Sell rental house (apartment building): How it works

Brief definition: A rental house or apartment building is a rented property (multi-family house, two-family house, also a single-family house) owned by one owner – i.e. not a homeowners’ association. That means prospective buyers are investing in what is usually a more substantial project. That’s why I’ve written this little extra guide for you on the subject of selling an apartment building.

Not everyone has experience in the sale of real estate and apartment buildings, some are also facing their very first real estate sale, often heirs who are overwhelmed with the management of such a property, which is too far away or for other reasons should be sold.

Before the first sale, there is of course a lot to know, already with the (important) valuation! Learn the basics here.

They do not sell to owner-occupiers. Investors and capital investors who invest in rental houses calculate and compare key figures. The better prepared the sale is, the more profit you can achieve.

For apartment buildings, 3 key factors apply:

• Location of your property: location and development
• Condition of the apartment house: repairs and renovation
• Tenants, leases and vacancies

Location of your property: location and development

Sellers have many questions, but one of the most important for many is “how much is my rental home worth”? Ultimately, the real estate market, like all other markets, is about supply and demand. Therefore, the valuation includes on the one hand, the property itself (object of sale) and on the other hand, the demand side (prospective buyers).

Location check: city, district, street, house number

Location (city, neighborhood, and street) – the most important aspect, whether it is an apartment building in the form of multi-family, single-family, or two-family, the location of your property has the greatest impact on the price of the land and therefore the overall valuation of your home.

Land prices

What does that mean? A simple example: An apartment building in a poor C-location (for example Duisburg in NRW) is less interesting for buyers than a good B-location property (Essen in NRW). Accordingly, property prices in C-locations are lower. In B-locations, the demand is much higher, as are the land prices. Learn more about real estate location here.

More on this in a moment, in the calculation example Munich vs. Duisburg.

Selling time

Apartment buildings in A-locations (such as Hamburg) are sold quickly, given a realistic valuation and a good network. Especially in Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich, Stuttgart and other cities with universities, colleges and good general development. It is the same in B-locations, if the “price” is right. For apartment buildings in C-location, the sales process can take a little longer.

At realistic selling price:

• A-location like Hamburg – Sold quickly
• B-location like Essen – Sold relatively quickly
• C-location like Duisburg – Relatively long (sale above price)

Fast ideally means with valid buyer that you in 2-3 weeks at the notary.

Tip: Confirmation of financing from prospective buyers

A tip beforehand: Before you invest a lot of “time” in prospective buyers, have them show you a financing confirmation from their bank. Here, the financing amount of X, for object X, was already approved in advance by its bank.

District and development

After looking at the macro situation, the next step is to look at the meso situation, the specific district. Of course, not only the situation / development of the city (population development, demographics, economy,…) plays a role, but also the development of the district is taken into account in the valuation.

In the last step, it goes to the micro location, the specific street and house number of your property.

So, if you want to make an evaluation of your rental house, with expertise of a third person, you will have to disclose the address – so look for trustworthy partners with references.

Valuation is only possible with address (location) + inspection (condition)

Just think of the difference between an apartment building, on a busy main road and just 200m away, the apartment building, on the urban green space.

Same street, different quality and land prices

Here is a small, interesting comparison:

Selling price in Munich / Leipzig / Duisburg – comparison!

The effect of the location on the value of the apartment building is correspondingly large. As an example, let’s compare an apartment building with a living space of 400 square meters, with a similar year of construction and condition. 400 m² in C-locations like Duisburg (NRW), B-locations in Leipzig (Saxony) and A-location in Munich (Bavaria).

Munich:

• District: Lehel
• Offer price: 6,671,000 euros
• Difference Leipzig: + 4.8 million / + 259 %.
• Difference Duisburg: + 6 million / + 871 %.

Leipzig

• District: Lindenau
• Offer price: 1.860.000 Euro
• Difference Munich: – 4.8 million
• Difference Duisburg: -1.2 million

Duisburg

• District: Hochemmerich
• Offer price: 687.000 Euro
• Difference Munich: – 6 million
• Difference Leipzig: – 1.2 million

The difference between an apartment building in Munich (A-location) and Duisburg (C-location) is therefore a considerable + 871 %.

After the location follows a closer look at their apartment building.

Condition of the apartment house: repairs and renovation

The more work a property does, the less investors want to spend. The less work, the more investors are willing to pay – a simple and sensible rule of thumb.

Accordingly, the second major value factor is the condition of your apartment building. Has everything been maintained or is there perhaps even a backlog of renovations in the old apartment building? Depending on how extensive the repair measures are, this must be included in the offer price.

Old existing properties – Whether built in 1920, 1930 or 1960, old properties have their own individual defects and disadvantages compared to new buildings. Everything about the building fabric, masonry, heat and sound insulation, and which repairs and defects you as the owner must expect.

