You have found a suitable new property or are still looking for one. You are now faced with the question: what should become of my property? Sell or rent? Actually, you are still attached to your old property because you have spent many beautiful hours in it or because you associate a long period of your life with this property. Perhaps you are also more rational and calculate what makes more economic sense. It makes sense to deal with it now that the property is empty! You have the free choice, whether you renovate and rent or look for a buyer, who would like to use this real estate.

Selling or renting - Why do you have to make the right decision now?

It is important that you understand that this decision will not only be made for a few years, but is long-term. If you decide to rent an apartment, you are bound by the lease. It cannot be terminated by you after a certain period of time. Depending on the tenant, it may be that he lives many years in the property and you have no way to change this. On the one hand the tenant has a very strong protection and on the other hand it will be difficult for you to prove a legitimate interest to terminate the tenant. It could be that you want to sell the apartment after 5 years, because you move to another city or because you want to buy something else with the capital. There are many reasons why you want to restructure your assets. It should be borne in mind that nowadays the value of a rented apartment is much lower than that of a vacant apartment. The reason for this is investors who compare the annual rents or calculate yields. To indicate a first value, an average annual factor is 18 - 22 of the annual net rent, e.g. 1,000 EUR monthly rent x 12 months x 18-22 years. That would be with a factor of 20, 240.000,-- EUR. In comparison to the sales case, with a m² price of 4,000 EUR and approx. 90 m² of living space, the value would be 360,000 EUR. In order not to paint the devil on the wall now, it could also be that you get a tenant who does not pay the rent regularly or does not deal properly with their property. That would be the worst of all cases. But the best case would be, everything is going well and you have doubled the value of your property in 20 years, then you could say: "good that I have kept the property". Which steps help to make a safe decision now?
  1. Consider how attached you are to your property and how difficult it would be for you to see your property in an unmaintained condition.
If you should say here, that would be terrible for me, I can only advise you to sell your property to a nice new owner. You then hand over your property to a good successor, who you can imagine will spend the same happy hours with.
  1. Can you face point 1 realistically and say that everything has its time and if something breaks, you can repair it, and then you should consider whether your consideration is economical.
Think about the value of your property in your desired investment period and make a few calculation examples. 3 Weigh up how much time you want to invest to take care of the property. You also have to take care of a rented property. As an owner, you also have obligations that you cannot pass on to the tenant. The first thing you have to do is find a suitable tenant and agree a rental agreement, and then you have to take care of the maintenance, because you can only pass on a few tasks to the tenant. In the case of condominiums, you have to take care of the owners' meetings, etc. This is easy if you live locally, but can be expensive if you live in another city.
  1. Consider the tax aspects and ancillary costs
Rental income is part of the taxable income. Here you should definitely talk to your tax advisor, especially if the property has already been fully paid off. You should also bear in mind that the sale of owner-occupied property is tax-free. However, if you rent it out and then want to sell it after 5 years, the tax advantage will not apply.
  1. On the other hand the additional costs are to be considered. These are for example:
- Reserves and costs for the property management of the condominium - Special payment for maintenance tasks - Own reserves for renovations - Interest on residual financing

How do I come to the right decision for me?

Weigh the pros and cons of the above points. Think about what type you are and decide. I would distinguish three types:
  • Type 1: The emotional type: Here I would advise you to invest your money in something that is not emotionally connected, like a former apartment. You will save time and nerves if you part with your apartment and sell it to a nice new owner.
  • Type 2: The rational type: You should compare income, costs and risk discount and make a decision. In case of a positive return, I always advise you to invest in a property.
  • Type 3: The objective type: Here I advise you to spread the risk. If you have a high-quality and well-equipped property with a value of more than 200,000 EUR, I would include these sales and properties in my portfolio with a value of 200,000 EUR in order to spread the risk over several properties. In the case of a loss of rent, for example, only a part is omitted and not the entire amount. Also a sale could be accomplished in parts.