Finance a house - rent out existing house

The location of the property is also important to the bank! It will be very difficult in the last village. Closer to the city is already better. (Wenn es insgesamt knapp kalkuliert ist)

The bank also cares about the location of the property!
In the last village it will be very difficult. Closer to the city is better.
(If it is overall calculated tightly)

What does that have to do with city or village? Either you have the money or you don't.

The bank also cares about the location of the property!
In the last village, it’s very difficult. Closer to the city is better.
(If the overall calculation is tight)

What does that have to do with city or village?
Either you manage clearly or you don’t, that can be here or there.

Wrong, it even matters whether you build solid or timber frame construction! If you want to live out your dream of a luxury apartment at the last minute, it can happen that the bank does not cooperate. After all, no one would buy the house anymore and the bank would have a problem if the builder stops paying back. The energy standard (Passive house / Kfw 40/55) is also advantageous to justify the high financing amount, as it is a sustainable investment that plays an important role in the sale. You can see it with cars, hardly anyone buys all the gas guzzlers on the used market.

Hello Milka,

as someone else has already described, the banks refer to ACTUAL conditions, i.e., the transfer to you and your sister must actually be completed in the land register before the rental income from the house is attributed to you.

However, there is also an advantage at this point if the newly acquired property actually has a separate granny flat for the mother (Check/present [Abgeschlossenheitsbescheinigung]!) - then the rent of the mother or the local customary rent can be applied. It is also possible that your mother-in-law becomes a co-owner of the granny flat (so-called partial ownership) and thus her entire income can be included in the financing. For this, it is definitely advisable to consult a tax advisor, because in my opinion you have - in the best sense - all options, including the deductibility of renovations and possibly even interest payments.

Also possible are usufruct agreements, i.e., you are the owners and your mother receives, for example, a lifelong right of residence.

So there are relatively many options that you should explore together with a tax advisor, because afterwards your search options for the property to be acquired may be directed/can be directed accordingly.

Best regards Dirk Grafe

What does that have to do with city or village?

Wrong,
it even matters whether you build with solid construction or timber frame construction!

If someone wants to fully live out their dream of a luxury apartment, it can happen that the bank does not cooperate.
After all, no one would buy the house anymore and the bank would have a problem if the builder no longer pays back.
The energy standard (passive house / Kfw 40/55) is also an advantage to justify the high financing amount, as it is a sustainable investment that plays an important role when selling. You can see it with cars, hardly anyone buys those gas guzzlers on the used market.

However, some differentiation is necessary here.
Yes – the bank pays attention to whether the purchase is made in the village (beyond the mountains with the seven dwarfs) or near the city.
However, this aspect should also be reflected in the price of the purchase object. Usually, the house in the village would be significantly cheaper than near the city.

The bank would probably only intervene if the price in the village was overpriced and thus obviously the loan or the potential realization result (in the worst case) would not be sufficient to secure / redeem the debt. This note is usually given before the loan agreement and should also be observed, otherwise one would probably buy a completely overpriced property.