Old real estate: apartment & house from older decades

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

Here is a brief overview:

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

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

Existing property: advantages and disadvantages summarized

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

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

Here again summarized, the advantages and disadvantages.

Advantage of buying an old property:

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

Disadvantage of buying an old property:

• High costs for maintenance and repairs
• Possible hidden defects

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

Real estate with year of construction 1900

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 Due to the outdated construction technology of that time, thermal insulation is either non-existent or inadequate.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

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

Defects of real estate before 1900

Here is a brief overview:

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

Real estate with year of construction 1900 – 1939

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

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

Checklist: Defects of real estate around 1900 – 1939

All shortcomings briefly summarized at a glance:

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

Real estate with year of construction 1939 – 1945

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

Checklist: Defects of real estate around 1939 – 1945

Typical deficiencies include:

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

Real estate with year of construction 1945 – 1959

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

Checklist: Defects of real estate around 1945 – 1959

Characteristic of real estate from the period are:

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

Real estate with year of construction 1960 – 1969

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

Checklist: Defects of real estate around 1960 – 1969

Here is a brief overview:

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

Real estate with year of construction 1970 – 1979

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

Checklist: Defects of real estate around 1970 – 1979

Typical deficiencies include:

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

Real estate with year of construction 1980 – 1999

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

Checklist: Defects of real estate around 1980 – 1999

Here again the typical defects from 1980 – 1999:

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

Conclusion: Should you invest in old real estate?

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

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

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

Determine maximum purchase price: Important factors

One of the most important steps in the purchase of a property, which is often underestimated, is the determination of the maximum purchase price of the property. In order to avoid unwanted surprises here, it is important to determine this before you start looking for a property. This usually involves sitting down with your bank advisor and going over your finances. You then show a certain amount of equity and the bank then gives you a corresponding loan. The amount of this loan depends on your creditworthiness (for this you have to submit a self-disclosure ), as well as on your equity to be presented. The loan-to-value ratio of the property and the monthly charge are also taken into account.

Equity X + Bank loan Y

These are the factors that matter:

• Credit rating
• Mortgage lending value of the object
• Available equity
• Monthly load

Let’s now go through the individual factors in a little more detail:

Credit rating: assets vs. liabilities

When your credit rating is checked, your assets and liabilities are mentioned and compared. If the balance is positive, i.e. your assets outweigh your expenses and liabilities, your chances of getting a loan are very good. And the higher this credit rating, the lower your equity investment. After all, the bank also wants your money back as soon as possible and wants to be sure to get it.

Assets are matched with liabilities

Mortgage lending value of the property: market value & fair market value

The mortgage lending value of the property is generally lower than the market value. The market value is the selling price of the house or apartment if it were sold at the present time. Therefore, the market value is also called ‘theoretical market value’. The mortgage lending value is on average 20% below this. In order to minimize the risk of loan default, banks base their lending decisions on the mortgage lending value and not on the market value.

Mortgage lending value = market value – 20%

Available equity: Dependence on the balance sheet

As a general rule, 20% equity capital is needed. As mentioned before, the exact amount of equity ultimately depends on your credit rating. The more positive your balance sheet, the less equity you have to show. So you can also invest with an equity of 10% or 15% already in a property.

The better the credit rating, the less equity capital

Monthly load: income & expenses

The last important factor that influences the financing and thus the maximum purchase price is your monthly burden. Similar to the credit check, income and expenses are compared here. This is important for the bank, as it allows them to set the conditions for repayment, interest and redemption.

Conclusion: Determine maximum purchase price & financing

So, in addition to your credit rating and available equity, your monthly financing and loan-to-value also matter. This way, you can not only determine the maximum purchase price before you start looking for real estate, but also determine the terms for repaying your loan.

Buying real estate: Learning from A-Z

If you want to learn even more about the maximum purchase price, stop by our guide:

• Purchase price height (external)

â A guide â all the facts â insider tips â buying checklists to the questions that real estate newcomers have when buying the apartment: Owner-occupancy or rental, financing a condo, apartment hunting, real estate portals, realtors, appraisal, purchase prices, negotiations and taxes. Knowledge and experience from experts, in one guide. Learn step by step the process of buying an apartment and many insider tips!

