Vorsorgewohnung yield 4,7 percent in Gneixendorf

The apartment is rented on a fixed-term basis until 31.03.2028 NET rent 900,-- Investor price: 229.000,-- +20 % VAT

The quick information for busy readers

• 1st floor with about 64m2 - open living-dining-kitchen, 1 room, bathroom, toilet, storage room and anteroom
• Balcony 5m2
• Heating: air source heat pump
• https://youtu.be/jgKu-1l1KX4

Both the construction company as well as the interior fit-out were carried out by regional craftspeople. The covered parking space can be purchased at a surcharge of net 15.000 Euro, the uncovered parking space for net 10.000 Euro.

monthly costs incl. VAT

• Operating costs 97.89
• Lift operating costs 52.04
• Heating costs 78.34
• Reserve 37.08

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

When buying a retirement apartment for rental, the buyer is legally treated as an entrepreneur. Therefore the paid value-added tax at purchase can be reclaimed from the tax office as input tax. Savings approx. € 20,000–60,000, also the value-added tax on ongoing costs (repairs, administration, operating costs, tax consulting, etc.) can be claimed as input tax.

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

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

Depreciation of the property: 1.5 % annually (on the building value)

Depreciation of fittings (e.g., kitchen) over 10 years

Deduction of ongoing costs such as repairs, administration, tax consulting

Deduction of interest on external financing

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

Difference between gross and net yields

gross yield:

Compute gross yield: monthly cold rent x 12 months = annual net cold rent = gross yield

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

net yield: Determine net income and purchase-related costs to calculate net yield

Annual net cold rent minus:

Maintenance costs (maintenance reserve, repair costs, fees of the property management 5%-10% of annual net rent for new buildings, otherwise more) vacancy risk (empty, arrears… 5% in good locations) (Assumption 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's commission… about 10%

Calculate total investment:

Purchase price + purchase-related costs 10%

Calculate net yield:

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

The shown furnishings are not included in the purchase price.

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.