To buy rented or unrented – this is the question you have to ask yourself when buying real estate. In principle, the difference is whether you want to buy your property for personal use or as an investment. Here we have summarized for you all the advantages and disadvantages of buying rented and unrented property like your first own apartment!
Owner occupation: Unrented for immediate move in
If you buy a property such as a condominium for your own use, you probably want to move in immediately. In this case, it is less worthwhile to buy a property that is already rented. If you buy a property that is rented out at the time, you can terminate the tenant’s lease on the basis of personal need.
Termination for own use
Owners have the right to terminate due to own need, as long as the notice of own need meets all legal deadlines, which are 3 to 9 months. This only applies if you really urgently need the property yourself or for a family member.
Here is a brief overview:
- Termination for own use possible
- Legal deadlines between 3-9 months
- Comprehensible reason (you or beneficiary move in)
Real estate as an investment: Buy rented
Buying rented or unrented always depends on the given situation. There are advantages and disadvantages for both options, which must be considered in the respective situation.
Advantages and disadvantages of rented objects
- No time required for new leasing
- Payment behavior and behavior of existing tenants is known
- Low risk of vacancy at the beginning
- Rental mostly below current market value
- Existing leases must be taken over in most cases
Real estate as an investment: Buy unrented
Again, you will find certain advantages and disadvantages to buying unrented properties. What you end up buying still depends on the circumstances of the property you are buying.
Advantages and disadvantages of unrented properties
- Immediate renovation work possible and deductible
- Market rent for new leases
- Own lease can be used
- Vacancy at the beginning: loss of rent
- Expenses for renovation and new leasing
Conclusion for investors
Decide for yourself which factors add the most value to your goals. Depending on that, an unrented or rented property will fit better into your personal strategy.
Next step: termination of own use