment to real estate agents, you transfer all tasks from preparation to the sales phase to the conclusion of the contract to an expert who will take care of the brokerage of your property and who will find a suitable buyer for your property.

Foreword – Free tip? Yes!

All my tips in this guide are free of charge for you. As real estate agents we mediate properties starting from 1 million euro Verkerhswert, under the category luxury real estates. We are happy to give you tips and tricks for your sale, free of charge, explained in detail and step by step. 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 more than 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.

Sell land: Built-up & undeveloped

Just like the sale of a house, the value of the land is also determined. As a rule, the municipalities determine the so-called standard land values every two years, which have resulted from the sales of other plots of land. However, these standard land values are not binding for the sale. The location and transport connections of the land also play an important role in pricing. Building plots in sought-after residential areas achieve higher prices. Also those plots of land that are oriented to the south have a higher sales value. Then you have to find a buyer. Nowadays, this usually happens online.

Basic questions when selling

Before going deeper into the subject matter, laws and the like, we first deal with more general questions: How much tax is payable on the sale of real estate? What do you need to sell land? Is it possible to sell land without a notary? Is the sale of land taxable?

Let’s start with potential buyers or interested parties. In the end, they finally decide whether to refuse, accept or even outbid a purchase price.

Checklist: What do buyers want?

When searching for a suitable prospective customer, the following aspects can be taken into account:

• Type of land
• Use possibilities
• Plot size
• Inclination of the property >/li>
• Urban or rural location
• Transport connections

Use options: Building land, field or forest land

The nature of the property also determines its possible uses. Is it building land, agricultural land or forest land. The size of the land is usually given in square meters. In the case of large agricultural areas, hectare specifications are common. The slope of the land is meant by the gradient of the land. This is especially the case with slopes.

Plots of land located in cities offer different possibilities of use than plots of land in rural areas. This is especially true for the type of development. In addition, transport connections also play an important role. It is of primary importance mainly for building sites or commercial properties.

Arable land or built-up area in the city center:

Visualization: new construction project after sale.

Checklist: Prepare land sale

Selling a property in the hectic of everyday life is quite demanding: planning and thoughts as well as discussions, as you will see in the next two checklists for preparation in house selling.

Owner questions before the sale

Time expenditure, appointments, creditworthiness and inspection. As a real estate agent, you know how much work is involved in selling a property.

Here it is particularly about experience in real estate trade, in order to avoid risks and errors in the house sale in the apron.

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The company is also actively involved in marketing the land. The right platform must be found or not, keyword off market real estate. In addition there is the time planning for the sales, from preparation over advertisements, photos, portals, answering prospective customer inquiries, date arrangement for inspection, examination of the soil quality of the potenziellen buyers or investors, purchase price negotiations, sales contract, taxes and much more besides.

9 simple steps for selling a house:

1. How well do you personally know about the sale of houses?
2. Have you sold a house before?
3. Can you create a meaningful advertisement (online and print)?
4. How do you rate your negotiating skills in local pairings?
5. Would you like to let any unknown person into your property?
6. Do you want everyone to know about your sales intentions? Tip: Our Off Market Real Estate
7. Are you ready to deal with the legal requirements necessary for the sale of the house?
8. Are you willing to take over the time and work involved in marketing your house yourself?

Tip! Buyer network and investors

One reason why many decide to use a real estate agent is, besides risk minimization, the buyer network. Particularly with properties, we recommend that you market your property not only regionally!

Real estate investors are looking for interesting objects, including in particular plots in sought-after locations, but also in locations with development potential.

Negotiations will be more intensive, but the profit from the sale of your property can increase accordingly, worthwhile.

What is my property worth?

This question is at the very beginning. To publish an offer, you need a price for the land. But determining the offer price is not that easy. In addition to the basic material value of the property (if your property is developed), other factors are also included in the selling price.

The market value determination as the foundation of the sale

In this respect, a valuation is the focus and lays the foundation for a price that corresponds to the object, the storage-relevant information and the infrastructural embedding.

Based on the determined market value, you can rule out the possibility of overvaluing the property or advertising it at a price that is below the real value.

Due to the rising real estate prices, you should have the valuation carried out directly before the sale and refer to information on the market value that is not known to you and that dates back several years.

Smooth processing of the property sale

Your advertisement is published and generates interest. Now the sale of the property enters a phase in which perfect organization and scheduling become important. Viewings must be planned, timed with you and the prospective buyers, carried out and evaluated.

If an applicant expresses serious interest, the real estate agent checks his creditworthiness and obtains the self-disclosure including a confirmation of financing. By checking the financial background of potential buyers at an early stage, it can be ruled out that problems will arise shortly before the contract is signed.

