Financing 3 condominiums - Which offer to choose?

Hello,

this is not about a private house or an owner-occupied condominium, but about three condominiums which are to be fully rented out. Maybe you can still tell me if the conditions are okay so far.

Details about the property: 3 condominiums (33 sqm, 33 sqm, and 50 sqm) including one garage Cold rent total 750 euros/month Purchase price: 99,500 euros plus additional costs (broker etc.) Modernization: approx. 5,000 euros Year of construction of the house: 1960s Condition: well maintained

Details about the person: 28 years old Civil servant 2,500 euros/month net No liabilities (consumer or car loan) No rental costs

I was at Interhyp and Dr. Klein. Of course, it depends on the location, but Dr. Klein did not convince me at all and I had a very informative conversation at Interhyp. I have a certain "basic education" so that I did not go into the conversation naive. After Interhyp found a suitable offer for me, I went directly to the bank to compare. The bank undercut the offer without mentioning the broker. Here are the conditions of the Sparkasse directly:

Interest period: 15 years Loan amount: 110,000 euros Repayment rate: 2% Special repayment: 5%/year (always included) Nominal interest rate: 1.80% Effective interest rate: 1.84 %

Interest period: 20 years Loan amount: 110,000 euros Repayment rate: 2% Special repayment: 5%/year (always included) Nominal interest rate: 2.20% Effective interest rate: 2.25 %

Purchase price including additional costs is approx. 113,000 euros plus modernization costs.

I purposely chose the loan amount (110%) to use as little equity as possible (equity profitability) and because the interest can be fully deducted from taxes. Equity of about 40,000 euros (cash and ETF) is available, but is not to be used. The offer comes from a Sparkasse from a neighboring district. According to the broker, the interest rate would only decrease by 0.15% if 20% equity is used.

What do you think about the above conditions?

Best regards

Sign and draw. 98% of banks will not make you an offer at all.

I have also noticed that many banks drop out at 110%. However, I would not have expected that, as it should not be due to a lack of liquidity. The loan agreement should only be signed shortly before the notary appointment because of the cancellation period, in case the sale - for whatever reason - should fall through shortly before. Therefore, the earliest possible signing is not going to happen, as the notary appointment is only in mid-June, unfortunately. Regards

Strike - actually!

Special repayment: 5%/year (always included)

Do you know what that means?

3 apartments (33sqm, 33sqm and 50sqm) including one garage
Cold rent total 750 euros/month
Purchase price: 99,500 euros plus ancillary costs (broker etc.)
Modernization: approx. 5,000 euros
Year of construction of the house: 60s

What are the 5,000 for? What do you want to do with that amount distributed over 116sqm in three apartments?
You are aware that you have to pay for any "small stuff," right?
Certainly yes. But in my opinion, your income is capable of repaying 100,000 as a loan, but anything beyond that could lead to a liquidity backlog with you in a 60s house.

What about the house itself, what condition other than "well maintained"?

The amount is only for two apartments. The third apartment is rented out and will therefore not be renovated.
These are only cosmetic repairs, i.e. laying laminate, painting doors and walls. In one apartment, a new fitted kitchen may also be installed, as well as a few new fittings in the bathroom.
The work will be carried out by ourselves.
Therefore, the 5,000 euros is the maximum upper limit; I expect less.

Yes, 5% of the net loan amount can be repaid per year.

With the rental income, I am at about 7-8% net rental yield. However, I did not actually want to start a fundamental discussion about real estate as an investment here.

In addition, the three apartments generate about 200-250 euros profit per month, after taxes, which will of course first be saved as a cushion before the special repayment is used.

Where do you live, [zur Miete]?