sale Rental Real estate retirement annuity

Real estate retirement as a retirement provision
Real estate retirement as a retirement provision

We present three variants of real estate retirement

Income and capital from your own property

Many people, both older and younger, no longer have enough free money to live on, despite or precisely because of their own property, as the entire savings were often invested in the single-family house or the condominium and are thus built in in the truest sense of the word.

In such cases, the real estate annuity is often a healthy alternative to selling the property or taking out external loans. Because you can stay in your own four walls and the monthly income or pension is increased by the annuity. You can get capital from your property without having to move out and achieve a higher standard of living or liquidity for new investments in the long term.

In Germany there are three different basic models of real estate annuity, the annuity, the usufruct and the partial sale. The different forms of payment as a pension or as a one-off payment have their own advantages, but also disadvantages, depending on your needs.

The annuity

In this case, the property is completely transferred to a new owner. You can stay in your house or apartment until you die and receive a lifelong monthly pension. The value of the right of residence and the costs of maintenance, which are deducted from the market value of the property, determine the amount of the annuity, which, however, also has to be taxed.

The maintenance with necessary repairs, renovation work and insurance are the responsibility of the new owner, he has to pay for them. This means you have no running costs, but you can no longer rent, bequeath or buy back your former property.

The usufruct

With this variant, your property also gets a new owner. In most cases, you will receive a one-off payment and a lifelong, free usufructuary right to the property. This is similar to the right of residence, but you can still rent out the property and thus create a monthly pension for yourself.

In this case, however, you have to pay for the maintenance and insurance yourself. However, more complex renovation work and modernization usually have to be carried out by the new owner. How high the payout is determined by various factors, your age and thus your life expectancy, theoretical rental income and the net present value, for example. Even in the usufruct you cannot buy back your former property.

The partial sale

In contrast to the other two variants, the partial real estate sale is very flexible. The portion to be sold can be individually adjusted to a maximum of 50% and also subsequently corrected. Since you are only selling part of your property, you continue to be the beneficial owner and also retain the benefits of increasing the value of your property. You can decide for yourself about renovations or refurbishments as well as conversion measures, but you also have the costs and can also rent out yourself. In this case, you can also buy back your property.

The market value of the property is determined independently by an appraiser and is then also sold - you do not have any deductions here. Instead, you pay a pro rata rent at customary local conditions.