Tip! Sell Off Market (not public)

Off Market means that your property sale will never be publicly visible. Your property will only be recommended to an internal, solvent group of buyers with an ideal constellation. Off market sales are especially claimed by prominent persons who want to keep the sale as well as address, photos and much more secret. Also private persons fall back on the service, for example if the family should not know anything about the upcoming sale or the neighbourhood. For such a discreet, off market sale you need a renowned real estate agent with a good network. Your advantage: Nobody will know about the sale.

• Sell Off Market

Valuation: Realistic prices increase the revenue

There are many questions to answer, the best answer is to have an expert at your side for the real estate valuation.

Which price is appropriate and realistic for your property, with or without real estate? If the purchase is not too long ago, the purchase price at that time can be a first indication. Comparable properties from the online offers of the regions can also provide a vague estimate.
If the value is too high, the property can “burn”, because it remains too long on the market and something seems to be wrong with the property.

Often the price is lowered, which means that the actual revenue potential of the land is lost – you are missing out on good money. This is also confirmed by a study conducted by the savings banks in cooperation with FlowFact AG and the IIB Dr. Hettenbach Institute. The study found a connection between marketing duration, sales price and marketing price. The study confirmed that the proceeds are greater and the marketing duration shorter if one relies on a realistic estimate when evaluating the property.

Thus, the professional assessment by experts of the market value of the property is highly recommended for a smooth sales process.

• Valuation by appraisers or experts (real estate agents)
• Revenue potential loses through price reduction, with too long insertion

Market value, mortgage lending value and real value

Different property values are used as the basis for valuation. The most important are the market value, the mortgage lending value and the real value. In principle, the market value, also known as the market value, is determined in a property valuation or real estate valuation.

Frequently used methods for determining the value are taken into account:

• Objective value
• Loan value
• Unit value
• Ground standard value
• Soil value

What valuation method for my object? Property + real estate

Three standardized methods are permitted for determining the value of the property by experts and appraisers: comparative value method, real value method and capitalized earnings value method. Which method makes sense when depends on the property. If it is a property, different valuation methods are used than for a building. Different valuation methods are also used for owner-occupied and rented properties. In the case of objects in compulsory auction, the value appraisals of the real estate can be viewed at the responsible local courts – often online. In this case, the owner’s consent is not required and any interested party can view such an appraisal free of charge.

Property Value Ordinance (ImmoWertV)

Until 1988, real estate valuation was based on the German Valuation Ordinance (WertV). In 2010, this was replaced by the German Real Estate Value Ordinance (ImmoWertV). The new law is intended to standardize valuation once again. With the adoption of the new regulation, the legislator also had foreign investors in mind. The ImmoWertV regulates binding terms and procedures for privately commissioned and publicly appointed experts. It is also binding for expert committees for real estate valuation.

The ImmoWertV distinguishes between the:

• Valuation of real estate and the
• Value determination of buildings

Good reasons for an evaluation by experts

If the property value is of interest, the market value must be determined. If the property is to be sold, if a divorce is pending or if inheritance matters are involved, the market value of the land is taken as a basis. The market value is also the basis for the value to be negotiated when granting loans and other forms of asset distribution. In case of a division of real estate assets (divorce, community of heirs) a price range is unsuitable. For this reason, a concrete sum must be stated when valuing real estate within the framework of market value assessments. This market value refers to the date determined in the expert opinion.

In the case of a sale of land, the precise value is less decisive and often the determined value of the land is quantified with a price range. When selling land and buildings, the regional market and supply and demand play an important role. Depending on the sales strategy, the comparative or market value determined is used differently. A basic distinction is made between sales at a fixed price and sales of land by means of a bidding process. The “perceived value” of the property should never be included in the marketing basis. If the selling price is higher than the market value, the buyer has to provide much higher equity than necessary.

Valuation of developed and undeveloped land

With the comparative value of the IPV, an offer price can be determined more precisely. In contrast to the comparative value, which is compiled by the real estate agent, the market value is the exact price that a property can probably achieve on a certain key date. What is included in the market value is regulated in the Building Code (BauGB). In order to determine the market value of a property, the location, condition, equipment (in the developed state), but also legal circumstances are taken into account. The term market value is used synonymously.

In a property valuation, the land value is determined. The determination of land value is based on the comparative value method and the use of suitable standard land values. In accordance with the German Federal Building Code (BauGB), expert committees must be formed to calculate the land values. These expert committees are composed of independent experts as well as an employee of the tax authorities.

• Tips & details: valuate property

The value of the building site

For the evaluation of building plots, the standard soil values provide a point of reference. The standard values indicate how much a square meter of space in a certain location costs on average. Concrete characteristics of the property are not included in the standard land values. Since only an average of the regional location is used for evaluation, the standard land values can deviate greatly from the actual value of the property.

