Assessing the price of an apartment house correctly
In a series of articles, we provide tips and considerations for those who want to or need to sell their apartment house or rental house, i.e. a multi-family house, or are basically considering such a thing. Even though we are real estate trustees in Austria, our tips apply generally in German-speaking countries for anyone selling an apartment building.
It should also be noted that we also offer a free initial consultation on the topics presented.
How to correctly assess the value of your apartment building and achieve the best sales price
Are you unsure how much your apartment building is really worth? Many owners ask themselves how they can achieve the maximum selling price for their property. An accurate estimate is essential for sellers to be sure that they are getting the most out of their sale.
Challenges in pricing
Valuing an apartment building is a complex task that takes into account both objective and subjective factors. To carry out your own price analysis, you could:
Research similar real estate offers in your area on online platforms
Obtain non-binding price information from real estate agents
Researching purchase transactions in the land register
However, many sellers find this process challenging as the research effort is high and the available data is often not transparent. Many properties are not listed online, especially those that are harder to sell and tend to fetch lower prices.
Tip
To obtain reliable results, it is advisable to consult an expert. A professional who is familiar with the apartment building market segment can analyze your property in detail. This includes assessing the location, condition and potential of the property and comparing it with recent transactions in the area.
Our offer at SUNSET IMMOBILIEN: We at SUNSET IMMOBILIEN offer you this expert service free of charge and without obligation. Contact us to receive a well-founded assessment of your apartment building and secure the best sales price.
Or would you first like some non-binding and free advice on your apartment building? For example, to assess the value of your property?
How to market an apartment house professionally
Tip: How to market an apartment house professionally
In a series of articles, we provide tips and considerations for those who want to or need to sell their apartment house or rental house, i.e. a multi-family house, or are basically considering such a thing. Even though we are real estate trustees in Austria, our tips apply generally in German-speaking countries for anyone selling an apartment building.
It should also be noted that we also offer a free initial consultation on the topics presented.
How you can best market your apartment building professionally
Introduction
The sale of an apartment building is quite a big decision in the life of an owner. This makes it all the more advisable to have an expert at your side. We support our clients with our detailed knowledge, network and profound market expertise. And last but not least with our passion for real estate and apartment buildings in particular.
The possibilities at a glance
When buying real estate, and this is not much different with interest and rental houses, it is always about emotions in addition to the objective facts such as size, location, equipment. A prospective buyer's first impression of the house is decisive for his willingness to buy and his decision-making process. Just like us, you as a seller should also pay attention to a convincing appearance of your property, such as clean access paths and staircases, well-kept exterior surfaces, doors, ceilings, walls.
Visualization for construction projects
Digital marketing
Today, it is essential to offer a whole arsenal of digital marketing:
professional exposé and photos
Own website for the property
Wrap-around videos and 360-degree virtual tours
Home staging
You can also find out more about our digital marketing offering here '
Tip
It is highly recommended to have your property put in perspective by a professional. Our service for apartment buildings, for example, includes all the above-mentioned marketing tools at no extra charge.
Would you like to receive free, non-binding advice on your apartment building?
Then simply contact us.
How to find suitable buyers for your apartment building
Tip on how best to find suitable buyers and interested parties for your apartment house or multi-family house
In a series of articles, we provide tips and considerations for those who want to or need to sell their apartment house or rental house, i.e. a multi-family house, or are basically considering such a thing. Even though we are real estate trustees in Austria, our tips apply generally in German-speaking countries for anyone selling an apartment building.
It should also be noted that we also offer a free initial consultation on the topics presented.
How to find suitable buyers for your apartment building
The (theoretically) easiest way
The simplest thing is: you find a buyer in your own circle of acquaintances who will pay you a good price. What is an objectively good price can be provided by an expert evaluation - as explained in one of our previous episodes.
