Buying or renting a property: What is more worthwhile?

What is more worthwhile?

The housing market (+market for investment properties)in Germany is sufficiently saturated and some people have a hard time finding suitable housing at all. In some places, the situation has even worsened to such an end that there is a real shortage of housing. At the same time, of course, the price of housing is rising. If you are looking for suitable objects, you have to prove a long breath in some regions. Before that, however, it is a question of whether you actually want to buy an apartment or a house, or whether you want to rent it. Of course, living for rent also has advantages and disadvantages, as does investing in a property.

Rent or buy property?

Buying real estate is considered a safe form of investment and is also extremely popular. What’s more, the acquisition of property is quite trendy. Especially at periods of low interest rates, many offers from banks seem absolutely tempting. Thus, even families with average incomes can fulfil their dream of owning a home. Instead of renting to a landlord, the costs go into their own home. At the end of the loan term, the property belongs to the borrower. A perfect retirement provision and later secure source of income if you want to become a landlord yourself. Nevertheless, there are many good reasons to remain tenants and tenants. Ultimately, everyone has to make the decision themselves and not everyone has the financial means to finance a purchase.

Individual requirements for rent and purchase

Between 2002 and 2010, the home ownership rate in Germany rose from 7 to 46. This shows that buying property is becoming more and more worthwhile. One in three 40-year-olds said they wanted to buy property, according to a survey by Prognos and the Allensbach Institute for Demoscopy for Sparda banks. Today, people are starting to start buying real estate sooner and earlier. But what is the point of renting? Is there really anything that speaks against buying?

Arguments for renting apartments and houses

Those who rent do not finance their own living spaces, but those of a third party. This means that rent payments for the period of rent of an apartment must be paid and do not pay at some point. However, you are not tied to the property. Tenants can therefore react quite flexibly and move individually. This makes sense, for example, if you have to change location more often due to professional reasons. This is often the case, especially among young people. A permanent and permanent residence for the next 20 years is a great bond and means responsibility.

As a non-owner, you also have nothing to do with the maintenance and maintenance that affects the property. Leaky roofs, full basement rooms, faulty heating systems or non-functioning sanitary facilities? All these problems are not passed on to you as a tenant, but are the responsibility of the landlord. In addition, tenants are not obliged to modernise the living spaces, make them more valuable or otherwise maintain them in a complex way. Tenants only have to comply with the agreed aspects of the lease.

However, home ownership does not only mean the obligation of the property to the property, it also costs additional money. This means that in addition to the running ancillary costs, annual property tax amounts are also incurred. Although these are often transferred to the tenant in the same way, they are in a favorable ratio.

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Good reasons to buy

Landlords are in charge. Whoever owns a property can decide for yourself how to design your own four walls. Similarly, buyers of a property are protected from terminations due to self-requirement declarations. Over the last three years, this has increased enormously, especially in major German cities. Families who want to settle down and have children are very well advised to buy a property.

The rental property

In the tenancy law we find the definition of the term rental object. This can therefore be precisely defined and classified. A rented property can be an apartment, a plot of land, other premises, but also a car or construction machinery. Thus, a property does not always belong in the rental property. Other items and objects can also be rented. From a legal point of view, there is always talk of rental properties at this point.

Contractual regulations of a rental property

A written rental contract is always necessary in order to clarify all the conditions for the lease. Contractual rules must, after all, be respected. In the event of a problem, it is the basis for litigation. Rental contracts are usually always to be drawn up in writing and refer to a specific rental property. Thus, a lease agreement can be concluded between two parties, but this is only valid for the designated rental property.

If a tenant wants to rent something for it, or the landlord wants to rent other land or objects, the lease must be extended with mutual consent. Thus, a tenant of an apartment may get or rent a new parking space or an additional basement room. The contracting parties will then have to agree on which additions will be included in the lease. The start of the rental of the newly added property is also important here. However, a landlord cannot force the tenant to rent. Also, an existing tenant cannot charge a flat rate for the landlord to rent an additional parking space. As a rule, such additions fail because the landlord demands too much additional payment.

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Takeover of a rental property - you as a new landlord

If you’re smart, you’re now investing in real estate. At least that’s how you hear it from everywhere. First the enormous price slide, then the insanely attractive low interest rates. In fact, investing in real estate is consistently interesting, even with average income. Whether a detached house, apartment building or condominium, whoever buys a property takes responsibility. But what is important when taking over a rental property and what exactly does that mean?

You may be living in a rental apartment at the moment, but you have already toyed with the idea of buying it. If the landlord puts this up for debate, price negotiations and some organizational things will follow. At first, this has no effect on the existence of the lease. Rights and obligations shall not be transferred to the buyer until the buyer has been entered in the land register. Until then, the lease will remain in place and the landlord/seller of the property will continue to receive rent.

What tenants and landlords should know

Rents in Germany are currently rising steadily. Predominantly large cities such as Munich or Berlin and Hamburg are affected by increasingly expensive rents. This is not without reason, of course, because living space is not only very popular here, but also scarce. If you are looking for an apartment in these regions, you have to convince yourself. Nevertheless, tenants and landlords have to adhere to certain rules. Thus, not only the tenant has to convince himself, also the landlord must be able to offer something for the money.

Investing in a secure future

The E1 Investments concept offers a proven system for the solid development of a business as a broker and owner of a real estate business. E1 Real Estate has the infrastructure and operating systems that enable us to offer first-class services with a team of brokers. You are investing in the market of the future.

The rental composition

The monthly rental payment to the landlord consists of various components. We are talking roughly about cold rent and hot rent. The latter describes the rent including all incidental costs. The net rent, also called ground rent, consists of the number of square meters of the apartment and the square meter price. Heating and other costs for the apartment are not yet calculated in this sum.

In general, a tenant has to pay for operating and ancillary costs. Many apply property taxes, cleaning costs, caretaker fees or insurance to tenants. If the expenses just mentioned are included in the rent, this is called gross cold rent. This means that operating costs are not billed separately. The net rent means that the tenant should pay a surcharge on the incidental costs.

Rent increase

Those who currently live cheaply for rent will at least partly be afraid of possible rent increases. However, tenants are not simply vulnerable to these increases. Landlords are therefore not allowed to double the rent on a flat-rate basis simply because the apartment has been occupied by the same person for 20 years.

Nevertheless, a landlord can increase the rent after about a year. However, legal requirements must be complied with. It is important that the rent is currently below the local comparative rent. This is also the upper limit for rent increases. Landlords only need to refer to the rent level before a rent increase. It is hardly a problem in large cities, because they issue current figures without any problems. If there is no rental mirror, the landlord must name three apartments, which corresponds to his ideas of a rental payment.

Important: The cold rent may be increased by a maximum of 20 within three years. This is also called a cap limit, which landlords have to adhere to. In Munich, it is currently 15.

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E1 Holding offers location analysis for real estate for almost 100 cities nationwide in all federal states. Our well-trained experts for real estate and investments as well as off-market real estate in various locations and sizes take a professional and authentic look at the real estate market at the respective location. In doing so, we determine realistic and continuously updated real estate prices depending on the market situation as well as a corresponding real estate forecast. We are constantly expanding the list of alphabetically ordered locations and intensively expanding the data base for more and more cities. In addition to investors and investors with budgets of all sizes, our nationwide location analyses are also valuable for housebuilders when deciding on a location. Click here


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