In order to determine the value of the building site, it is necessary to inspect the extract from the land register. This excerpt, which is available from the land registry, contains all entries in the land register for the property and corresponds to a history of the property. However, only the seller is entitled to request the extract from the land register. The extract from the land register ensures that the seller has corresponding rights to the property and is actually allowed to sell it. If several entitled persons are registered, they can only sell their respective shares. Existing restrictions regarding the use of the land are also entered in the land register extract (e.g. land can only be built on for residential purposes). For buyers and sellers, the land register excerpt is indispensable for the valuation, division or sale of the land or property.

Another important point in the valuation is the location of the land or property. Criteria for the valuation are:

• The macro location, i.e. the region or the city district
• The microlocation, the immediate neighborhood of the property

The evaluation takes into account, for example, the neighborhood’s social milieu and its infrastructure. Even if good transport connections to shopping, school and industrial areas are not planned until the future, this can already have an impact on the property valuation.

Property valuation in the focus of investors

In addition to the standard valuation, the profitability of a plot of land or a property is of particular interest to investors. The profitability of a property refers to its development in future years. Since the boundary parameters of a property and the valuation made on a reporting date can change at short notice, only an estimate of the expected profitability is possible. The “location” factor also receives special weighting in this estimate. In a study, “Die Welt” (German newspaper) has taken into account the development of the macro locations of all German districts until 2030. A further focus of future performance is the “renovation backlog”, provided that above-average maintenance measures are expected. If the marketing of your property is to be aimed particularly at investors, further criteria are required to assess the investment offer. In addition, the form and framework of the financing are also important for investors in a property valuation. In addition, the reputation of the project developer is also important.

Taxes on land sale: Overview

Taxes are payable on every sale. Of course this also applies to real estate.

Acquisition tax, speculation period, sales tax, trade tax

Since 2012, taxes of 25 % are due on the sale of land. This applies to the profit made from the sale of a property. In principle, a speculation period of ten years also applies here. The profit is calculated as the difference between the acquisition costs and the sales proceeds.

There is no sales tax on the sale of land. Trade tax is only payable by businesses if the purchased property is counted as business assets.

In the case of large plots of land on which no construction projects are possible, a division is also advisable. In some German federal states, however, special official approval is required for the division of a property. The public building authorities or a civil engineer can provide information on this.

Building right: Later development of a property

The building law is the basis for a later development of a property. For this the building authority needs some documents like:

• Marking
• Floor
• Flat piece
• Outline
• Legal charges
• Registered building loads
• Information about adjacent properties

Marking: Real estate cadastre

A markung is a unit of area that can be found in the real estate cadastre of a municipality. The demarcation describes the ownership of a plot of land and is registered in the land register. The term cadastral plot designates an open area, usually an agricultural area.

A parcel of land is an officially surveyed part of an area. An outline sketches the respective plot of land in terms of area.

Grundschuld (former mortgage): Legal encumbrances

The legal encumbrances on real estate include first and foremost the mortgage, the land charge, the annuity charge, the life annuity, the easement, the usufruct and the real charge. The mortgage used to be a common form of loan security. Banks in particular have used these possibilities to secure loans.

In contrast to a mortgage, the land charge is independent of a claim to be secured. The annuity charge is a different type of land charge and secures payments. However, these payments do not repay the debt, but are rather to be considered as interest payments.

Leibrente, usufruct and rights

In the case of the life annuity, a piece of land can be used as collateral. The life annuity as such is a contract under the law of obligations, which can be enforced in given cases. An easement stipulates that a neighbor may use the land or that the land owner may not carry out certain things on his land. This is mainly the case with transit permits or when a building ban is to be registered.

The usufruct regulates the use of the land. The usufruct gives the usufructuary all rights as the land owner. Only a sale is prohibited. Real estate includes all actions to which the owner of the land plot commits himself. A real charge enables a creditor to auction the land.

Building development in settlement:

Large construction site industrial park:

Costs, expiry and land transfer tax

There are also some additional costs that have to be considered when selling land. These include first and foremost the land transfer tax. It is different in the individual federal states. In Hesse the tax rate is currently 6% of the purchase price. In the federal state of Rhineland-Palatinate it is currently 5%.

Land transfer tax at purchase price 500,000 Euro

Source: real estate transfer tax table by Alex Fischer (Germany).

Broker commission and upper limits

In addition, there is the broker commission. The amount of the brokerage fee is not regulated by law in Germany. Usually the buyer usually bears this burden. Sometimes, however, the costs are shared between buyer and seller. The amount of the brokerage fee is regulated differently in the federal states. However, there are upper limits.

In the federal state of Rhineland-Palatinate, the usual brokerage fee is 7.14% and is divided equally between the buyer and the seller. In Hesse, the broker’s commission is 5.95% and is borne exclusively by the buyer.