The usual way
Usually, potential buyers have to be found externally in the market. And these are typically wealthy individuals and families, professional investors, foundations and companies. We deal with this wealthy clientele on a daily basis, and many of them are also regularly interested in apartment buildings and rental houses as investments. We can therefore put you in touch with potential buyers. In addition, we screen prospective buyers, so you don't run the risk of "real estate tourists" or dubious prospective buyers looking at your property.
Apartment house online?
You should not simply put the house online on one or even several real estate platforms. Firstly, you will receive countless enquiries from brokers and questionable prospective buyers with unclear creditworthiness. Secondly, interest and rental houses that are put online are considered "second choice" properties that could not be sold "offmarket" before and had to be put online now.
Tip
Make absolutely sure that the offer of your property is first placed discreetly in the right groups of buyers. And not placed online, at least not initially. We at SUNSET IMMOBILIEN can support you in reaching the right clientele or potential buyers.
Would you like to receive free, non-binding advice on your apartment building?
Then simply contact us.
Sell or keep an apartment building?
In a series of articles, we provide tips and considerations for those who want to or need to sell their apartment house or rental house, i.e. a multi-family house, or are basically considering such a thing. Even though we are real estate trustees in Austria, our tips apply generally in German-speaking countries for anyone selling an apartment building.
It should also be noted that we also offer a free initial consultation on the topics presented.
Sell or keep an apartment building?
In our blog series, we offer valuable tips and considerations for owners who are considering selling or keeping their apartment building. Our expertise as real estate trustees in Austria informs every piece of advice we give - and this applies not only to Austria or your apartment building in Vienna, but to the entire German-speaking region. Whether you want or need to sell an apartment building, we will support you with our in-depth knowledge.
Selling an apartment building: Reasons and possibilities
There are many reasons to sell an apartment building or rental house: from personal life changes such as divorce or inheritance to financial bottlenecks or the desire to retire from management. Selling an apartment building in Vienna can provide relief, as the operation is often costly and time-consuming, including refurbishment, loss of rent, and extensive administrative work.
On the other hand, selling an apartment building is not always the best option. Apartment buildings, especially historic buildings, can be a stable investment, especially in uncertain economic times. Many tasks can be outsourced to specialized service providers, allowing you to continue to benefit from the increase in value.
Flexible sales strategies for your apartment building in Vienna
Partial sale: Sell parts of the house, keep your own apartment or offer it for rent. This requires the establishment of condominium ownership and a clear regulation of future costs.
Right of residence: A permanent right of residence entered in the land register secures you lifelong living without further costs.
These considerations show: Careful planning and advice are crucial. Our experts for the sale of apartment buildings and rental houses in Vienna are on hand to help you make the best decision.
Our customized service on site: Sell your apartment building in Vienna in Vienna
Would you like to find out more or take advantage of a free initial consultation on the sale of your apartment building in Vienna? Contact us today and secure professional support for the sale of your apartment building in Vienna.
Or would you like some free, no-obligation advice on your apartment building? Or would you like an estimate of the value of your apartment building?
Then simply contact us.
The end of the AirBnB business model in Vienna?
Austria's vibrant capital, known for its cultural diversity and historical significance, is about to undergo a significant change in the real estate world. Vienna's building regulations have undergone an overhaul that will come into force on July 1, 2024 and is particularly important for commercial landlords. This change aims to significantly transform the landscape of short-term rentals, especially models such as AirBnB.
The answer to the question in the title is therefore "YES": for commercial landlords such as apartment building owners, foundations and larger family estates, the model of renting out all or the majority of a building in the short term is therefore probably obsolete. Private landlords (of individual apartments) will have to apply for a permit in future, but this will be approved if the following conditions are met:
Restrictions for short-term rentals
The new regulation stipulates that the permissibility of short-term rentals - a practice made popular by platforms such as AirBnB - is now subject to stricter conditions. From July 2024, such rentals outside of residential zones will only be possible with an exceptional permit. This permit will be issued under the following conditions
Location of the dwelling: The dwelling in question must not be located in a residential zone or in areas such as "grassland - recreation area - allotment garden area" or on land temporarily used for allotment gardening.