The older a property is, the larger the list of defects becomes. In this guide, which I actually wrote for buyers, you will find the typical set of properties listed by decade.

• Year of manufacture and defects

Evaluate rental house: get to know methods

Market value, valuation and purchase price of your property – If you want to sell your rental house, then it comes down to one thing: An informed, market-oriented, realistic purchase price.

To give you a first impression of the complexity of location, market value, comparable properties, building fabric & Co. and to help you avoid mistakes when selling, we have written this guide on the subject of valuing multi-family houses for you. Value factors, location, equipment, market value, realistic price: This is how you can value your property.

• Rate apartment house

A 1A comparison from Leipzig, effort in redevelopment (for buyer side) or maintained existing property, the difference is immense.

Tenants, leases and vacancies

Factor 1) location, factor 2) substance, the third major weight in the valuation are the tenants and the leases when it comes to the sale of apartment buildings. The tenant list and tenant history plays the central role. Which tenants do you have in the house? What conditions have been agreed and how do the tenants meet their payment obligations?

Not every house is fully rented, some also have vacancies. The location of the property also has an effect here; in a C-location, the vacancy rate is naturally higher than in a good B-location or in an absolute prime location, the A-location, where living space is always in short supply.

With regard to tenants, but also with regard to the condition of the property, sometimes documents and records are needed for the specific valuation. Very experienced real estate agents, investors and developers, is enough to visit the house.

You’ll learn more about this in a moment, in the 18 Steps to Selling.

Lastly, an important question for those selling for the first time:

Sell with or without a real estate agent?

For those selling for the first time, a good and experienced real estate agent is essential.

In fact, the truth is that a broker takes a lot, really a lot of work off your hands.

In your rental house not about one, simple condominium, which can be put on a real estate portal to find buyers who buy for personal use, a correspondingly high number of buyers.

Rental houses are more likely to be brokered within personal networks, experienced real estate agents, with good reputation and good buyer network from investors.

In fact, a large part of real estate is brokered with real estate agents, especially when it comes to large properties, apartment buildings or even new buildings with many residential units to be sold.

If you make mistakes when selling your property, you will pay an expensive price. Professionally presented properties sell best. That’s why real estate agents achieve the highest sales prices. On average, 72% of all properties are sold through brokers (source: German Federal Statistical Office). Here is a look at the major cities:

1. Berlin with broker: 78.6%
2. Düsseldorf with broker: 76.0
3. Hamburg with broker: 65.1%
4. Cologne with broker: 63.0
5. Stuttgart with broker: 56.8%
6. Munich with broker: 55.2%
7. Frankfurt with broker: 53.3%

However, it is important to know the steps in the sale, so you can find good and experienced real estate agents for your sale. With this knowledge, you can also increasingly build your own network, for example, if you intend to participate in the real estate market more often in the future.

Step by step: checklist sale

Now that you’ve learned a lot about the value or appraisal of rental houses (and apartment buildings), it’s time to move on to the actual sale of a house. Regardless of whether it is a single-family house, a two-family house or a multi-family house, all types of rental houses are ultimately sold along the same path, which leads through 18 steps – unless you happen to know a private buyer and can thus skip individual steps such as the exposé, communication with interested parties and the viewing.

So they sell in the apartment building in 18 steps:

Preparation: prepare and evaluate rental house

Prepare property and sale

• Financial planning and timing of sale
• Hire real estate agent
• Records and documents
• Increase real estate value
• Determine offer price
• Create exposé

Sales phase: prospective buyers and negotiation

Market property and find buyers

• Market real estate
• Contact with prospective buyers
• Filter and select prospective buyers
• Credit check
• Viewing dates
• Sales talk & purchase price negotiation

Sales processing: rental house handed over

Purchase contract until handover

• Draw up purchase contract with notary
• Notary appointment
• Land register entry and payment processing
• Handover of the property
• Notary fees & broker commission
• Pay taxes

Good luck with the sale!

You have questions, want a valuation from us, with purchase option? Very much, here you will find my contact details.

Cryptocurrency explained: Blockchain, Investments & Co.

Cryptocurrency is nothing more than digital money. Here, all the important data around the holder and transaction is encrypted and stored. Instead of storing all this on just one server, the transactions are found in a decentralized network – also called: The Blockchain. This technology makes transactions faster, more secure, and less expensive than they would be otherwise. Sounds like the future? Read our analysis here: cryptocurrency development.

No investment advice or purchase recommendation!

All information provided here does not constitute investment advice or a recommendation to buy. All statements are my general published opinion. I have obtained the information from my experience as a private investor. This experience report cannot and is not intended to replace personal investment advice from professionals.

