Multi-family apartment financing for rental - opportunities?

Hello everyone,

I am trying to get an assessment of a project here.

The following situation:

My wife (32) and I (33) live in our own home. It is my parents' house, which was completely renovated. Since I bought it from my parents, the purchase price was below the market price. We have invested around €120,000 in an extensive renovation. I would estimate the currently outstanding loan at about 55% of the market value of the property.

My mother moved into a rental apartment after the death of my father. There may soon be a purchase option for this apartment, and I am wondering whether it is realistic for my wife and me to buy it. My mother would have security and we would have an investment property, as the apartment also completely meets our expectations.

Let's assume a purchase price of €200,000 plus ancillary purchase costs. We could cover the ancillary purchase costs ourselves; the rest would have to be financed.

The household income is around €3,500 net (wife in part-time after parental leave).

How does the bank view the situation because of the existing loan? Is it even worth asking or do we have no chance?

Yes, I do see opportunities there, even though you left out all kinds of numbers. I cannot tell from the text how high your current loan burden is.

But the mother is supposed to continue paying rent, right?
How do you estimate the difference between the net cold rent and the payment for the €220,000?

The current loan burden is a total of €950. However, it is split. The fixed interest period for the KFW part ends in 5 years. For the large full repayment loan, the right of special termination is active at the same time, so it may become cheaper. Due to the long repayment period that is still feasible for us, I do think that the net cold rent and installment can be brought to a similar level. My mother should continue to pay rent.

Well then, off to the financing bank and present your request :=

Due to the long amortization period still possible for us, I do think that net cold rent and installment can be brought to a similar level. My mother should continue to pay rent.

The whole thing can be properly optimized tax-wise within the scope of renting to relatives. For example, the mother could pay you a monthly amount for taking care of her ;-) Accordingly, set the rent low --> results in a loss in the area of V+V...

The whole thing can be properly optimized for tax purposes within the framework of renting to relatives. For example, the mother could pay you a monthly amount for taking care of her ;-)
Set the rent correspondingly low for this --> causes a loss in the area of V+V...

and when renting among relatives, you only have to agree on 66% of the local customary rent in order to be able to claim it for tax purposes. The mother would have to pay less rent on the spot.

The only psychological factor here is that the mother pays off the apartment through her rent.