Financing: No housing subsidies may have been used for the construction of the apartment.
Residential use in the building: The majority of the apartments in the building in question must continue to be used for residential purposes.
Commercial use limit: No more than 50% of the building's usage units may be used for commercial purposes for short-term accommodation.
In addition to the public law permit, it is important to note that the permissibility of short-term rentals also depends on private law requirements, such as the condominium agreement or the rental agreement.
Impacts and adaptation strategies
This change poses a significant challenge for commercial landlords. Many have relied on the AirBnB model to maximize their income or have specialized in this segment as property developers. It is now time to adapt business strategies and develop alternative use concepts for real estate. Possible adaptation strategies could be ...
to only search for individual apartments or floors of apartments and put them together in a portfolio so as not to exceed the above-mentioned hurdles.
to switch to renting larger premium/luxury apartments, because many high-income earners cannot afford to own, but can afford to rent, and where the rent cap of the Rent Act does not apply (currently and probably also in the future), and therefore good returns can be achieved
Alternatively, invest in financial investments such as high-yield bonds or equity funds, which yield higher returns than Viennese real estate
Conclusion
The amendment to Vienna's building regulations is a clear sign that the city administration is taking the long-term quality of housing and the protection of residential zones seriously. Commercial developers and landlords of affected properties must now adapt to changing market conditions and proactively look for alternative solutions as outlined above.
This article provides an overview of the upcoming changes to the Vienna Building Code and their impact on the short-term rental business model. It is recommended that you seek further information and professional and legal advice to make the best possible decisions for your real estate investments.
History of the Viennese apartment house
Introduction
Read in the following about the historical development and the special characteristics of Vienna's apartment buildings, buildings that have had a significant impact on the city since the Gründerzeit in the 19th and early 20th centuries and continue to do so today. They not only served as drivers of the Viennese building boom of the time, but also represented a safe investment, a characteristic they have retained to the present day.
About the origin
The time of the founders was an era in which the upper middle class experienced its heyday during liberalism. This period was also formative for Vienna's development into a global metropolis. A new type of entrepreneur emerged, halted only briefly by the stock market crash of 1873. This new class of citizens took over many of the functions of the nobility in business and politics. The Gründerzeit is divided into three phases:
the early founding period (ca. 1840-1870)
the high founding period (ca. 1870-1890) and
the late founding period (ca. 1890-1918).
The origin of the apartment houses lies in the rapid population increase triggered by industrialization. There was an extensive rural exodus, including the Jewish population from the provinces of the Habsburg monarchy, who settled in what was then the capital of the empire and the city of residence. Around 1800, about 250,000 people lived in Vienna. Around 1910, Vienna reached its highest level ever, with over two million inhabitants. This considerable increase led to an urgent need for housing in the capital.
An additional factor in the emergence of the apartment houses was the dissolution of traditional social ties within large families and between employers and employees. There was, however, one exception to this rapid population growth: in contrast to the other districts, the population in the inner city declined in the second half of the 19th century. The intensive building activity in the city center had representative reasons and was not aimed at creating living space, as was the case in other parts of Vienna.
This is also reflected in the differences in architecture: while the residential palaces, designed by leading artists of the time, had a sophisticated character, the apartment buildings in the outer districts were rather modest in their architectural design.
Early Founding
From the 1840s, the area around the old suburban barracks experienced a building boom, with residential buildings taking center stage. With the demolition of the city walls, construction began to intensify, which is referred to as the Gründerzeit proper. The originally dominant elongated parcel form was increasingly replaced by more compact, square-looking forms. Residential complexes were then built on these plots along the streets, while elongated plots were used more for side-wing buildings.
Outside the city limits, the building heights were rather limited. The approximately square and elongated floor plans borrowed from suburban building traditions. Nevertheless, the distribution of space inside was subject to considerable change over time. Away from the so-called "householder's floor", residential units consisting of room and kitchen or room, kitchen and a small chamber were created, arranged along an elongated corridor. This optimized the utilization of living space. A special building phenomenon of the early founding period were the "pseudo residential courtyards", which were created by the mirror-symmetrical connection of two side-wing houses on double plots.