Owning and trading cryptocurrencies brings many advantages. Transactions take place directly between the buyer and seller. It is a decentralized network. So, unlike a bank transfer, exchange and bank fees are eliminated, as are transfer limits and unnecessary waiting times. Bitcoin trading is therefore not only uncomplicated, but also anonymous and secure. Instead of the own name, all crypto assets are managed with an identification code. The blockchain technology also ensures that transactions are constantly checked in advance, making any manipulation and forgery almost impossible. Learn more about the technology, course and trade explained here: BitCoin, cryptocurrency & blockchain.

Reading tip: Which app do I use to buy and sell shares, cryptocurrency & Co. Here is the answer! My recommendation: Trading App.

Trading has never been so easy! Buy from 1 euro with these apps:

Download (Android + iOS): eToro

And a little tip, Made in Germany:

Download (Android + iOS) Trade Republic

Trading with Bitcoin, Ethereum, Litecoin & Co.

The cryptocurrency Bitcoin is now a household name. It is the most popular, but by far not the only one. In the meantime, several new creations have emerged. Some of the others are Bitcoin enhancements. Thus, there are now over 4,500 cryptocurrencies. While that sounds like a large amount, only just under 100 of them achieve a daily trading turnover of $1,000 or more. Other popular cryptocurrencies are Ethereum, Ripple and Litecoin.

Cryptocurrencies – List

Here you can find a selection of interesting digital currencies:

Binance Coin (BNB)

• Binance Coin (BNB)

Bitcoin Cash (BCH)

• Bitcoin Cash (BCH)

Bitcoin (BTC)

• Bitcoin (BTC)

Cardano (ADA)

• Cardano (ADA)

Dash

• Dash

EOS

• EOS

Ethereum

• Ethereum

Ethereum Classic (ETC)

• Ethereum Classic (ETC)

IOTA (MIOTA)

• IOTA (MIOTA)

Litecoin (LTC)

• Litecoin (LTC)

NEO

• NEO

Ripple (XRP)

• Ripple (XRP)

Stellar (XLM)

• Stellar (XLM)

Tezos (XTZ)

• Tezos (XTZ)

TRON (TRX)

• TRON (TRX)

ZCASH (ZEC)

• ZCASH (ZEC)

Questions and answers: cryptocurrency

So now you know what the blockchain technology is, what cryptocurrencies there are and what advantages trading Bitcoin and Co. brings with it. Finally, you will get all the important questions about trading with cryptocurrencies answered:

Which is the best cryptocurrency?

The best cryptocurrencies include the classic Bitcoin, as well as IOTA, Ripple, EOS, Litecoin, Binance Coin and Tether.

Which cryptocurrency has a future?

According to forecasts, Bitcoin, Ethereum, Ripple and NEO have the most potential to increase in value in the future.

Are gains from cryptocurrencies tax-free?

The speculation period for cryptocurrencies is one year. If a profit of 600 euros or more is made during this period, the total profit must be taxed. So if the coins are left in the wallet for at least 12 months and only paid out after the speculation period, no taxes are due.

Should you invest in cryptocurrency?

Only invest in cryptocurrency if you are familiar with blockchain technology, different currencies and wallets. After all, this is a decentralized network based solely on demand. So always be aware of the risks and only invest if you are really sure and familiar with cryptocurrency trading.

Cryptocurrency: reading tips

1. Trading App: Recommendation
2. Trading strategies

Trading App: Recommendation

eToro App – Trade stocks, ETF, cryptocurrency, in my blog you have already learned a lot about trading. Lots of questions of course: which app do you trade with, what do I recommend? So today I want to share with you my favorite trading app, eToro. 29.88% asset growth in 12 months, with low risk through “Copy People” and “Copy Portfolios” or up to 127.35% through active trading and trading strategies. Learn about the app, fees and more here step by step.

• Trading App

Trading strategies

Whether it’s crytocurrency, currency trading, stocks, commodities or precious metals, these 3 strategies will help you understand the basic stock market game. I developed these 3 strategies to help beginners and novices understand the mechanics in a nutshell. Since I grew up with Bitcoin rather than stocks, here in particular a strong reference to digital currencies. But the mechanisms or strategies are the same for these 5 investment types: crytocurrency, currency trading, stocks, commodities or precious metals. I would exclude ETFs and index funds, as the risks and price fluctuations are significantly lower here.

• Trading strategies

Did you already know? Open transactions in the blockchain

Cryptocurrency itself is, simply put, a coded chain of data. The so-called blockchain.

How does cryptocurrency work?

Everything is set up as a P2P network (peer-to-peer). Data is therefore stored in a decentralized manner. All data blocks are linked to that of the predecessor. Within this distributed database, all transactions are actually known!

The whole thing is therefore a network in which cryptographically signed messages are published – technical term: blockchain. You want to have a look at these transactions? Here you can see live how individual trades sometimes sell up to 100 Bitcoins and how sums in the millions go over the table:

• Bitcoin transactions – live on blockchain.com
• Ethereum transactions – live on blockchain.com