Renovation is often expensive, but can be worthwhile when selling the property due to a higher purchase price. It depends on the individual case and should be assessed in advance by a professional.

What to do when there is a backlog of renovation work?
Nils H. (75) owned an apartment building in a medium-sized German city. He inherited it from his father many years ago. Nils took care of everything he could. If something was broken, he had it repaired immediately. He always had an open ear for his tenants' concerns. There was only one thing he neglected: renovation.
When repairs pile up
In recent years, repairs had become increasingly frequent. The roof had to be patched up more often. Some doors and windows had warped over the years, making them difficult to close. Some of his tenants heated their homes with 25-year-old gas boilers. Almost once a quarter, water had to be added to the individual heating systems. In the end, his insurance company even threatened to cancel his coverage.
What needs to be renovated?
Nils was forced to decide to tackle the renovation. He sought advice from a renovation expert. The expert inspected the property and listed all the defects and deficiencies for Nils. Nils had read that, according to an EU directive as part of the "Fit for 55" program, the buildings with the worst energy performance, energy efficiency class G or H, must be renovated by 2030. As this was the case with his house, a thorough renovation was also required to bring it up to the low-energy standard of an existing residential property.
Will the financing work out?
The costs for all the renovation measures were considerable. The renovation work that had accumulated over time, plus the comprehensive energy renovation, meant that the costs significantly exceeded the maintenance reserves he had conscientiously saved up over the years. So Nils went to the bank to take out a loan for the upcoming renovation work. Due to his advanced age, the bank did not grant him the loan.
If the renovation doesn't work out
Nils didn't know what to do and considered selling the house. He turned to us. We gave him comprehensive advice on his property. At first, he was shocked at how much his house had lost in value due to the renovation backlog. This is because a buyer would factor these renovation measures into the purchase price. We advised him to carry out renovation and modernization measures with a view to the future. These would increase the value of his property before the sale. Nils' savings were sufficient to cover this. Through our network, we also found an investor with experience in renovation who bought Nils' apartment building at a fair market price. In the end, Nils was happy with the solution he found with us.
Are you unsure whether renovation will increase the value of your property? Contact us! We will be happy to advise you.
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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