Is taking out a loan for renovation worthwhile?

  • Erstellt am 2024-07-03 11:53:17

nordanney

2024-07-04 08:01:07
  • #1
This comes from several angles. It starts with supervision and reporting obligations regarding ESG, goes through green covered bonds as well as the valuation (already massive write-downs today, which will increase further) of the properties (e.g., keyword: stranded assets in commercial real estate, but it is also a portfolio management issue) and ends with the management’s desire to actively promote ESG development. Professional developers and portfolio holders have been interested in this for a longer time. KfW55 residential complexes are hardly marketable today; only KfW40 is built and traded (in the new construction sector). Every professional already assumes that even KfW55 will only be sold with discounts in 10 years. Who knows what politics will mandate next. In the Netherlands, for example, offices with energy efficiency worse than C are no longer allowed to be rented out as of today. From 2023, energy efficiency A must be present for rental (equivalent to a D here).
 

Tassimat

2024-07-08 14:42:21
  • #2
Besides what has been mentioned, it is important how old the house is and what else needs to be done and renovated. Now or in the next xx years. For example, if the roof is already leaking, then insulate it as much as possible immediately. Renovate everything properly at the beginning. I did that too, and after the loan is approved and you move in, you no longer think about financial feasibility. What you don’t do before moving in, you never do again. A house that is not insulated now, what condition will it be in 30 years? It might fall into disrepair and possibly become a candidate for demolition due to tougher political circumstances. The total value then is the land price minus demolition costs in the very worst case. You can do that if the house is already practically given away. But is that how you want to live? Don’t you have higher standards in your own home than in a rental property?
 

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