Family vacation | Lukinski

Selling apartment with tenant: Rights, duties & special features

Laura — Wed, 08 Mar 2023 05:04:50 +0000

Selling Apartment with Tenant – Wanting to sell your rented apartment can be a profitable way for landlords to free up capital and make a profit. However, the selling process can present some unique challenges. In particular, tenant rights must be considered before, during and even after the sale. Find out here everything you need to know about selling a rented apartment, from tenant protection against termination to inspection rights and marketing.

Selling apartment with tenant: What to consider

Selling a rented apartment is a complex undertaking. After all, many factors have to be taken into account, from finding a buyer to legal requirements. Above all, the tenants play an important role. The sale of an apartment does not necessarily mean that existing tenancies may be terminated. We will now take a closer look at what needs to be taken into account.

Termination protection: Purchase does not break rent

A sale of the apartment does not necessarily mean that the rent is broken. On the contrary, the existing lease agreements must be honored by both parties even after the apartment is sold. This is stipulated in the Civil Code. This means that the new owner must adopt the terms of the lease. The tenant continues to have the right to quiet and undisturbed possession of the apartment as long as he makes his rent payments and complies with the terms of the lease.

However, it is important that the landlord informs the tenant about the planned sale and gives him a reasonable period of time to inspect and prepare the apartment. The tenant should also be informed about the new owner and, if necessary, sign a new lease.

In summary:

§ 566 BGB: Purchase does not break rent
Buyer takes over rental agreements
Condition: Tenants continue to make rent payments
Landlord must still announce sale

Right of first refusal for tenants

If it is not just a single apartment that is being sold, but a complete apartment building that is being divided into individual co-ownership shares, the tenant enjoys a right of first refusal. This is a protective mechanism designed to prevent him from having to move out of the apartment without warning after a successful sale. With the right of first refusal, the tenant can buy the apartment and now becomes part of the resulting condominium owners’ association.

The most important facts about the right of first refusal:

When apartment building is divided into individual apartments
Right of first refusal protects tenant from moving out
Becomes a member of the homeowners association

You can find out here what other special features need to be taken into account in this case:

Apartments for sale individually

The expensive alternative: a lease termination agreement

The tenancy cannot therefore be terminated unilaterally by the new owner without sufficient justification. However, the owner has the option of offering the tenants a lease termination agreement and granting them an attractive severance payment. In this contract, an eviction period for the rented apartment is agreed upon, which is independent of the legal regulation. This allows the tenancy to be terminated by mutual agreement.

Right of the landlord to inspect

Whether it’s a maisonette or a micro apartment – if you want to sell your apartment, you are legally allowed to hold viewing appointments. These are important to show and present the apartment to potential buyers. However, the landlord does not have unlimited rights to visit. He must respect the tenant’s privacy and may not conduct viewings too frequently or at unreasonable times.

For this reason, you should arrange any viewing appointments with your tenants in good time. In addition, you must state the purpose of the viewing so that the tenant can see the time and space involved. Although the landlord is generally entitled to a right of inspection prior to the sale of the rental property, the tenant does not have to allow an infinite number of inspections. According to current case law, inspections once a week are considered reasonable.

Right of inspection of the landlord declared:

Conducting surveys allowed by law
Agreement with tenant indispensable
Once a week possible
Naming the purpose of the visit

Owner-occupier: termination in the event of owner occupancy

If a landlord wants to sell his apartment, he may not simply terminate the tenant’s lease. However, there is one exception: If the landlord needs the apartment for himself or his family members and no other comparable apartment is available. In this case, the landlord can terminate the tenancy with a notice period.

It is important to emphasize that the landlord must make the own need credible. A blanket assertion that he needs the apartment for himself or his family members is not sufficient. The landlord must be able to prove that he actually needs the apartment, for example by explaining why he needs the apartment and that he has no other apartment available.

Under these conditions, a termination of own use is possible:

Legitimate interest on the part of the lessor
Self-interest for oneself or other family members
Proof that the apartment is needed
Compliance with the statutory periods of notice

Sell rented apartment: Procedure & Tips

Let’s say you’ve now decided not to move into the apartment personally, nor have you agreed to a lease termination agreement. Here are some important things to consider when selling a rented apartment:

Capital investors & investors as target group

If you decide to sell your rented apartment, you have to expect a lower demand. After all, most buyers are looking for an apartment for their own use. At the same time, the current low interest rates ensure that more and more people want to invest their money instead of hoarding it in the bank. Therefore, the purchase of rented apartments is the most interesting for capital investors.

Rented apartments can be a stable and long-term investment opportunity as they generate regular income while allowing for potential property value appreciation. Investors can benefit from ongoing rental income and thereby continue to build their wealth.