Rapid population growth led to the development of large tenements in the suburbs, with buildings of up to four stories being erected from 1850 onward. A striking feature of the tenements from the early Wilhelminian period was their plain and uniform facade, which hardly varied in accordance with the principle of "evenly spaced rows," thus forming contiguous, almost unstressed street walls.
High Founder's Era
The high founding period, which lasted from 1870 to 1890, marked a striking stylistic change: inspired by the new monumental public buildings along the Ringstrasse - including museums, the parliament, the city hall and the university - private builders adopted forms of state representation. Although the buildings remained relatively uniform in design and organization internally, great attention was paid to outwardly individual design.
Most of the historic bank and stock exchange buildings in Vienna were built from the beginning of the 20th century, and the design of the shopping streets experienced its zenith in late historicism. Typical stylistic features were the pronounced articulation of the building bodies, sculptural decoration and the connection of several floors by protruding columns on the facade. Although the wide range of industrial mass-produced products offered many design possibilities for facade elements, the extensive repetition of similar elements led to a certain monotony in the streetscapes. The facade ornamentation, which was often criticized at the time, represents a typical Viennese phenomenon - nowhere else in Europe were they executed so magnificently, even on simple residential buildings.
Despite the formative role of Art Nouveau for Vienna in other areas, it was not quite as significant for residential construction. It was seen more as a style of the avant-garde, of the progressive bourgeoisie and of public urban buildings.
The architecture of this era was determined by two aspects: Representation on the one hand and the most profitable use of expensive building land on the other. Monumental buildings with facades in the style of the Italian High Renaissance illustrated an "ennoblement" of the tenement house into a residential palace. At the same time, the typical Viennese villas of the Gründerzeit were built in the more distinguished suburbs. In contrast, the building codes of 1870 and 1883 allowed the construction of buildings with five stories including first floor and mezzanine and a maximum height of 25 meters, provided the street width permitted this.
Late Founding Period
During the second urban expansion around 1890, the so-called "belt" was laid out in Vienna and the integration of the suburbs into the urban fabric continued. A significant increase in land prices accelerated the use of available space, which, however, was often associated with a decrease in the quality of living. The reduction of staircases led to the creation of overlong corridors, and the area of the main courtyards decreased in favor of several small atria to locate ancillary spaces, such as cabinets and toilets.
The priority was to maximize the use of the land. The 1895 building code allowed for a reduction in yard size to 15 percent, which essentially meant that almost the entire lot could be built on. Small atriums and ventilation shafts had to be sufficient to provide daylight and fresh air to the interior cabinets and ancillary rooms. Inside the buildings, status distinctions diminished: The social significance of floors was offset by the introduction of elevators in upscale tenements; the importance of an apartment's location within the building also became less relevant.
A distinctive feature of the late Wilhelminian period was the double tract, which could also be coupled several times in the case of deep plots. In the suburbs, the street tract was the most common type of tenement, while in the inner districts a new type of building emerged: the street courtyard with a recessed central section - a later variation of the Baroque courtyard of honor. Old German forms were soon joined by domestic Baroque, which accommodated the desire for more ostentation. An increasing tendency toward verticality, asymmetry, and top-heaviness characterized this era, in which the Art Nouveau style that unfolded around the turn of the century merged with late historicism to produce often original creations.
Apartment house as an investment?
The fascinating history and enduring popularity of apartment buildings have hopefully captivated you as much as they have us. These architectural testaments to the past, which also represent modern investment opportunities, deserve to be discovered with renewed enthusiasm. If you are now attracted by the unique combination of cultural heritage and lucrative investment, we invite you to visit our website. There you will find an extensive selection of charming apartment buildings for sale. Immerse yourself in the world of Viennese real estate and discover the many opportunities offered by the purchase of an apartment house.
Investment Real Estate: The Return of the 3% Yield?
