Terrace apartment: definition, costs, advantages & disadvantages for tenants and buyers

Terrace apartment – You want to buy an apartment, sell an apartment, or are simply looking for the right investment property? No matter if it is an old building, a loft or a penthouse. You should always inform yourself about the respective apartment before buying. Here we introduce the apartment type terrace apartment. A terrace apartment is an apartment that is defined solely by the possession of a terrace. The size, room layout and apartment type can vary greatly. This article defines a terrace apartment, points out its advantages and disadvantages, and introduces various terrace apartments. It also lists some important points to help you decide whether torent or buy! Back to the overview here: Types of apartments.

Terrace apartment: What is a terrace apartment? – Definition

A terrace is usually sold in the real estate world as the highlight of an apartment. But what is a terrace actually? What criteria must it fulfil in order to be sold as such? Do I have to pay attention to anything special in rental contracts? All these questions will be answered in the following paragraphs!

Are you looking for a suitable apartment – whether as a tenant or investor? Then take a look at our guide to apartment types A-Z!

What criteria must a terrace meet?

The name terrace comes from the Italian language and is derived from “terra”, which means “ground” or “earth”. This meaning of the name sums up the typical characteristic of a terrace: by classical definition, a terrace is at ground level.

“A patio means a ground level space that is exclusively assigned to an adjoining living space, has a hard surface floor covering, and is suitable for the placement of tables and chairs.”

On a legal level, a terrace is defined as just explained. So that you can avoid landlord traps, i.e. not paying for a terrace that may not be defined as such, we have created an overview list that points out the most important aspects:

  • Ground level square
  • Adjoining a dwelling
  • Existence of a solid floor covering
  • It must be possible to set up patio furniture (tables, chairs, etc.).

Classic terrace vs. modern terrace

The classic definition of the terrace clearly limits the creative scope of those. The 21st century has stretched this concept. A terrace apartment does not necessarily have to be located on the ground floor with a terrace at ground level. The following is an overview of the most popular terrace apartment variants:

  • Ground floor terrace apartment with garden
  • Modern architecture with terrace-balcony
  • Dream terrace in the form of a rooftop terrace
  • Roof terrace with view
  • Etc.

Apartment size: Does the terrace count towards the apartment floor area?

The discovery of an apartment including a terrace often triggers feelings of happiness. However, when it comes to calculating the area of the apartment, this often gives way to bureaucratic chaos. Therefore, the following questions often arise: Does the terrace square metre count towards the floor space of the apartment? To what extent must a terrace be taken into account when calculating the living space? Are there legal regulations for this? The answer is yes – there is a regulation, which however does not apply to every terrace variant.

The WoFIV (Wohnflächenverordnung) 2004 has decided that only 25 percent of the terrace floor area is included in the total floor area. However, there are also exceptional cases. Here, processing and location must be taken into consideration. With extremely complex processing and unusually good situation of the terrace up to 50 per cent may be taken into account. This type of calculation is due to the fact that the terrace can only be regarded as a temporary usable area.

Room layout: From 1-room apartment to old building to luxury loft

As clear a definition as the term “terrace” follows, as unclear is the room layout, which goes hand in hand with the terrace apartment. There is no typical scheme here. A terrace apartment is rather an addition to the previously known apartment types. In summary, it can be said that any type of apartment can be a terrace apartment. Accordingly, the room layout varies from property to property. On average, the apartment size in Germany is between 30 and 150 m², whereby the number of rooms usually varies between one and five rooms. Below are a few examples to give you an idea of how a terrace apartment can be divided up in terms of space:

  • 1 room apartment with terrace
  • 3 room old building apartment
  • Terrace and loft apartment

Advantages & disadvantages of a terrace apartment: fresh air vs. hidden costs

At the sound of the word terrace apartment often only the word terrace is heard. Images of boisterous barbecues with friends, cosy dinner evenings and the relaxed summer evening with book and wine in hand spread before our inner eye. However, we mustn’t forget the essentials – the home. With as many advantages a terrace apartment comes with, there is also its counterpart – the disadvantages. Following you will find a list of those two, to be able to make a good judgment!

Advantages: improved quality of life, additional floor space and co.

  • Outdoor area directly accessible
  • Fresh air / nature
  • Improved level of quality of life
  • Additional usable space outdoors
  • Popular usable space for recreational activities

Disadvantages: unsightly view, hidden costs and co.

  • Unpleasant view
  • Hidden costs (terrace area is partially included in the floor area)
  • Increased potential for conflict with neighbours
  • Privacy screens, unsightly cladding, etc.
  • Facilitated burglary in the case of a ground floor apartment

Terrace apartment: for whom it is suitable?

The definition “terrace apartment” says nothing about the apartment itself. Only the possession of a terrace is thereby secured. Apart from this fact, a terrace apartment can range from a 1-room student apartment, to a popular apartment in an old building, to a luxurious loft. Accordingly, a terrace apartment can suit different tenants. Here is a brief overview of which model is best suited for whom!

