Buying an apartment - commission-free and from a private owner

Buying an apartment: A condominium instead of a rental apartment!

Rents have been rising in Germany for years. There is a great desire to own property. This is why many people would like to buy an apartment and switch from renting to owning. This makes the dream of owning your own four walls come true for anyone who does not want or cannot finance a house. But investors are also specifically looking for properties in good locations in order to benefit from rental income. Condominiums are popular in Germany and - depending on the location - are in high demand.

The proportion of tenants in Germany is traditionally very high. The Federal Statistical Office still puts the figure at over 50 percent. However, this rate has fallen slightly in recent years. This means that more and more tenants want to acquire property and buy a house or apartment. As a result, many people are looking for a condominium in their area.

This is because condominiums are more affordable for many of these prospective buyers than a house of their own. As it is a unit within a house, the purchase is somewhat easier to finance. This is particularly true for private offers, as these are commission-free and therefore mean lower ancillary purchase costs.

The decision by calculator: buy or rent an apartment?

Whether buying a condominium nearby or further away is really worthwhile depends on many factors. Your own living situation is particularly important.

Singles in Germany may buy a one-room apartment or a property with two or three rooms. A family with two children is looking for larger properties such as a four-room apartment. Another important factor is that some people like a solid home, others are looking for a loft or apartment, some prefer old buildings, others new builds. The type of potential home can be an impulse to buy. However, compromises almost always have to be made. The personal "dream apartment" can also mean compromises in terms of the exact floor plan, location and furnishings or even individual taste. This is because, although there is plenty on offer, it is not so vast that every wish can be fulfilled.

The market situation, interest rate trends and, last but not least, your own age, assets and income also play a role. Before buying an apartment, it is advisable to carefully examine the advantages and disadvantages compared to a rental apartment. We offer more detailed information and a calculator here. This will help interested parties to decide whether to buy.

Not just for owner-occupation: investors also buy apartments

While many people only dream of owning their own four walls and prefer to buy rather than rent, others are looking for an investment opportunity. They want to achieve a return. Investors therefore use small residential units to rent them out and build up a cash flow. They do not have to limit themselves to condominiums in the vicinity, which means flexibility.

The calculation is simple: as long as the rental income exceeds the expenses, including loan repayments, there is a good return. In addition, a condominium can be sold tax-free as a private property after ten years. With good calculations and suitable properties, this creates an increase in assets.

Despite a dip in prices in the early 2020s, real estate is considered a solid investment that promises long-term profit. This puts them in competition with shares and other forms of investment. Anyone who takes a closer look at the topic and actively improves the property, such as by renovating old buildings, can achieve a very interesting return on equity in good locations thanks to the leverage effect. This is precisely what makes these offers so interesting for investors.

Buying commission-free apartments privately: important details

Owner-occupiers and investors have different perspectives on whether it is worth buying an apartment. Ultimately, however, there are three important criteria that apply equally to all interested parties:

• Condition (including fixtures and fittings, special features and age),
• Price (including ancillary purchase costs),
• location (including future prospects).

Many prospective buyers underestimate the location in particular. While owner-occupiers like to look nearby and neglect the resale value, investors are somewhat more flexible in their search. In all cases, however, the location is a factor that plays a major role in determining the price.

Expensive A-locations and affordable peripheral locations

The so-called A-locations are the most attractive in Germany. A condominium in a city center location in Munich, Berlin, Frankfurt, Hamburg or Cologne is extremely sought-after. Apart from property in vacation hotspots, these are the best locations in Germany for a purchase. Apartments here are marketed quickly, especially if they are in good condition and have been modernized.

This is offset by the price. This is because the most sought-after locations are also the most expensive. It is therefore important to consider whether the outskirts of the city are also good enough. Such B-locations are often even more lucrative in the long term, as the potential for value appreciation can be somewhat greater. Prices are also more moderate. While the price per square meter in prime locations can quickly reach the five-digit range, more attractive prices of around 3,000 to 4,500 euros per square meter are possible in B and C locations.

In the countryside and in smaller towns, on the other hand, low prices of sometimes well below 2,500 euros/m² are tempting. If you don't necessarily have to look nearby, but are open to buying in such regions, you can find a bargain. Especially in structurally weak regions, condominiums can still be surprisingly affordable in some cases. However, they are sometimes difficult to rent out at reasonable prices. The resale value can also fall due to population decline. If you take this risk into account, you can find real bargains in some regions. This is especially true if you do not use an estate agent. Focusing on privately offered properties saves the commission on these offers.

Check before buying a condominium - the special features of the WEG

Buyers should check all relevant details before buying a property. This ranges from the land register entries to the condition of the property and details of building law. In the case of a condominium, there is an additional point. This is because, unlike a house, it is only one of several residential units within a property. There are also communal areas that are used by all owners. The homeowners' association (WEG) therefore plays an important role in the purchase decision.

The other apartment owners may have a veto on certain projects or be able to pass costly resolutions. Prospective buyers should be aware of this. It is worth taking a look at the WEG minutes. There you can read about past disputes, understand the resolutions of the owners' meeting and check the amount and use of the house money. Checking the WEG minutes is a mandatory task for prospective buyers to protect themselves from surprises.

Buying an apartment: Find offers and calculate costs

You can find a condominium, sometimes also abbreviated as an ETW, privately, through estate agents, from housing cooperatives or real estate and construction companies. Sometimes a local authority in your area also sells some properties. We offer you a large number of commission-free properties from private owners on our website. This is particularly attractive. When you conclude a contract, you save a significant proportion of the incidental purchase costs, as no estate agent fees are due.

The costs incurred depend on the property and the purchase price. Add up the typical items as follows

• agreed sales price,
• Land transfer tax (approx. 3.5 - 6 percent depending on the federal state),
• Notary fees (approx. 1.5 percent),
• estate agent costs (up to 7.14 percent, usually shared with the seller).

You should also take into account the property tax (municipal rate), any renovation costs, insurance and the (monthly) house rent to be paid. The exact expenses may include other items and are usually due immediately upon purchase.

Facts: Condominiums in Germany - commission-free offers are attractive

• The tenant ratio is particularly high in Germany, but has fallen in recent years.
• Demand for condominiums is high.
• Investors and owner-occupiers have different priorities when buying.
• Prices depend on the location; cities are more expensive than structurally weak regions.
• Resale value is an important decision criterion.
• The buyer becomes a member of the condominium owners' association (WEG).
• Commission-free condominiums from private owners are particularly attractive.

Buying an apartment: Tips and information on commission-free purchases in Germany

We offer you insights into current trends in rents and prices as well as lots of information about buying condominiums. These resources will help you decide whether or not to buy an apartment:

• Real estate prices for commission-free apartments for sale in Germany
• Current rental prices for comparison in Germany
• Information and guides on the subject of WEG
• Guide to real estate as an investment