Executive Summary
The prospect of higher yields is an encouraging indicator for the future development of the Vienna real estate market. The current development with declines in investment property prices combined with increases in rental yields for more and more investment properties offers attractive investment opportunities for those willing to study the market carefully and invest strategically.
Intro
In recent years, the real estate market in Vienna has changed significantly due to various economic and political factors. After a phase of price declines, we are now seeing an encouraging turnaround: Yields for investment properties, multi-family houses and apartment buildings are rising.
Investors who carefully monitor the market may find that even some apartment buildings and investment properties in Vienna are once again generating gross rental yields in excess of 3% (net rental income per year divided by purchase price before incidental costs). This is pleasing on the side of buyers as well as for wealthy money investors, foundations and institutional investors looking for stable and attractive returns. Especially those who have enough equity reserves and do not need to finance expensively at high interest rates. And want to be spared the strong fluctuations of the financial markets.
Get in now ?
During the price decline in the first phase, many investors were hesitant to enter the market. But the current phase of the market now offers the first opportunities. Compared to the highs of the last two years, prices have fallen quite a bit in some areas - especially in the B and C locations of cities such as Vienna. While some investors are certainly still waiting, some investors with an affinity for real estate will use the current situation to enter the market.
The rising yields in combination with falling prices are also a sign that the Vienna real estate market is resilient and can sometimes "recover" in the other direction (that of buyers). It underlines the fact that real estate in Vienna, despite temporary fluctuations, is a solid long-term investment vehicle.
Examples
An excerpt from our apartment house list for Vienna shows a significant increase in apartment houses and investment properties with more than 2% or, at the beginning of 2023, still rarely seen 3% rental yields (see figure).
Optimize & Diversify ?
The current situation also offers an opportunity to optimize the portfolio in the direction of higher-yielding assets. Of course, as for all investment assets, it is recommended to: Diversify across different types of real estate, such as investment properties, multi-family houses, apartment buildings or apartment packages, in order to minimize risk in the portfolio.
It is advisable to conduct thorough due diligence and engage the services of an experienced advisor to identify the best investment opportunities and minimize potential risks.
For more information or consultation you can reach me, Dr. Andreas Bonschak, here:
The single-family interest house as a new trend?
Single-family homes represent the world's largest asset class and, among real estate, are also the most widely used form in Austria and Germany.
To date, investing in and renting out single-family homes - hence the term "interest single-family home" - has not been big business.
However, that could now change, for the following reasons:
Rising demand: Even many high-income earners can hardly afford property at the current price level. The tightening of financing guidelines (see, for example, Prof. Dr. Gramann's article here ' ) also contributes to this problem. I do not see a rise in prices in the coming months, as a good part of the real estate industry would like to see (see article "Immotrends 2023"). But I also do not expect prices for real estate including EFH to plummet dramatically. Thus, numerous previous potential EFH buyers will now (inevitably) become EFH renters. To live in an EFH, especially with a garden, in the green outside the city center, with enough space for family and front door, will remain the desire of many people. And will not simply be replaced by a city apartment.
Good returns: Unlike non-profit housing or apartments in multi-party houses, rental single-family homes ("EFH") are subject to virtually no restrictions under rent law. Up to now, there has been supply in this segment mainly in the luxury and high-end segment, which meets with solvent tenants such as diplomats, top managers, and the like. And provide nice returns for landlords. Good returns are also achievable in the segments below, especially since demand will increase as mentioned above. In the USA, "EFH" are considered by far the highest-yielding asset class, with returns of up to 20%.
Investors are already jumping on board: Until now, EFH was considered high-yielding, but too small-scale and therefore virtually uninvestable for larger and institutional investors. This has changed, starting in the USA: Starting with Blackstone, the world's largest asset manager, other major Wall Street investors such as Goldman Sachs and KKR are now investing in the "single-family homes" asset class. While the investment was still at USD 3 billion in 2020, it already rose to USD 45 billion in 2021. The thousands of homes held by these are being refurbished with new flooring and plumbing and also modernized, for example with smarthome technology. These amenities are also attracting better-off tenants. This trend is also spreading in other countries such as the UK, Germany, Ireland, the Netherlands and Scandinavia (see also article in ECONOMIST ' ).
