Geld. Leben. Looman.: Warum Sie sich den Kauf einer Ferienwohnung dreimal überlegen sollten

Moin liebe Landratten! If you are considering purchasing a vacation apartment, especially one on an island in the North Sea or along the Baltic coast, this article is for you. I urge you to read it with great attention, as it may help you avoid a costly mistake. Curious? Please sit back and consider the following case.

I recently spent the weekend on Wangerooge and was drawn to the storefront of a Wuppertal real estate agent. He boasted about an "immovable jewel" with the words "more sea than you can handle." He offered a stunning video, making it easy to fall in love with the property. The sum total cost, including usual delivery and transfer fees such as land transfer tax, real estate agent commission, and notary fees, amounts to 1,200,000 Euros. Is such an investment worth 1,100,000 Euros for an 87 square meter three-bedroom apartment?

Consider whether you would spend such a large sum on a 1,200 square foot apartment. Please, don't be envious! There are people who swim not only in the sea but also in money. They have the means to spend 1,200,000 Euros on such an apartment and also spend a fortune on renting these dwellings annually. 60 days for Easter, one month in the summer, and 14 days over Christmas and New Year's.

Emotional aspects of the vacation are just as important as the financial ones. The property, if used solely for personal purposes, is a disaster financially and a gamble if rented out to others. Can you really believe that? Do the math for yourself, for example, over a period of ten years: The starting price is 1,200,000 Euros. The returns are the "saved" rents.

Apartments of this type in such locations cost around 500 Euros per day during peak season. Consequently, the returns for ten years amount to ten times 30,000 Euros, or 300,000 Euros. The net cash flow is rounded off by the terminal value. The property is 25 years old, so I am skeptical about whether the value will continue to rise.

Minimal interest rates If the apartment is sold for 1,100,000 Euros in ten years, the return would be 1.73 percent per year. If the rents increase by two percent each year and the value of the property increases by one percent, the annual return would be 2.84 percent. That is a bit suspicious, isn't it?

In both cases, investing 1,200,000 Euros over ten years in bonds and stocks would be more advantageous. I estimate a yearly interest rate of five percent for this, minus a 26.375 percent tax deduction. The funds are needed to pay for the 30 annual stays, which start at 30,000 Euros and increase by two percent each year. If the figures are correct, the investment in securities would be worth 1,336,000 Euros in ten years, making the investor better off with the rental income.

Now, I can't deny that some may argue that vacationing in your own home is not comparable to staying in someone else's. I'm happy to hear that! However, I wonder if it is truly necessary to buy thirteen cows and run a dairy when you only want to enjoy a glass of good milk occasionally. Nonetheless, we must examine the numbers when the apartment is additionally rented out 90 days per year, for example, in June, July, and August.

Additional revenues of 45,000 Euros per year are expected. These are subject to full income tax. In return, the owner can depreciate the building structure. If the apartment is used for 60 days and rented out for 90 days, the ratio is 40 to 60 percent. Consequently, three-fifths of the building value (720,000 Euros) can be depreciated over two percent per year, reducing taxable income by 8,640 Euros each year.

The payment plan for the "mixed" property starts at 1,200,000 Euros. The annual returns initially amount to 75,000 Euros, minus maintenance and administrative costs. I estimate 25 percent of the rents, which reduces the returns to 56,250 Euros and increases them by two percent each year. Don't forget to consider the tax implications.

They begin at 16,000 Euros and rise to 20,000 Euros by the end of the rental period. With 1,100,000 Euros, the property has suffered significant wear and tear due to the many guests. This results in a return of 3.67 percent per year, which is excellent but does not exceed the interest on the deposit. Please also consider the emotional costs.

You are buying an apartment that you will use for at least 60 days every year and must leave to others at least 90 days a year. Do you really want to travel to an island in the North Sea every year until 2038? Or do you want to return to Heringsdorf to lounge in Kaisers bathtub again? Do you really want to constantly interact with strangers who will be living in your beautiful home? And please don't forget that you are part of a homeowner association.