Notice of termination of own use: Definition & Explanation

So if you acquire a property that is already rented out, this does not mean that you have to continue renting it out. On the contrary: In some cases, you can even move into your new property shortly after the purchase. For this, you must then prepare a notice of own need and submit it.

Deadline for the declaration of own need: 3 to 9 months

Let us now take a step-by-step look at the details of such a termination.

Demonstrable reasons for own use: desire for children, old age & Co.

You must therefore provide reasons for the termination of the tenant. Not every reason is also a reason for own need. Instead, you must be able to show that you have to move into the house or apartment for compelling reasons and have no alternative. Illness, old age or pregnancy can be such reasons.

Here are some examples:

• Desire to have children
• Living space extension
• Professional move
• Replacement apartment
• High age
• Disease

Notice for beneficiaries: From children to grandma

In addition, you can also terminate the tenants if a person benefiting you urgently needs the living space. This includes grandchildren, life partners and also children-in-law and parents.

Beneficiaries include:

• Children
• Parents
• Grandparents
• Siblings
• Grandson
• Nieces and nephews
• Children-in-law and parents-in-law
• Spouse
• Life partner

Cousins, great-nephews and -nieces, as well as step-grandchildren also belong to the group of beneficiaries. In some cases, you will need proof of the exact background and the relationship between you and the person.

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Owner-occupancy: buy rented or unrented?

So let’s assume you want to purchase the property for owner occupancy. That is, you want to buy your property, move in there directly and maybe even redesign it as the case may be. In this case, an unrented property is best suited. You save time, because you do not have to give notice to any tenant, as well as costs and effort.

Advantages with non-rented property: less costs, time and effort

But what do you do when you have found the property of your dreams and it is rented? Then you need to give notice of your own needs.

Termination of own use: Legal deadline, exceptions & Co.

Tenants may therefore be given notice of termination if they require the property for their own use. The only requirement here is to observe the statutory period of 3 to 9 months for terminating a tenant’s own use.

In addition, you must provide comprehensible reasons why you need the house or apartment for personal use. This is also possible if a beneficiary needs to move in for urgent reasons. The mere desire to move in personally is therefore not sufficient. Exceptions also apply in the case of illness, old age or single parents.

Reading tip: Notice of termination of own use

Rented vs unrented for capital investments

If you acquire a property as an investment, both rented property and non-rented property bring their advantages and disadvantages.

Buy rented: No new leases or vacancies

If you want to buy a property that is already rented, this definitely offers some advantages. You don’t have to look for new tenants and thus avoid the risk of a vacancy. Also, the seller can give you some information about the payment behavior of the tenants. At the same time, renting also means that you have to take over all rental agreements. This includes those that are worded incorrectly.

Here again the advantages at a glance:

• No new lease necessary
• Tenants are already known
• Low risk of vacancy

Buy unrented: Current lease and market price

If you buy a property that is not rented out, you will initially have to reckon with vacancies, but you can also renovate and refurbish the property again directly if necessary. You can also formulate your own rental agreements here and can rent out the property for a current, market rent. Speaking of which: renovation work that serves to increase the value of the property is tax deductible – another plus point!

So, you can enjoy these advantages when buying a non-rented property:

• Market price for new rentals
• Independent drafting of a lease agreement
• Enough time for renovation work

Bottom line: should you buy rented or unrented?

When answering this question, it depends not only on the purpose and goal of the property, but also on which advantages can be best combined with it. Would you prefer to move into the new property quickly? Then a non-rented property is associated with significantly less time, cost and effort. If the house or apartment is an investment, you must decide for yourself which next steps are most likely to suit you.

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• Buy criteria apartment

Checklist: Criteria for your real estate investment

With our 11-point checklist you are well prepared for your real estate purchase:

Real estate as an investment vs. personal use

At the beginning, the question clearly arises: Do you want to live in your property yourself? Or do you want to rent out your apartment as an investment property after the purchase? This is something to think about at the beginning. After all, this not only affects the financing. As an owner-occupier, you will continue to be responsible for the operating costs yourself after purchasing the property. However, if it is a property as an investment, these costs are mainly covered by the tenant and the tax office.

• Self-interest or capital investment? Comparison

Amount of the purchase price: factors

It is equally important that you set a maximum purchase price for yourself. You should take several factors into account here. These include your creditworthiness, the available equity capital and your mortgage lending value.

Learn more about the important factors including tips and tricks here:

• Maximum purchase price

Maximum gross rental return: Formula

What is the minimum rental yield required for the investment to be both profitable and paid off by the tenant? We recommend the following formula for this:

Formula: Annual rent / purchase price * 100

Investors pursue one primary goal, efficient wealth accumulation. Accordingly, the gross rental yield of a yielding property must be high. Learn more here:

• Minimum gross rental return

Buy rented or unrented?

Of course, you can buy an already rented property just as well as an unrented one. However, if you are purchasing the property for your own use, an unrented property would definitely be more advantageous. If you already have tenants in the apartment, you can terminate the lease after purchasing the property for your own use. The same applies to capital investors. On the one hand you save time by the tenants time and do not have to look for new ones, are however at the same time bound to the rents. So should you buy rented or unrented? Find out all the advantages and disadvantages here:

• Rented vs unrented

Location, location, location!

Not only the city is important, but also the neighborhood. Where is the nearest hospital? What is the connection like? Is there a lot of vacancy in the neighborhood? And how safe is the neighborhood? All of this affects not only your on-site living experience, but also the value of the property and the purchase price. So what exactly does A, B and C location mean? How can it be determined and how does it affect the purchase price? Learn more here!

• A, B, C position

The perfect location

Depending on whether you are looking for a property as an investment or for personal use, the demands on the location also differ. So what are good locations for your personal investment goals?

• Find location

New construction or existing property?

Both new construction and existing buildings have their respective advantages and disadvantages. The most important question here is: Are you using your property for your own use? Or as a capital investment? Finally, the use of your property also influences your decision. The differences between existing and new buildings, as well as the respective advantages and disadvantages can be found here:

• Existing or new construction?

Age of the property: advantages & disadvantages

More than 2,650,000 properties currently located in Germany were built before 1919, and 5,000,000 of them were built before 1949. Some of these properties are real bargains on the market, and their subsequent sale price can be significantly increased by value-enhancing measures. But what are the advantages and disadvantages of buying an older property? Here is a direct comparison:

• Defects by year of manufacture

Size of house and apartment

How big should the property be? In addition to the location and age of a property, its size ultimately plays an important role. One-bedroom apartment or villa with several bedrooms? Bungalow with basement or rather maisonette? Here we compare living space for owner-occupancy as well as for capital investment. Especially for capital investors who plan to rent out their purchased property, the room layout and the number of square meters are important.

• Optimal size of a property

Ground lease? Yes or no

Some real estate is subject to a ground lease. But what is a ground lease? Can the costs be tax-deductible or even passed on to the tenant? Learn all about ground leases, how they work and their advantages and disadvantages:

• Ground lease

Social binding? Yes or no

In addition to the ground lease, it may be that you will also stumble on the subject of social binding. Everything about your obligations on low-interest loans to the post-commitment period – Is it worthwhile for you to buy a property with social and post-commitment?

• Yes or no? Social binding