Costs for the notary public

In addition to these costs, there are also the costs for the notary. The amount of the notary’s fees is uniformly regulated in Germany. The basis for this is the so-called Court and Notarial Costs Act. However, these notarial costs can be lower when purchasing building land.

Whoever acquires a property pays the necessary notary fees. If a building is erected on this property, this circumstance does not constitute a further purchase and does not fall under the obligation to pay notary fees.

Procedure of a notarial act

A notarial certification always follows a certain scheme. For the time being a date is chosen for the notarization. At this appointment, not only the notary but also all contracting parties must be present in person. The notary reads out the purchase contract. Change requests can then still be made. The notary decides whether the desired changes are also possible. Afterwards the purchase contract is officially signed by the contracting parties and the notary.

The notary then ensures that the purchase is recorded in the land register. In addition, the tax office is informed about the purchase, which sends the buyer the land transfer tax assessment. Finally, the notary sends the buyer his fee note.

AEVO in the Masterclass (free of charge)

In my Masterclass you will find methods, strategies and hacks about online marketing, search engine optimization, content marketing, Photoshop and much more. Tips: buying guide. Now there is also the new special for professional trainers. I attended the preparation course, took the theoretical exam and was in the practical exam. What I learned? The preparation course is only half the battle (practice makes perfect) and just like in school, in the end you only need 10% of what you have learned in the exam. You can find all the questions here:

Now in the Masterclass: AEVO 1 – Checking training requirements.

Becoming a trainer: Fields of activity and preparation for the exam

Here you will find everything you need to know! Get to know the fields of action of the AEVO exam and get practical tips for your final presentation with many examples and videos – all for free! Now in the Lukinski Masterclass:

• AEVO 1 – Check training requirements
• AEVO 2 – Preparing training
• AEVO 3 – Train skilled workers
• AEVO 4 – Completing training
• Presentation – example and concept

Check training requirements

• Present and justify the advantages and benefits of the training
• Company training requirements based on legal, collective bargaining and company framework conditions
• Structures of the vocational training system
• Select training occupations for the company
• Check the suitability of the holding

The following questions represent a large portion of the teaching / exam content and should be mastered by every instructor.

Vocational training and dual system

What constitutes vocational training?

The shortage of skilled workers is present in many areas. Vocational training gives companies the opportunity to train staff based on their own demand planning.

The search for new personnel costs time and money, the hiring is associated with risks. Through targeted training in the company, risks are minimized for new hires.

Dual system, what does that mean?

The dual system refers to the separation of training company and vocational school in the Federal Republic. Both are involved in the training.

What does “permeability” mean in the dual system?

Permeability means that you can move up from one level of educational attainment to the next.

For example, trainees with a secondary general school leaving certificate can also obtain a secondary modern school leaving certificate during their vocational training.

What does personal suitability mean?

Basically, personal suitability means that you are allowed to employ children and young people as a trainer.

The requirement for this, you must not have been convicted of a crime (with a prison sentence of 2 or more years) or have repeatedly / seriously violated the Vocational Training Act. Furthermore you must not

The examination is carried out by the respective competent authorities.

What does professional ability to act / competence to act mean?

Occupational competence is the acquisition of occupational skills, knowledge and abilities that are required for the performance of the training occupation.

What does “professional competence” mean?

Professional aptitude refers to the proven ability to train in the training occupation.

Rules and regulations

Which law regulates vocational training?

The basis for all training occupations is the Vocational Training Act.

Other regulations include:

• Occupational Health and Safety Act
• Youth Employment Protection Act
• Dismissal Protection Act
• Works Constitution Act

Here’s another helpful look at the juxtaposition of the basics around law, statute, and content.

What are the training regulations about?

In the training regulations you will find information on:

• Designation of the training occupation
• Duration of the training
• Training objectives of the profession (skills, abilities and knowledge)
• Training framework plan (guidance on the factual and temporal structure)
• Examination regulation

What does “hierarchy of legal sources” mean?

The “hierarchy of legal sources” refers to the order of precedence of legal sources in the Federal Republic of Germany. First and foremost is the Basic Law.

This is followed by the laws of the parliament, laws of the state parliaments and so on. Accordingly, special agreements such as collective agreements or works agreements may not violate higher-level laws.

Training and goals

What’s your instructor goal?

As a trainer you want to fully impart skills, knowledge and abilities of the training profession.

Learn for free… go on

All questions on “AEVO 1 – Checking training requirements” can now be found here:

Now in the Masterclass: AEVO 1 – Checking training requirements.

AEVO questions: All fields of activity

All fields of activity of the instructor examination at a glance:

• AEVO 1 – Check training requirements
• AEVO 2 – Preparing training
• AEVO 3 – Train skilled workers
• AEVO 4 – Completing training
• Presentation – example and concept