• Buy apartment

House rules in apartment buildings – their rights and duties

Living in an apartment building with strangers under one roof can not always be easy. Different opinions meet each other and that especially in relation to common rooms, such as the hallway or the basement area. So that all tenants know what they are allowed to do and what they are not allowed to do, the most important regulations and the most common cases are laid down in the house rules. So what do you as a tenant have to observe and what happens if you violate the house rules?

https://www.instagram.com/p/Bn2q1x3jaHv/?taken-by=myhome_mystyle

House rules – different types, who determines and changes them & consequences of violations

First of all, you should know that there are different types of house rules. The first are those that are part of the lease and therefore signed and accepted by you, and the second are those that exist externally to the lease. The difference is that with external house rules no rights or obligations can be imposed on you, because you never signed or accepted these house rules. These house rules only describe orderly instructions on certain topics. The external house rules can therefore be changed or modified by the landlord at any time. How profitable is renting? See our rental yield. The house rules in the lease, on the other hand, can impose rights and obligations on the tenant. These include, for example, shovelling snow in winter or cleaning the staircase. These house rules cannot simply be changed by the landlord, as they are laid down in the tenancy agreement and you would first have to give your consent. Both house rules are determined by the landlord and the points recorded in them. However, it is not only the landlord who demands that the house rules are adhered to, but all the residents of the house.

Violations of the house rules also make a distinction between the two types. Breaches of the rules laid down in the tenancy agreement could result in a warning and, in serious cases, termination of the tenancy agreement. For violations of the external house rules, usually no penalties can be made right against you.

What can the house rules regulate and what not ?

The house rules are generally responsible for regulating the coexistence of several parties. They should also regulate how tenants are to treat their apartment and common areas. Important points that should be listed in the house rules are, for example:

• Cleanliness and order
• Noise and quiet times
• Safety regulations
• Use of common areas
• Heating and ventilation

To make it clearer which house rules govern what, here is a small example: In the rental agreement it can be stated that the tenant has to clean the staircase. The external house rules then regulate how often, what exactly and how the staircase is to be cleaned. In this way, the areas of responsibility are divided between the various house rules. However, the external house rules may not extend the duties from the tenancy agreement, but only specify them in more detail. Also, the house rules may not grant the landlord any further rights. However, the house rules in the rental agreement also have their limits. The landlord may not prescribe certain things that are regulated differently by law. This includes, for example, the heating. The landlord may not prescribe in the house rules when the tenant may heat and when not, because according to the law, the tenant has a right to a sufficiently heated, warm apartment at any time of year. So read the house rules carefully and know your obligations.

The most common disputes about the house rules

Of course, the house rules should avoid disputes, but it still happens again and again. Of course, the house rules differ depending on the house and the circumstances, but there are general rules that should prevent disputes. Questions that are asked again and again and topics that nevertheless always lead to disputes are for example:

Locking the front door

This point is a matter of dispute for many apartment buildings, because one person does not feel safe as long as the door is not locked, the other does not want to have to search for the key in a dangerous situation. In this case the landlord may prescribe what he thinks proper. He can stipulate that the door must remain closed for safety reasons, but just as well that it should remain open for fire safety reasons. The legal situation here is not clear and even in court there are different opinions.

Visitors

Another point of contention is the topic of visitors, because officially the tenant may not be prohibited or forbidden to visit. Even restrictions, such as only visiting without a dog are not allowed. What the landlord can use, however, is the house ban. If a visitor repeatedly attracts negative attention, for example by disturbing the peace or causing damage, the landlord may ban this person from the house and the visit is prohibited for this person. If a visitor stays longer than six weeks in the rented flat, the landlord must be informed.

Quiet times and noise

The most common quiet hours, which are set out in house rules, are between 1pm and 3pm at midday and between 10pm and 6am at night. However, these times may vary at weekends. During these quiet hours, all tenants should be considerate of noise. Loud music or noise from playing children should be avoided. The exception, however, is noise from babies or small children. This must be tolerated even at night. However, the tenant may not prohibit showering or bathing during these times. Out of consideration for the rest of the house, however, showers should not be taken for hours at night – especially not in buildings with high sound levels.

Storing a bicycle or pram

Prams, wheelchairs or walkers may be parked in the stairwell by the tenant, but only under certain conditions. For example, no other suitable storage room may be available and the tenant cannot be expected to carry the object into the apartment because the lift is missing or too small. If an object is placed in the hallway, however, the fire safety regulations must not be violated, so that no tenant could be put in danger by the object. Bicycles are given a slightly different rule here. As a matter of principle, they may not be parked in the stairwell. If there is no bicycle cellar or other storage rooms and the bicycle is at risk of theft in front of the building, the tenant may park the bicycle in the courtyard or take it into his own apartment.