Securing / Increasing Equity Share for Single-family / Multi-family House through Existing Condominium

Hello and good morning,

we have come across an interesting single-family house in SH.
Almost 9 years ago, we moved into our then newly built condominium in Hamburg, into which most of the equity capital was invested.
This condominium still has approximately 40% of its market value as outstanding liability.

The condominium should be rented out if the case with the single-family house is realized.

Now we are wondering how to set up a solid financing with the existing single-family house and would like to draw on the expertise and competence in this forum.

Is it, for example, conceivable to "re-mortgage" the condominium with the original mortgage amount or possibly have the condominium revalued and accordingly "mortgaged" or use it as security in combination with the purchase of a single-family house/combined?

A revaluation could possibly allow a higher mortgage, which would result in the deduction of interest as well as (increased) depreciation in the case of renting, correct?

What should be considered, recommended in the above cases, what other options exist, and what advantages/disadvantages do they offer?

Best regards from the Hanseatic city

Is it, for example, conceivable to "re"-encumber the condominium with the original amount of the land charge or possibly have the condominium revalued and accordingly "encumber" it or use it as collateral in combination with the purchase of a single-family house?

Subordinated financing can be possible. But 40% of the market value will lean towards 50-60% of the lending value. So for a bank, a collateral value of 0€. Normally, no other bank besides the one currently financing (at a really bad condition) does this. We wouldn’t do it either.
Revaluation by whom? The current bank is not allowed. And whether a new bank will then get significantly better values for you, I question. After nine years, you also have nine years of depreciation behind you and the valuation is done as a used apartment – with all discounts compared to a new building.

Revaluation might possibly allow for higher encumbrance and consequently, when renting out, deduction of interest as well as (increased) depreciation, correct?

Encumbrance possibilities see first answer. Only by the current bank.
Depreciation is calculated on acquisition and production costs. Not on any value you calculate. The bank’s valuation does not interest the tax office. No advantages whatsoever.

What is to be considered, recommended in the above-mentioned cases, and what other options are there and what advantages/disadvantages do they offer?

Two options:
1. Financing a single-family house at the bank that also finances the condominium including cross-collateralization. May help you.
2. Financing a single-family house at another bank. Then the condominium remains only positively listed in your asset overview. But the financing will proceed like any single-family house financing for people who do not own additional property. Equity contribution necessary – in cash.

As already written by Nordanney, the depreciation (AFA) is on the original purchase price and is fixed until the next sale. A new bank cannot go into the second rank as additional security for the new house, at least not with % benefits for you. Therefore, only the current bank remains for you. In the current condominium (ETW), there is already a land charge registered, nothing needs to be increased unless it is decades old.