
Inherited a rented apartment – what now?
Heirs of a rented apartment must agree on how to proceed with the property. If they cannot reach an agreement, the property may be subject to foreclosure. This can result in significant financial losses and should be avoided if possible.
Selling a rented apartment
Communities of heirs often decide to sell a rented property because managing the apartment together is often time-consuming and many heirs lack the necessary expertise. Although a property management company can be hired, if the rental income has to be divided among several heirs, this is no longer worthwhile for many heirs.
As a rule, the sale proceeds of an unrented apartment are higher than those of a rented one, as demand is higher. On the other hand, a rented apartment offers investors the advantage that they do not have to look for a tenant first and can generate rental income immediately after the purchase.
A local quality real estate agent advises communities of heirs on when it is worthwhile to sell a rented property. They also find a suitable investor and sell the apartment at a fair market price.
Re-renting the apartment
If the community of heirs decides to rent out the property, there are a few things to consider. All heirs are equally liable for all costs incurred in maintaining and managing the apartment. The costs are divided according to the so-called inheritance quota. In practice, this usually means that one of the heirs pays the costs and claims them back from the other heirs. This can quickly become expensive for the respective heir. In addition, the income from renting out the property is subject to tax.
Registering personal use
Anyone who wishes to terminate a tenancy agreement for personal use must prove that they have a legitimate interest. This would be the case, for example, if the landlord wishes to use the apartment themselves or can prove that it is needed for their family members or members of their household. Here, too, the community of heirs must be in agreement. In the event of termination for personal use, the statutory notice periods and formalities must be observed.
Are you unsure what you need to bear in mind when selling your condominium? Contact us! We will be happy to advise you.
Further information can be found here:
- welt.de: Expensive renovations are usually not worth the money
- badische-zeitung.de: Optimizing the purchase price through renovation or refurbishment
- handwerksblatt.de: Renovate before selling your property
Notes
For reasons of readability, the generic masculine form is used in this text. Female and other gender identities are expressly included where necessary for the meaning of the text.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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