{"id":10707,"date":"2022-11-15T09:50:40","date_gmt":"2022-11-15T09:50:40","guid":{"rendered":"https:\/\/chettioan.com\/?p=10707"},"modified":"2023-01-26T06:55:04","modified_gmt":"2023-01-26T06:55:04","slug":"how-to-finance-a-rented-condominium","status":"publish","type":"post","link":"https:\/\/chettioan.com\/how-to-finance-a-rented-condominium-10707.html","title":{"rendered":"How to finance a rented condominium?"},"content":{"rendered":"<p>We can finance rented condominiums through our loan partners up to a maximum of 100% of the purchase price. In addition it needs however a &quot;reasonable&quot; real estate and above all a good credit standing. Who believes to be able to buy and finance a rented condominium without a minimum of financial reserves is mistaken (even if some self-proclaimed real estate gurus like to claim the opposite).<\/p>\n<p><img alt=\"Financing a rented condominium\" src=\"https:\/\/chettioan.com\/wp-content\/uploads\/sites\/464\/2023\/01\/wie-finanziert-man-45eda4.jpg\" \/><\/p>\n<p>Many banks and savings banks (but not all) have tightened the requirements for capital investors in recent years. Some banks have implemented income limits, while others require a higher surplus in the sog. Budget calculation (= comparison of monthly income and expenses). Besides, banks also have different approaches to rental income and to the sog. Management costs. In practice, this means that banks calculate quite differently for an investor than for an owner-occupier. So it can happen that the financing of an owner-occupied apartment would be possible without any problems, but the banks &quot;shake their heads&quot; at the same apartment as a capital investment.<\/p>\n<h2>How much equity capital must one use?<\/h2>\n<p>If you want to be considered a capital investor, you have to expect to invest your own capital as well (and not just the bank&#39;s). As a general rule, you should pay at least the incidental acquisition costs yourself. Whether and in what amount further equity capital is necessary or. makes sense depends on various factors, for example:<\/p>\n<ul>\n<li>the valuation of the property by the respective banks (if the purchase price is significantly higher than the banks&#39; valuation, more equity is definitely required)<\/li>\n<li>the interest rate conditions for different loan-to-value ratios<\/li>\n<li>one&#39;s own asset situation (there should still be sufficient reserves after using equity)<\/li>\n<\/ul>\n<p>Contrary to popular belief among many &quot;real estate experts,&quot; tax components don&#39;t really play a role in equity investment.<\/p>\n<h2>Do grace loans make sense?<\/h2>\n<p>In old times one financed rented real estates gladly with repayment-free loans. To do this, you took out a loan with a bank, which you then repaid in one sum at the end of the agreed term. For this one has then parallel to the loan usually a capital or Fongebundene life insurance concluded. People were then often told that the return from the savings contracts was higher than the interest on the loan &quot;after taxes&quot;. This was a good deal, but mostly only for the banks or. Agents of such &quot;tax-optimized combination financing&quot;. At the latest since the abolition of the tax privilege for newly concluded life insurance policies, the issue had been settled.<\/p>\n<p>Today, banks usually no longer offer grace loans (except in combination with building savings contracts). When financing a rented condominium, you should expect a minimum repayment of 2% per year (hardly any bank does it below that). In the case of a high loan-to-value ratio or &quot;advanced age&quot;, however, the required repayment may well be higher.<\/p>\n<p>Whether an amortization-free loan in combination with building savings pays off (which can happen), must be considered and calculated individually. Basically, the shorter the total term of the financing, the less such models pay off. This is more a case for long-term financing (20 years and more).<\/p>\n<h2>Speculation period of 10 years?!<\/h2>\n<p>If you resell a property before 10 years have elapsed from the date of purchase, you must generally pay tax on the gain. There is only an exception if you have used the property yourself in the year of sale and the two years before that. The same applies, however, if the property is owned by a dependent relative during this period (z.B. Child) was given free of charge.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We can finance rented condominiums through our loan partners up to a maximum of 100% of the purchase price. In addition it needs however a &quot;reasonable&quot; real estate&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.7.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to finance a rented condominium? - chettioan.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chettioan.com\/how-to-finance-a-rented-condominium-10707.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to finance a rented condominium? - chettioan.com\" \/>\n<meta property=\"og:description\" content=\"We can finance rented condominiums through our loan partners up to a maximum of 100% of the purchase price. 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