Ground floor apartment investment with private garden in a quiet location

Net purchase price 379.000,-- + 20 % VAT

The quick information for busy readers.

The property is still rented until 01.08.2027. Net rent 950,-- +10 % VAT + BK

• Ground floor with around 88m2 - open living-dining-kitchen area approx. 35m2, 2 rooms, bathroom, toilet, storage room and entrance hall
• Private garden with around 188m2 - terrace approx.16m2
• Heating: air-source heat pump
• Parking space optional available (covered net 15.000,-- Freifläche netto 10.000,--)
• Conduit for wall boxes at each parking space

The detailed description:

The new-build apartment is located on the ground floor of a four-family house and offers 2 centrally walk-in bedrooms – a large open living-dining-kitchen area with large terrace doors and windows.

Tax advantages of retirement investment apartments and the formula and steps to calculate the yield

When purchasing a retirement investment apartment for rent, the buyer is considered an entrepreneur for tax purposes. Therefore the paid value-added tax at purchase can be reclaimed as input tax from the tax office. Savings approx. € 20.000–60.000, also the VAT on ongoing costs (repairs, administration, operating costs, tax consulting etc.) can be claimed as input tax.

Although rental is subject to VAT, the advantages of input tax deduction outweigh this clearly.

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 the 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 retirement apartments arises not only from the input tax deduction, but also from ongoing depreciation and deductible costs.

Difference between gross and net yield

Gross yield: Determine gross yield by calculating: 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: Determine net income and purchase costs to calculate the net yield

Annual net cold rent minus:

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

Calculate purchase-related costs:

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

Calculate total investment:

Purchase price + purchase-related costs 10%

Calculate net yield:

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

We would like to point out that there is a familial or economic close relation between the broker and the third party being mediated.

The broker acts as a dual agent.