Considerations and challenges for investors
Limits to growth: Despite rising rents in this segment as well, this trend will not continue in the long term, but will level off. On the other hand, thanks to inflation-linked and longer rents, residential rents are robust and fluctuate less in economic cycles than "property" or "office" rents.
Cost uncertainty: rising interest rates, inflation and an uncertain economic outlook mean that the cost of construction, renovation and maintenance is rising.
Opportunities: Rising interest rates mean investors also need to monitor alternatives such as bonds, which may offer more return with less risk and expense.
In summary
Despite these challenges, I think the "interest single-family home" is a highly interesting asset class for investors - even institutional ones.
Would you like advice on this topic? Or are you looking for a professional partner to help you put together an EFH portfolio? Then contact me '
Dr. Andreas Bonschak
How you can optimally sell an apartment house
Tip: How to optimally sell an apartment house
In a series of articles, we provide tips and considerations for those who want to or need to sell their apartment house or rental house, i.e. a multi-family house, or are basically considering such a thing. Even though we are real estate trustees in Austria, our tips apply generally in German-speaking countries for anyone selling an apartment building.
It should also be noted that we also offer a free initial consultation on the topics presented.
Introduction
The sale of an apartment house does not happen very often for most owners. This makes it all the more advisable to have an expert at your side. We support our clients with our detailed knowledge, network and profound market expertise. And last but not least, with our passion for real estate and apartment buildings in particular.
The possibilities at a glance
What is the best way to sell an apartment building? There are four possibilities, sorted in order of professionalism, starting with the "do-it-yourself" method and ending with the most professional method with the best chance of achieving the highest price:
Sell yourself, so nowadays mostly online
a discreet sale through a broker
via auction and
a bidding process
1. sell yourself
Doing it online has some disadvantages and risks: First, you will receive countless inquiries from brokers and questionable prospective buyers with unclear creditworthiness. Second, interest and rental houses that are put online are considered "second choice" properties that could not be sold "offmarket" before and had to be put online now.
Either way, you have the effort with the preparation of documents such as Expose, photos, then the appointments, the numerous visits. In addition, you have to think about the purchase contract, the liability and warranty for defects, the land register registration, the real estate taxation, i.e. many legal or technical aspects where lawyer, tax advisor, notary or construction technician belong coordinated.
2. discreet sale via real estate agent
With the discreet sale of your apartment house via a real estate agent, a broker takes this effort off your hands and handles it for you professionally and quickly. You then only decide to whom and at what price you want to sell your apartment house. And you don't have to worry about anything during or after the sale. By the way, this is the classic, most common method of sale. Our team also offers this service and is supported by lawyers, tax advisors, notaries and building technicians and you get a professional service from one source.
3rd auction
At an auction, potential buyers gather who have been comprehensively informed about the apartment house or several apartment houses beforehand. With the auction and the award to the highest bidder, the sale is completed. This type of sale is used from time to time, especially when prestigious or even a package of apartment buildings are put up for sale in a way that attracts public attention and without time pressure.
4. bidding process
The bidding process has become increasingly popular in recent years - at least among sellers. This works in such a way that the interested parties submit their sealed purchase offer at a fixed deadline and address. When the deadline expires, the offers are opened there and the top-ranked interested parties can then improve their offer again (once or several times). Such a bidding process is often used for apartment buildings in sought-after top locations or if the house belongs to several parties who attach importance to a transparent sale.
Tip
Those are basically the four ways you can sell your interest or rental home. Selling on your own involves a lot of effort and some pitfalls that you have to take into account. We can advise and actively support you on all sales methods, i.e. from finding a buyer, marketing, purchase contract, signing to handing over the keys.
Would you like to receive free, non-binding advice on your apartment building?
Then simply contact us.