Families: Terrace as a nature oasis

The terrace apartment can enjoy a steadily growing popularity. Especially in big cities, where hectic, stress and exhaust fumes are part of everyday life, people like to have a retreat in the form of a terrace. Especially small families rent or buy this type of property more and more often. A terrace offers a better quality of life, fresh air, a usually beautiful view and a touch of nature feeling. Perfect living conditions for children and parents in the middle of a big city!

Singles & Students: Terrace as a refuge

Especially among students and singles, the 1-room apartment is a sought-after property. The classic 1-room apartment consists of a living room or bedroom, a bathroom and a kitchen. The value and popularity of the property increases significantly with an included terrace. Fresh air, a retreat from the stress of exams and a possible beautiful view can motivate anew and be an aid to concentration.

Pensioners & seniors: barrier-free, fresh air and a view

A terrace apartment on the ground floor, which can be accessed barrier-free, has established itself as one of the most attractive properties for sale among pensioners and senior citizens. Steps and staircases do not have to be overcome thanks to the ground floor location. An outdoor usable space improves quality of life, invites relaxation and enjoyment, and can function as a gathering place for families and friends. Retirees and seniors often find a patio home the perfect place to enjoy their retirement! Did you know that loft apartments are also ideal for seniors? They are usually single-story and therefore barrier-free.

Buying: What you should consider before buying a terrace apartment

First of all, you have to decide whether you want to buy a modern apartment without renovation needs or an apartment in need of renovation. Then you have to decide whether you want to rent out the property as an investment or use it as your own home. Below we give you some tips to make your decision easier!

Modern new-build terrace apartment or terrace apartment in need of renovation: advantages & disadvantages

The great advantage of a terrace apartment in need of renovation is the relatively low price and the freedom of design. The disadvantage is that you have to add further renovation costs and renovation time to the purchase price. But you can bring your personal taste into your property. Windows, floors and doors can be built in your style and the redesigned room layout can create a new ambience. Furthermore, the laying of pipes and electrical cables is much easier in the course of a renovation.

If you decide on the counterpart of the terrace apartment in need of renovation, the modern terrace apartment, then you must expect a higher purchase price. These terrace apartments are already ready for occupancy and inspire with a positive, energetic balance. There is also room for your individual ideas in the new construction type, but in a more limited variant compared to the terrace apartment in need of renovation.

Terrace apartment: capital investment or home of one’s own

Once you’ve decided on the type of patio home, the second decision is coming up: how to use it! How will your future property be used? Do you want to rent it out on the open housing market and use it as an investment, or move into the four-wall investment yourself?

Checklist: What to consider when buying a terrace apartment

Before buying an apartment – whether a terrace apartment or any other type of apartment – there are a few things to consider. We have summarised these in a checklist for you here, so that you are best prepared when buying your condominium.

  • Value of the land (mostly in € per square meter)
  • Size of the apartment
  • Condition of the apartment (in need of renovation, renovated, etc.)
  • Age of technical installations (heating, water and electricity lines)
  • Location of the terrace apartment (infrastructure, shops, schools, etc.)
  • Income value (for rented apartment)
  • “Risk of loss of rent” must be taken into account!

Rent: What you should consider before renting a patio apartment

Renting an apartment may come with less financial pressure, but not with less responsibility. Starting with the search for the perfect terrace apartment, the rental contract and the tenancy law, it is important to know and comply with any obligations and rights as a tenant. The following gives you an overview:

Viewing appointment, estate agent and co. for a successful rental agreement

Particular caution must be exercised when looking at private advertisements for apartments. Attractive price offers often tempt you and make you quickly overlook the small print in the rental contract. So that you are not surprised by any unwanted costs, we advise you to let an estate agent assist you in your property search. With the help of an agent, you will have access to a large selection of rental apartments of different sizes and price ranges.

Tenancy law: Which apartments are subject to this law?

Many residential tenants assume that all properties are subject to the Tenancy Act (MRG). However, they are wrong. There are numerous exceptions which must be taken into account. Accordingly, it should be a top priority to clarify this before signing the lease. The Landlord and Tenant Act regulates matters relating to the rules on notice periods, fixed terms, deposits, death and similar scenarios. In the case of your future apartment, the MRG may be fully applicable, partially applicable or not applicable.

Tip: Find out how these matters are regulated before you sign the lease.

Checklist: What to consider when renting a terrace apartment

Especially as a tenant, you should always exercise caution and thoroughly check the rental agreement and the property before moving in. To help you do this, we’ve put together a checklist for you here, in which you can tick off individual factors and see at a glance what you should look out for when renting a terrace apartment.

  • Calculate space requirements
  • Room layout (how many bedrooms, bathrooms, etc.),
  • Special highlights (terrace, balcony etc.)
  • Furnished or unfurnished
  • Set the budget
  • Engage a broker
  • Calculate deposit
  • Arrange bureaucratic matters (inform banks, insurances etc.)
  • Report new residential address to the municipal office (within two weeks)
  • Important things to note! ( Heating costs, insulation, rental period, rental contract, etc.).