New property in sight - but still wondering: „Do I move in myself or turn it into an investment?“
This is precisely the point at which many people find themselves when buying a property or rethinking their current property in Nuremberg. And this decision is more important than many people realise: it affects location, financing, taxes, risk - and ultimately your everyday life.
I will show you how I proceed in practice when we decide together whether a property is better suited for owner-occupation or as an investment - especially with regard to property for sale in Nuremberg.
Two completely different perspectives on the same property
Owner-occupation and investment are not two variants of the same decision, but two completely different approaches.
When it comes to own use, the most important thing is
- Quality of life
- Suitability for everyday use
- Sense of space
- Environment, neighbourhood, infrastructure
When it comes to capital investment, the most important factors are
- Yield
- Rentability
- Structure of rental income
- Long-term performance
A flat that perfectly suits your living situation is not automatically a good investment - and a very profitable investment is not necessarily the place where you would like to live.
How I rate properties in Nuremberg for both variants
The basis is always a clean, professional assessment. Only then do we discuss whether owner-occupation or capital investment makes more sense.
Important building blocks:
- Market value: The realistically achievable market value under normal conditions. It is the basis for determining whether an offer is „fair“ - for owner-occupiers and investors alike.
- Standard land value: This shows what values are usual for properties in this location in Nuremberg. It is a central component for houses and apartment blocks.
- Market analysis: I not only look at Nuremberg as a whole, but also at the respective submarket - i.e. supply, demand, rents, sales prices achieved and marketing time in precisely this segment.
- Reference properties: These are properties that have actually been sold - not wishful prices from adverts. They show whether our prices and expectations are realistic.
- Material value method: This method is particularly important for owner-occupied detached houses, semi-detached houses or terraced houses. The focus here is on the substance - i.e. the building plus the land.
- Income capitalisation approach: This method is crucial for rented flats and apartment blocks. It is concerned with the income (rents) generated by the property and how this relates to the purchase price.
Without these basics, any discussion about owner-occupation or capital investment is pure gut feeling.
Owner-occupancy: When living is the priority
Owner-occupation is about whether your everyday life in this property works - today and in a few years' time.
Important questions that I go through with buyers:
- Everyday location: How far is it to work, schools, friends, the city centre?
- Phase of life: Is the property suitable for the current and next phase of life - e.g. children, home office, future accessibility?
- Room layout: Do the number of rooms and layout suit your lifestyle or would you have to bend?
- Energy status: How are the insulation, windows and heating? What does this realistically mean for the coming years?
- Emotion: Do you feel „at home“ in the property - or does everything just seem „okay“?
Of course, the price plays a role, but when it comes to owner-occupation, the question is always: does the property fit your life - not just your Excel spreadsheet?.
Capital investment: When numbers and structure are crucial
When it comes to capital investment, I evaluate property more soberly. This is where terms come into play, which I explain to my clients in a calm manner so that every figure remains comprehensible.
Important factors:
- Rent level: What rent is realistically achievable - not just theoretically, but in the specific Nuremberg submarket?
- Income capitalisation approach: Here we calculate the value of the property from the rental income, less management costs, with a view to a standard market yield.
- Vacancy risk: How easy is it to re-let properties of this location and size if there is a change of tenant?
- Maintenance requirements: What investments are foreseeable in the next few years (roof, façade, heating, windows)?
- House charges and reserves: Particularly important for condominiums in order to recognise hidden costs.
Capital investment means that the property must make sense even if you have no emotional connection to it. In this case, the property is an economic instrument.
Incidental purchase costs - often underestimated, but crucial
Whether for your own use or as an investment, the ancillary purchase costs must be taken into account. These include, for example
- Real estate transfer tax
- Notary fees
- Costs for land register entries
Especially in the case of capital investments, these amounts are included in the return consideration: If the ancillary purchase costs are too high in relation to the rent, a supposedly good property can suddenly appear less attractive.
In the case of owner-occupation, this point in turn determines how much equity is really still sufficient for reserves, modernisation or reserves.
Speculation tax - why looking to the future is important
One point that I always bring up is the possibility of speculation tax. It can play a role if a property is not held for the long term and certain deadlines between purchase and sale are not met.
I am not a substitute for a tax advisor - but I will point this out:
- In the case of capital investments, the question can be interesting: Should the property be held for the long term or is a later sale part of the strategy?
- In the case of owner-occupation, the question arises as to whether a change or sale is planned at some point.
You should always clarify the tax details with your tax advisor, but the basic direction must be considered when deciding between owner-occupation and capital investment.
How position requirements differ in concrete terms
In Nuremberg, it is very clear that owner-occupiers and investors favour different locations.
Typical patterns:
- Owner-occupation: quiet residential streets, good schools, short distances to everyday amenities, focus on quality of life.
- Investment: central or easily accessible locations, close to universities or large employers, smaller units that are easy to let.
I consciously go through the question with my customers:
- For owner-occupation: would you really want to live here every day?
- For capital investment: Is there enough long-term demand from tenants who are suitable for this property?
This quickly makes it clear whether we are categorising the object correctly.
Three typical decision-making situations from my practice
To show you what this looks like in reality, here are three examples from my everyday life in Nuremberg:
- Young family: They are initially looking for „either or“ - a flat as an investment or a house for their own use. During the conversation, it becomes clear that the next phase of life with children and a daycare centre is just around the corner. Result: Focus on owner-occupation, with a view to possibly renting out the property later if life circumstances change.
- Employee with a stable income: He rents well, but has free capital. The aim is to build up assets. Result: Selection of a flat in which the income capitalisation approach, the rents in the surrounding area and the market analysis are in the foreground - emotion is secondary.
- Couple about to retire: already in their own home, thinking about a smaller flat. Result: A mixture of both - first an investment, later possible owner-occupation when the house is sold and their own life situation changes. The market value, standard land value and market analysis of the house and flat all play a role here.
Every situation is different - but with a clear structure, a sensible path can always be found.
Step-by-step to your decision
This is how I go through the decision-making process with customers:
- Clarify the initial situation: Income, phase of life, plans, risk tolerance.
- Define your goal: Asset accumulation, home ownership, retirement provision, flexibility.
- Analyse the property: Location, condition, market value, standard land value, market analysis, reference properties, asset value method or capitalised earnings value method.
- Go through two scenarios: What does owner-occupation mean in concrete terms - what does capital investment mean in concrete terms?
- Consider ancillary purchase costs and running costs: What is financially viable in the long term?
- Time perspective: How long should the property be held? Could a sale or change of use be on the cards at a later date (with a view to speculation tax and strategy)?
- Make a decision: objectively, but not against your gut feeling - in the end, the figures and your attitude to life have to go together.
Short decision checklist for you
Answer spontaneously - owner-occupation or investment?
- Most important goal: quality of living or return on investment?
- Are you likely to stay in Nuremberg for the next 10 years - or is flexibility more important?
- Do you want to deal with tenants, management and maintenance as a landlord?
- Is it more important to you to „arrive“ or to build up assets in the background?
- Is the location more suited to your everyday life - or does it clearly appeal to target tenant groups?
The clearer your answers, the clearer the direction will be.
Conclusion: The right decision is individual - but never random
When it comes to selling property in Nuremberg, we see this time and again:
The best property is not the one that impresses the most - but the one that suits the buyer's objective.
Investment or owner-occupation is not a technical question, but a strategic one.
With a proper valuation (market value, standard land value, market analysis, reference properties, asset value method, income capitalisation method), a clear view of ancillary purchase costs and an honest assessment of your life situation, we will find exactly the solution that really makes sense for you - today and in a few years' time.
