Financing Feasibility Single-Family Home Purchase

The house has a basement of approximately 90 sqm. The ground floor has 110 sqm. The attic has an area of 90 sqm. The house is located about 5 km away from WOB. Prices in WOB have risen very sharply over the years! The property is 1,200 sqm in size. The landlord once mentioned a market value of 600,000 euros.

I believe he is overestimating with the 600T€. He doesn't have any land, only a house to offer for 60 years. When I look at the offers around Wolfsburg on the internet, there are one or two houses/terraced houses with significantly fewer catches.

The landlord once mentioned a market value of 600,000 euros.

Let's simply subtract the land value from that, since it is a leasehold. Then we also subtract the value of the right of residence, since this has no value for a buyer, but on the contrary reduces the value of the house. In the end, what remains is an apartment with 110 sqm and the right of use on a rented plot of land. How much do used apartments cost where you are? That already gets close to the real value.

So around WOB I see BRW of ~ 200€/m2 ±100€. With 1200m2 that is 240K€. When guessing further (thanks for reliably providing information), I assume a ground lease of 100 years, starting with the construction of the house, so a remaining term of 70 years and thus a multiplier of 29.12, at the previously mentioned 3% property yield. This results in a market value of the hereditary building right of about 160K€. If the ground floor has 110sqm, I now assume a generous gross floor area (GFA) of 350 m2 (note, GFA is not living space!). According to the cost approach, this results in a market value (2020) of the building of 350m2 * 877€/m2 * 130% = about 400K€. From this, the depreciation must be deducted. For simplicity and rough numbers now linearly (age 30 years, total useful life 100 years) = 30%. That leaves a building value of 280K€. Market value land + building thus comes to (with the assumed data) 440K€. From this must be deducted the value of the right of residence (roughly estimated before at 150K€) and thus a calculated value of 290K€ (all figures rather generous, thus calculated per SELLER). So the owner is not so wrong after all... my gut feeling did deceive me! I had never dealt with market values of hereditary building rights. Here, with the large plot and 3% property yield, there is a "should" of 7200€/year compared to only 1800€ ground lease. This significant difference makes the hereditary building right so "valuable" here.

Thank you very much for the good calculation example. I had not seen it that way before.

I think one shouldn't complicate things overall now either :)

How about 168,000€, which corresponds to about 20 years of cold rent?

I also thought about rent-to-own this morning, forgot to write it down.