Tips for planning and procedure

Marketing a rented apartment can be complex. There are some important points to keep in mind. As mentioned above, you need to make sure that you are familiar with all the rights and obligations surrounding the sale. You are also obligated to inform the buyer of all important details about the rented apartment. This includes, for example, the current lease agreement, tenant status, rental condition, and any rent arrears. Since a rented apartment may be worth less than a vacant apartment, you should consider both the condition of the property and the amount of rent when setting the price.

The most important things summarized:

Familiarize yourself with the rights & obligations
Inform the tenant about the sale
Clarify the tenancy to the buyer
Set a realistic purchase price

Tip: Sell apartment with broker

One tip when selling a rented apartment is to hire an experienced real estate agent for this purpose. A good agent has the necessary know-how and experience to make the selling process go smoothly and achieve the best possible results for the seller. A realtor can help properly value the home, create the exposé, find prospective buyers, arrange viewings and negotiate the closing of the sale. In addition, he can assist in obtaining the necessary documents and legal issues. Thus, a real estate agent can be a valuable support in the sale of a rented apartment.

Conclusion: selling apartment with tenant

In summary, the sale of a rented apartment presents some special challenges. It is important to consider the rights and obligations of the landlord and tenant, to conduct viewings only by appointment, and to comply with the tenant’s protection against termination. When selling, all necessary documents should be complete and up to date to facilitate the sales process.

It is advisable to contact an experienced real estate agent for assistance in marketing the apartment and handling the sale. Through professional preparation and careful execution of the sales process, landlords can achieve a successful transaction and obtain a reasonable return on their investment.

Apps real estate: recommendations for tenants, landlords & real estate investors

office@cxmxo.com — Fri, 03 Mar 2023 11:30:05 +0000

Real Estate Apps – These apps are for all apartment hunters, landlords, sellers or real estate investors. They offer tools and calculators to calculate key figures around the real estate or you can find your dream property for personal use or as an investment. All apps in an overview with the respective download link can be found in this list.

Real Estate Apps: Knowledge & News

With the following apps you will always stay up to date when it comes to real estate. Apps for beginners and for advanced users.

Real Estate Experience App

The Immobilien-Erfahrung.de app offers you all the real estate knowledge you need about capital investments, building management, upgrading, as well as financing and management. With the practical calculators, you can find out about ancillary purchase costs and many other key figures. In the real estate wiki, you will find over 1,000 technical terms simply explained.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

Download from Google Play Store & Apple App Store.

IZ – Real Estate Newspaper

With IZ-Immobilienzeitung you always stay up to date with news from the German real estate industry. Find out everything about yield opportunities or investment properties in one app.

Is the app free of charge?

Yes, the app is free
Subscription needed

App Download: iOS & Android

Here you can find the app in the AppStore (iPhone) and Playstore for all Android smartphones.

House & Ground Magazine

The magazine “Haus & Grund” provides up-to-date information on topics in the real estate sector for tenants, landlords and property owners. For example, it covers political developments, news relating to tax law or tenancy law, and administrative topics. Readers have the option of marking articles with simple bookmarks and categorizing them later.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

Here you can find the app in the AppStore (iPhone) and Playstore for all Android smartphones.

Real estate apps: online tools and calculators

With these tools, you can calculate practical key figures relating to real estate quickly and easily. From equity and return, to usable space and floor area – learn everything with these apps.

Real Estate Guru (my app): Learning App & Calculator

The Immobilien Guru app provides you with over 20 online tools related to real estate. In doing so, you can access a variety of practical key figures that can serve as decision-making aids or advanced knowledge. The app allows you to quickly and easily calculate savings plans for reserves, equity and return on real estate.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

Here you can find the app in the AppStore (iPhone) and Playstore for all Android smartphones.

Rented.com

The real estate app Vermietet.de has been specially developed for landlords and property managers. The app offers a simple, secure and time-effective way to organize all aspects of property management, regardless of the type of portfolio – whether it’s a condominium or an apartment building. The app’s features include legally compliant service charge statements, secure rental agreements, valuation, and officially verified templates for reminders and rent increases.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

Here you can find the app in the AppStore (iPhone) and Playstore for all Android smartphones.

Immocation.com

The Immocation.de app offers a simple and clear calculator that gives you quick and precise information about the return on investment before you buy or sell a property. In addition, the app offers further tools that provide you with detailed information on the subject of real estate. Thanks to the user-friendly user interface with simple sliders, operating the app is uncomplicated.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

Here you can find the app in the AppStore (iPhone) and Playstore for all Android smartphones.

Deka real estate funds

The Deka Immobilienfonds app provides you with comprehensive information on all important details of the Deka Group’s property funds. With this app, you have quick and easy access to information such as the unit price, property information and background information on purchases and sales. The app’s push functions keep you up to date with the latest developments.

Is the app free of charge?

