Finance a house - rent out existing house

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

Hello Milka,

as already described by someone else, the banks refer to actual states, i.e., the transfer to you and your sister must actually be completed in the land register before the rental income of the house is attributed to you.

However, there is also an advantage here if the property to be acquired actually has a separate granny flat for the mother (check/provide certificate of separation!) – then the rent for the mother or the customary local rent can be applied. It is also possible for your mother-in-law to become a partial owner of the granny flat (so-called partial ownership) and thus have her entire income included in the financing. It is certainly advisable to consult a tax advisor for this, because in my opinion you have all the possibilities in the best sense, including the deductibility of renovations and possibly even interest payments.

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

So there are quite a few possibilities that you should explore together with a tax advisor, because this might already determine your search options for the property to be acquired.

Best regards
Dirk Grafe

When I went to my savings bank to inquire about financing, I was asked whether we would build with solid construction or wood, as this factors into the decision. I don’t know if only this one bank considers that or if others do as well. Maybe it's something local because the branch manager had bad experiences with timber frame construction? ? I don’t know. I was simply told there that timber frame construction is expected to have poorer value retention than solid construction.