Suppose we visit and like a flat which is priced at 1.2M francs. But it is a bit old and we think a renovation of 200k-300k will make it the modern home that is perfect for us. Now my questions are:
- Will that 200k also be paid as part of the mortgage, i.e. somehow similar to getting a mortgage for a flat for 1.5M in total, instead of 1.2M?
- I know (heard) that for any work affecting the exterior part and looks of a flat things become very soon very complicated and one needs permissions from many authorities (+ neighbours?). Is it better if all the work only concerns the interior of the flat (floor, bathrooms, kitchen, ...)
- All in all, is it a good idea to buy a not-so-new flat and renovate it instead of buying a recently-built one? (Assuming some due diligence has been done and the old flat is in good condition structurally etc..)
Well, firstly, the bank may decide that property at 1.2M is overpriced and based on their calculations, it is only worth 1M, in which case if you want to proceed you will have to pay the extra 200k of the price yourself, plus the 10-20% cash deposit required, plus any renovation cost. But a different bank may think otherwise and be willing to finance as much as you can afford.
For practical reasons it will likely be two separate mortgages: one before the sale so you can pay the seller and buy it, and second once you have established works to get the credit for renovation. Generally what you call renovation will be a combination of repairs and improvements, both of which produce some tax savings but you may want to spread out repairs over several financial years.
If it is worth doing the renovation yourself or not depends on many factors as you perhaps guess: how much free time you have, how much experience you have in such projects, how much patience you have, language abilities, where the property is located, how long you are willing to wait,...
It the end, one way or another you will have to pay for the renovations somehow, either by managing them yourself or by a higher initial price to the guy who did them for you. For many people, having them done has obvious advantages: known cost, admin done, inclusion into mortgage from the start (if bank accepts the selling price), improvements available from day 1.. but on the other had, for the same reasons, such properties can sell quickly and be more hard to find.
Usually the structure/exterior of the building is the responsibility of the joint owners (stockwerkeigentümergemeinschaft) and there should be a management and building fund for such things. You can do what you like within the part of the property which you "own".
Incidentally, if you are not already aware, its best to research the special issues which buying a property in "Stockewerkeigentum" may involve.
Flats usually are part of what is called a condominium (not sure of the term in German) where the exterior part does not "belong" to individual flat owners but are considered common property. Exteriors are usually only renovated, repaired or otherwise modified only by the condo administration which usually involves an agreement by the condo owner's assembly, not to mention any additional local regulations that may apply. In practice, you should start with the assumption that you can not change anything on the outside.
Each condo association has its own "rules", these are largely similar but may differ on subtle points here and there
And you should check for the budget of the condo association and any further planned works (e.g. rennovating exterior walls) as these tend to be big ticket items.
That's a how long is a piece of string question. There is no general rule. You could assume that in general, it's all reflected in the price, though this is where negotiation and in-depth knowledge of the local market come in...
You ask the mortgage for the sum apartment + renovation. 1.2 mio + 0.2 mio = 1.4 mio mortgage. For the works inside the apartment you can decide, for outside depending what you want to do you need a permission of co-owners.