Yes, the app is free

App Download: iOS & Android

What is Fix and Flip? Success & Risk

Fix & Flip describes a strategy of real estate trading in which a property is bought cheaply, then upgraded cost-efficiently through refurbishment or renovation measures, and subsequently sold for a higher sales price. The profit is the difference between the selling price and the purchase price including the revaluation costs.

Fix & flip is a risky variant of real estate trading, since the goal is a timely sale and not a long-term return.

Fix & Flip enables a short-term increase in equity.

Fix & Flip in a nutshell:

Real estate trading strategy
Buy, Upgrade & Sell
Gain profit through sale

What are the advantages and disadvantages of the strategy?

Advantages of Fix & Flip

The Fix & Flip strategy offers several advantages, especially for beginners. It allows you to make quick profits, especially when real estate markets are rising and to enter the real estate market with a small initial investment. You also gain experience-based knowledge about the real estate market and renovation processes.

The advantages summarized:

Quick, short-term profits
Low initial investment
Experience in real estate trading and appreciation

Disadvantages of Fix & Flip

However, the strategy also brings disadvantages. For example, you always have a high risk, especially in case of unforeseen costs or delays during the renovation. Fix & Flip is also a time-consuming process, especially when it comes to finding suitable properties, monitoring the upgrade and marketing the property.

You need expertise and experience in real estate trading and renovation to effectively make a profit. And competition in the market is increasingly complicating the chances to sell properties.

The disadvantages at a glance:

High risk due to costs and delays
Time-consuming process of search and marketing
Efficient upgrading as a prerequisite
Increasing competition makes trading more difficult

Let’s look again in detail at the three main steps of the Fix & Flip strategy.

Fix & Flip property purchase: Market analysis and financing

The first step for your Fix and Flip plan is to find a suitable property. You must pay attention to the condition and location of the property. The condition of the property will determine the costs incurred and the duration of the upgrade.

The location plays a more extensive role.

If the property is in a busy location, the purchase price is higher, but you have a higher demand. If the property is in a less favorable location, the purchase price will be lower, but the sale may be delayed because the demand for these properties is lower.

It is therefore important to conduct a detailed market analysis and check properties on site. This way, several properties can be compared specifically according to your criteria and the right property for your fix and flip plan can be found.

The criteria for a Fix & Flip property at a glance:

Real estate market analysis & comparison
Checking the condition of the property
Find object in an optimal location

Once a suitable property has been found, it must be financed.

Fix & Flip Financing: Banks & Risk Appetite

How you finance your Fix & Flip strategy is up to you. In most cases, you will have to rely on the support of external lenders. Banks are a good choice. Which bank will finance your Fix & Flip plan depends on their risk appetite. Since Fix & Flip is associated with high risks, some banks decide against financing Fix & Flip.

You can find out everything about Fix & Flip financing from our partners:

Fix & Flip Financing

After the successful acquisition of the property follows the upgrading.

Fix and flip property upgrade: refurbish & modernize

The efficient upgrading of the property plays the crucial role in shaping the profit margin. Many Fix & Flip properties require renovation or refurbishment. These improve the quality of life for the residents and also increase the sales price. You should have already determined which measures are explicitly required during the substance check.

The important thing in upgrading is planning.

Proper planning of costs and time will allow you to select the necessary measures and include additional delay.

You can read about how exactly to upgrade your property for your fix and flip plan in this post:

Fix and flip property upgrade

After the upgrade, the property must eventually be sold.

Fix and flip property sale: Preparation & Valuation

For a successful fix & flip strategy, the sale plays just as crucial a role as the purchase and appreciation of the property. The sale is decisive in the end about the real profit you get from the whole effort. In order to sell the property it must be offered. For this, valuations and price estimates are necessary.

Architects or craftsmen can already evaluate the property during the upgrading measures. This provides you with a clear assessment for the sale. In addition, the early assessment enables you to produce the advertisements and announcements promptly. Thus, interested parties and demand can be found at an early stage.

The sale of the property again at a glance:

Sales as a decisive factor of profit
For the sale the property must be offered
Evaluation by architects & craftsmen
Early placement of advertisements and announcements

In addition to the simple principles of selling, the Fix & Flip strategy also includes other factors. You can find out what these are in the following detailed guide:

Fix & Flip property for sale

Conclusion. Fix & Flip to increase capital

The Fix & Flip allows you to either enter the real estate business or continue to grow your capital as an experienced real estate investor. Keep in mind the high risk that the method entails of losing time and profits. Also, the fix & flip is a short-term process. You are using real estate as a sales property, not as a long term income property. This in turn allows after a successful “flip” of a property to directly start the next project.

For a more extensive overview and depth on the entire Fix & Flip, visit our partner. Here you will learn more about the tax burdens, the control of the building fabric, as well as the exact cost accounting for the entire plan.

