Buy a condominium with 1 1/2 rooms - what to consider

@ nordanney

- Annual net cold rent is € 4000,- but the other abbreviations unfortunately mean nothing to me

@ everyone who responded

- even if the tenant should be terminated, it would always only be a occasional overnight stay possibility within the family/relatives
- I am aware that in this case any return calculation is negative
- service charges only € 15,-, which I have not included in the calculation
- since no viewing has taken place yet, nothing can be said about renovation backlog (on the house) etc. yet
- the tax rate is high
- no loan will be taken for sure because savings are currently only earning 0.1%
- a sale after years would certainly be profitable due to the location

I just wanted to know if 18 years are acceptable!

So €4,000 rent p.a.
From this, non-recoverable operating costs such as costs for property management, account management of the owners' association, reserve formation are deducted (how do you come up with only €15 monthly service charges considering all the possible and actual costs? Something is fishy, the reserves alone must be significantly higher, and a manager also wants to get paid.)

For your (tax) calculation – roughly estimated as the costs should actually be:
Net rent €4,000
Non-recoverable operating costs €600
= liquidity €3,400 p.a., but you also have to regularly keep the apartment in good condition
less taxes (see below) = net profit of €2,215 p.a. = return of 3% on the purchase price including incidental costs (I calculated with €6,000)

Net rent €4,000
less depreciation €780 (estimated)
less costs for the apartment (all non-recoverable costs except reserve formation) €400
= taxable €2,820
of which 42% tax (€1,185) = €1,635 remaining

This gives you a very rough but realistic yield calculation. After 33 years, you have (without paying for maintenance of the apartment or vacancy or anything else) recouped your equity. If I assume that investment interest rates will also rise again within the next 33 years, it will take considerably longer.

Oh yes, if the apartment stands empty permanently – if your son or whoever uses it sporadically – the costs for the apartment (heating, property tax, management, etc.) still apply.

Service charge only € 15,-, which I did not include in the calculation

Per day?

Note: I just now see that you live in Austria. Perhaps there is partially a different tax perspective there. As far as I know, the depreciation period is set at 66.6 years, for example, and not at 50 years as in Germany. But appropriate reserve formation is also legally required in Austria (I would consider this to be between €250-400 p.a., depending on the condition).

it would always remain only an occasional overnight accommodation within the family/relatives

What a crazy idea. Do you even have any idea what kind of organizational effort and ongoing costs are involved with a condominium? For an "occasional overnight accommodation," the effort and benefit are not in any reasonable relation. That's what hotels are for: cleaned and heated upon arrival, fresh towels in the closet, and the bed is freshly made. Breakfast is already prepared the next morning. And the hotel is always exactly where you need it. Plus, you avoid owners' meetings, attending water/heating readings, extra appointments with the tax advisor, continuously accumulating paperwork for utility cost statements, dealing with property management, and so on and so forth.

If you are looking for an investment for your money: okay, then go for it if the location is really that good. But keep it rented out permanently and forget the nonsense about self-use.

And terminating a tenant, is it really that easy in Austria? Even in Germany, proof must be provided, meaning if your son has an apartment, you can completely forget about it.