Why you should buy an unrenovated apartment
Buying an unrenovated attic apartment--dark, musty, and only insulated with spiders’ webs--might seem like a scary purchase. However, underneath the dust and dirt these properties have many assets that could make them the most valuable home in the building. Besides the fact that renovating an undeveloped property will boost its overall value, there are other opportunities to cut costs and increase capital gains that you won’t necessarily find in a new-build apartment. We have compiled some reasons why buying an unrenovated apartment might be ideal for you:
Make it your own
The biggest incentive for most people who buy unrenovated properties is the simple reason that they have total control over the finished product. The entire layout of the apartment can be designed exactly to your specifications, and everything from the flooring to the door handles can be chosen to suit your own tastes. The lower price tag on unrenovated homes gives you more flexibility in your budget for renovations, so that you can pick exactly how you want the finished apartment to look. Maybe you would prefer to have a bathroom with daylight over a large kitchen, or you’d rather have an open-plan living space instead of two separate rooms. Whatever your preferences are, you can make them happen when you buy undeveloped.
Increase the value
Most of the time unrenovated or undeveloped apartments are much cheaper than new-build units. They are also typically easier to come by: new-build apartments sell fast, and the unappealing cosmetics of unrenovated units can turn buyers off. That just makes them all the more valuable to someone who isn’t afraid to get their hands dirty. Buying unrenovated apartments is a much more affordable way to buy in a desirable area and gives you the opportunity to skyrocket the value of the home. Making simple cosmetic upgrades doesn’t have to break the bank and can add immense value to the apartment when it’s time to sell. Spending a few thousand euros renovating a bathroom could add double that to the overall value of the apartment. Refurbishing floors, adding storage, replacing windows and doors—all these improvements will transform your affordable apartment into a valuable piece of property.
Cut energy costs
Altbau apartments are not known for being the most energy efficient. But when you buy unrenovated, you can give the flat the necessary upgrades to save big on your next energy bill. Repairing and replacing old windows and doors can prevent heat loss in winter and significantly reduce your energy costs. Adding underfloor heating is also a great way to heat a large room with high ceilings, and much more cost-effective than old radiators. While these might seem like expensive renovations, the money saved over time will undoubtedly make up for the initial costs. These are also excellent ways to renovate sustainably, which you can read more about here.
In some parts of Germany, it could be possible to get financial support from the state when modernising historical listed homes, which are usually Altbau buildings under a preservation order called ‘Denkmalschutz’. In order to encourage reoccupation of these properties, the government is subsidising restoration: owners could receive a subsidy when restoring these older properties within a designated redevelopment area. Buyers and investors can receive numerous tax breaks with depreciation options of up to 70 percent. However, it should be noted that when renovating these listed homes there could be certain rules and strict measures in place in order to preserve the integrity of the property.
Investors who are looking to rent out their property will be pleased to know that the rental cap does not apply to properties which are rented directly after comprehensive modernisation measures. So it might be worthwhile to purchase a seemingly undesirable apartment in a prime location and spend the extra money renovating in order to maximise rental yields. While buying an undeveloped property or an unrenovated apartment might seem like a daunting undertaking, there are so many advantages that make all the time and work worthwhile. Whether you’re designing your own home or developing a lucrative investment, you are sure to be rewarded at the end of the project.