Fix & Flip Real Estate

Operating costs: apportionable service charges, maintenance, water supply – explanation & definition

Laura — Fri, 05 Nov 2021 08:05:16 +0000

Operating costs – Which operating costs are to be paid by the tenant? And which ancillary costs do you have to take care of as a landlord? Which costs are apportionable and which are not, is defined by law. Find out more about the topic of operating costs and why you absolutely have to include them in the rental agreement!

Service charges: definition & explanation

Whether yield real estate or investment real estate, during the purchase of a house or an apartment there are always ancillary purchase costs. What many underestimate: The ongoing ancillary costs of owning a property. If you buy a rented property or do the initial letting yourself, you can pass on some of these incidental costs to the tenant.

Non-apportionable incidental costs: repair, maintenance & co.

You cannot pass on costs for craftsmen, maintenance and management to the tenant. After all, it is your responsibility as a landlord to ensure that the property meets modern safety standards and is rentable.

As the landlord, you must bear these costs yourself:

Repair costs
Maintenance costs
Administrative expenses
Bank charges

Apportionable service charges: The tenant pays

The apportionable ancillary costs are those that can be apportioned to the meter by you as the landlord. To avoid misunderstandings here, these should be agreed in the rental contract. This type of incidental costs are also called operating costs. Let’s take a closer look at them.

List of operating costs: (BetrKV) § 2

Operating costs are therefore constant ongoing public charges on the property. These are defined and regulated by law. Thus, any costs for the care and maintenance of the common areas and facilities fall into the category of apportionable service charges. Any costs for street cleaning, garbage disposal and for the chimney sweep are also paid by the tenant.

Here is a brief overview:

Water supply
Drainage
Heating system and fuels
Hot water system, supply and equipment
Connected heating and hot water supply systems
Passenger or freight elevator
Street cleaning and garbage disposal
Building cleaning and vermin control
Garden maintenance
Lighting
Chimney cleaning
Property and liability insurance
Janitor
Community antenna system
Facilities for laundry care
Other operating expenses

More about buying real estate: Operating costs

Are you buying a property that is already rented out or are you planning to rent out your newly purchased property? If you’ve never rented out a property before, you should definitely take a closer look at the different ancillary costs. Read even more on the subject here, on my new site for buyers, Immobilien-Erfahrung.de:

Apportioning operating costs to tenants (external)

Leasehold and ground rent: definition, advantages and disadvantages for owner-occupiers & capital investors explained

Laura — Wed, 20 Oct 2021 13:39:09 +0000

Ground Lease & Leasehold – What is a ground lease? How does a ground lease work and to whom is the ground rent paid? Whether owner-occupancy or capital investment, learn everything you need to know about ground leases here – from the parties involved to the impact on ancillary purchase costs and the mortgage lending value. Advantages and disadvantages included!

Definition: What is a ground lease?

You have found a house or an apartment building you are interested in, but it is located on a leasehold land? Or you have found a suitable property and it is subject to a ground lease? What does this mean? Simply explained, hereditary building rights mean that the right of ownership and the right of use are permanently separated. A distinction is made here between two parties: The ground lease provider and the ground lease taker. The ground lease holder leases the land and is then allowed to use the land in return for an annual ground rent.

Here is a summary of the ground lease:

Ownership and usage rights permanently separated
2 parties: ground lease grantor and ground lease taker
Leasehold in return for building rights

Advantage of a ground lease: Favorable purchase price

Of course, a ground lease has both advantages and disadvantages. Probably the biggest advantage is that the purchase price here is significantly lower than usual, since the purchase price for the land itself is omitted. Leaseholders also benefit from reduced ancillary purchase costs.

The purchase price of a property on leasehold land is significantly lower

Disadvantage: Monthly ground rent

In return for being allowed to use the land, you have to pay a monthly or annual ground rent to the owner of the land. In addition, the mortgage lending value of your property decreases significantly because the value of the land is constantly decreasing while the ground rent incurs costs.

The two disadvantages of a ground lease at a glance:

Payment of the ground rent causes costs
Collateral value of the property decreases

Conclusion: Is a ground lease worth it?

Buying or building a property on leasehold land therefore brings different advantages and disadvantages. While you can enjoy a low purchase price, a regular ground rent is incurred at the same time. And the mortgage lending value of the property also decreases.

You can now find even more facts and tips about ground leases on my new project for real estate buyers (Immobilien-Erfahrung.de):

Ground lease (external)

If you want to learn even more on the subject of buying a property, whether owner-occupied or capital investment, numerous articles, guides on the subject of rented vs unrented, as well as checklists, all free and 24 hours online available, with us!

Apartment, house, apartment building, everything for real estate beginners!

Now new on Immobilien-Erfahrung.de:

Buy property: learn – external