Apartment with large garden in a quiet location

Purchase price for investors 375.000,-- + 20 % VAT. Net rent income: 948,-- per month, leased until 31.07.2027

For marketing, a wonderfully well-divided apartment is being marketed in 3500 Krems an der Donau in Gneixendorf

https://youtu.be/jgKu-1l1KX4

The quick information for busy readers

• Living area of around 92 m2, consisting of - large living room with kitchen/dining area, 2 rooms, 1 bathroom with shower and 1 bathroom with bathtub, toilet and storage room.
• 178 m2 garden
• Parking space optionally available (covered net 15.000,--; open area net 10.000,--)
• Great peaceful location
• Conduit wiring for wall boxes at every parking space

Tax advantages of Vorsorgewohnungen and the formula and steps to calculate the yield

When buying a Vorsorgewohnung for rental, the buyer is treated for tax purposes as a businessperson. Consequently, the paid VAT at purchase can be recovered from the tax office as input tax. Savings approx. € 20.000–60.000, also the VAT on ongoing costs (repairs, administration, operating costs, tax advice etc.) can be claimed as input tax.

Although rental is subject to VAT, the advantages from input tax deduction outweigh it significantly.

The rental income is subject to income tax but can be greatly reduced by:

• Depreciation of the property: 1.5 % annually (on the building value)
• Depreciation of furnishings (e.g., kitchen) over 10 years
• Deduction of ongoing costs such as repairs, administration, tax advisory
• Deduction of interest on external financing

The tax advantage of Vorsorgewohnungen arises not only from the input tax deduction, but also from the ongoing depreciation and deductible costs.

Difference between gross and net yield

gross yield:

To calculate the gross yield: monthly cold rent x 12 months = annual net cold rent = gross yield

gross yield: annual net rent divided by purchase price excluding ancillary costs = gross yield

net yield: Net income and purchase incidental costs are used to calculate the net yield

Annual net cold rent minus:

Maintenance costs (maintenance reserve, repair costs, fees for property management 5% - 10% of annual net rent in new buildings, otherwise more) vacancy risk (vacancy…5% in good locations) (Assumption total maintenance costs and vacancy risk 10% of annual net rent) annual net rent - 10% = net profit

Determine purchase incidental costs:

Real estate transfer tax, notary and land registry costs, broker commission… about 10 %

Calculate total investment:

Purchase price + purchase incidental costs 10%

Calculate net yield:

(Net income / total investment) x 100 = net yield in %.

The depicted pictures may be digitally optimized or virtually furnished. The shown furnishings are not included in the purchase price.

We note that there is a familial or economic close relationship between the intermediary and the third party being mediated.

The intermediary acts as a double broker.