Financing an owner-occupied apartment for rental

As already mentioned, purchase price = value = lending value of the property

For you, is the lending value = market value? And does the supervisory authority allow that? That is actually a massive violation if you proceed like that based on the lending value. According to PfandBG, BelWertV and CRR, that is not permissible at all...

The purchase price per sqm is usually significantly above 6.3k€ per sqm in Haidhausen. Especially if after renovation 22 to 25 € are possible here. In good condition, prices currently tend to be around 10k. Therefore, a real bargain.

That's why it's a real bargain.

In that case, if I were you, I wouldn't buy the apartment for renting out either, but would negotiate directly with owner-occupiers. You can't make money faster and better as a landlord. And you also save yourself the stress of being a landlord.
1/4 million profit in a few months

Hello everyone,

thank you for your diverse responses.

The €25k do not fully increase the value of the apartment - existing bathroom or existing floors, for example, are being torn out.
Calculate €385k purchase price + €15k value increase = €400k apartment value. The bank usually deducts a 10% safety margin to arrive at a mortgage lending value = €360k apartment value for the bank.

Thank you, in my world the safety margin was missing.

As already mentioned purchase price = value = mortgage lending value of the property. We assume 50% of the proven renovation as value-enhancing. I see financing alone as critical with that income. We would at least recalculate the net income with tax class 4. €4,800 net with or without private health insurance? As an employee at a hidden champion in Munich rather a small income. I also have a hard time endorsing something like this if someone does not acquire property themselves and throws away €2,800 rent themselves.

Thank you for your note on the 50% assumption of renovation costs.

Could you briefly explain what you mean by the sentence "I also have a hard time endorsing something like this if someone does not acquire property themselves and throws away €2,800 rent themselves"?

The purchase price per sqm is normally significantly above €6.3k per sqm in Haidhausen.
Especially if €22 to €25 after renovation are possible here.
In good condition, around €10k are currently being asked here.
Therefore a real bargain.

That cannot be true, other forum members have already worked out that such bargains do not exist.

Then I would not buy the apartment for rental in your place, but rather negotiate directly with owner-occupiers. You cannot earn money faster and better as a landlord. And you also save yourself the stress of being a landlord.
A quarter million profit in a few months

What can I say, I like the apartment and I have always seen the potential in it and would like to keep it in my life. Nevertheless – how does one "negotiate through" a property?

Best regards

TwistedHead

For you, is the lending value = market value? And the regulator is okay with that? That is actually a massive violation if you proceed like this using the lending value. According to PfanBG, BelWertV, and CRR, this is not permissible at all...

Man, sorry, I haven’t been in ops for a long time.

Of course, we also do internal valuations. I meant market value in terms of determining conditions. Every institution does this simplified calculation for interest rates.

In reality, at the moment, every object bought for 100k is only worth about 75k or so (exaggerated, of course).

Can you briefly explain to me what you mean by the section "I also find it difficult to approve of something like that when someone doesn't acquire property themselves and throws away 2,800€ in rent"?

Well, just as I wrote it. Your income is 4,800 net with 2,800 rent. OK, your partner also has a good net income.

Still, from the total income you pay a very high share in rent. Sure, the apartment will certainly be too small for 3 people, hence moving out.

Regarding the "bargain", it’s rare but ... I hope his family doesn’t catch wind of it.