Inheriting a property in a foreign city can be a test of emotional attachment and logistical effort for many. However, distance doesn’t have to be an unpredictable risk. This guide shows you how to maintain control with a clear strategy and reduce costs by up to 20%.
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The topic briefly and concisely
Managing an inherited property from afar requires a proactive strategy to minimize costs from vacancies and unforeseen repairs.
A professional property management costs between €25 and €45 per unit but pays off through time savings and the avoidance of costly mistakes.
In an inheritance community, clear agreements and majority decisions are crucial for management to ensure the ability to act and avoid conflicts.
Have you inherited a property that is located hundreds of kilometres away? This situation brings significant organisational challenges alongside the grief. Managing it from afar often feels like an unmanageable risk, where costs and responsibilities can quickly spiral out of control. However, with the right approach, you can maintain control and make informed decisions. This article provides you with a data-driven 5-step plan to manage an inherited property in another city, avoid common mistakes, and systematically secure the value of the estate. We translate complex requirements into clear, actionable recommendations.
Step 1: Use the first 100 days to secure the legacy
Immediately after the inheritance event, a critical 100-day phase begins, during which you set the course for the property's future. First, you must have yourself registered in the land register as the new owner; this is free of charge within two years of the inheritance event. At the same time, you should review all ongoing contracts, such as insurance and utilities, and transfer them to your name. In the case of a community of heirs, all co-heirs must act together, which requires quick coordination. Also, clarify the inheritance tax. Children have an allowance of 400,000 euros, and spouses even have 500,000 euros. Any amount exceeding this triggers a tax liability. Therefore, an initial rough estimation of the property's value is essential. With a well-founded overview of the most important inheritance obligations, you ensure that no deadlines are missed. This initial assessment lays the foundation for all further strategic decisions.
Identify hidden costs in vacancy and management
An inherited property from afar incurs costs, even if it is vacant. The ongoing operating expenses such as property tax, insurance, and waste disposal fees quickly add up to several hundred euros per month. For an 80 square metre flat, this can easily amount to 2,000 to 3,000 euros annually. Additional unforeseen expenses for urgent repairs also arise, which are difficult to coordinate from a distance. The cost for a single emergency tradesman call-out can exceed 500 euros. Management itself is also a cost factor: every kilometre travelled to the property costs you time and money. For a distance of 300 kilometres, the travel costs per trip can quickly amount to 150 euros. A detailed look at the costs associated with vacancy highlights the financial risks. This analysis is crucial to determine the break-even point for renting or the right time to sell.
Step 3: Employ a professional property management service to enhance efficiency
A professional property management service is often the most economically sensible solution for managing an inherited property in a different city. The costs are transparent and predictable. For the management of homeowner associations (WEG-Verwaltung), the monthly costs in major cities range from 25 to 45 euros per residential unit. In the case of rental management, a fee of typically 5 to 6 percent of the net cold rent is due. This investment pays off quickly. Good management takes care of finding tenants, credit checks, legally compliant billing of additional costs, and all communication. This not only saves you travel expenses but also up to 10 hours of time per month. Moreover, professional supervision ensures better value retention. The management takes care of establishing an appropriate maintenance reserve and prevents costly consequential damages. A digital inheritance manager can help by finding the right service provider and consolidating processes. Hiring a professional is not a luxury but a strategic decision for risk minimisation.
Step 4: Fulfilling legal obligations as a landlord from afar
As an owner and potential landlord, you have clear legal obligations, and failing to adhere to them can be costly. The most important obligation is the maintenance duty according to § 535 BGB, which requires you to rectify any defects. If you ignore reported damage, tenants may reduce the rent by 5 to 100 percent. To be prepared for larger, unforeseen expenses, a maintenance reserve is essential. Experts recommend setting aside at least 10 euros per square metre annually. For a 100-square-metre apartment, this amounts to 1,200 euros per year. Especially for older buildings, this amount should be closer to 1 percent of the property's value per year. The new Building Energy Act (GEG) also imposes requirements: when replacing a heating system, you can only pass on 10 percent of the modernisation costs if you receive government subsidies. An understanding of the responsibilities as a landlord is crucial to avoid costly legal disputes. This is particularly important if you cannot be readily available on-site.
Step 5: Remaining capable of action within the community of heirs
If there is a community of heirs, the property belongs to all co-heirs jointly, which complicates management. For measures of proper administration, such as necessary repairs or appointing a property management company, a majority decision is sufficient. However, decisions of significant economic importance, like selling the property, require unanimity. A deadlock with only two heirs can lead to a complete management standstill. This standstill causes avoidable costs, for example, due to neglected maintenance or vacancy. To prevent this, clear rules should be established. The following steps help:
Appoint one co-heir as an attorney for everyday administrative tasks.
Engage a neutral, external property management company to act as a mediator.
Document all resolutions in writing to avoid misunderstandings.
Consult a mediator when conflicts become entrenched, before a costly partition auction becomes necessary.
The biggest challenge is often communication. A clear roadmap for how an heir community sells or manages a house is key to success.
Conclusion: Bridging the Distance with Data and Strategy
Managing an inherited property in another city is not an insurmountable task, but requires a structured and data-driven approach. From the initial assessment and cost analysis to professional management and clarification of legal obligations – each step builds on the previous one. The greatest danger lies in inactivity, exacerbated by the geographical distance and complex inheritance situations. An objective valuation of the property is the crucial first step for any strategic decision. Whether you choose to sell, rent, or renovate – without a reliable data foundation, you are operating blindly. A free online valuation provides you with a well-founded initial assessment in 90 seconds. Act proactively to not only preserve your inheritance's value but to increase it in the long term.
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Additional useful links
The Federal Ministry of Finance offers comprehensive information on inheritance and gift taxes in Germany.
The Federal Ministry of Finance explains the application of valuation regulations for real estate in the context of inheritance and gift taxes.
The VDIV (Association of Property Managers Germany) provides information on the current remuneration practices in property management.
The Federal Statistical Office (Destatis) provides data and statistics on construction prices and property price indices.
The BORIS portal enables access to official standard land values that are relevant for property valuation.
Haus & Grund Deutschland offers practical tips for landlords, especially for selecting a suitable property management company.
The ZIA German Property Federation publishes various publications and studies on the German real estate market.
The BVI Federal Association of Property Managers is the central point of contact for information and standards related to property management.
FAQ
Do I need to be there in person for a property I've inherited in another city?
No, it is not absolutely necessary. By hiring a professional property management company and using digital tools, you can handle all essential management tasks remotely. For important appointments, such as a notarisation, a one-time trip or a power of attorney may be required.
Which insurance is most important for an inherited property?
Residential building insurance is essential. It covers damage to the building from fire, storms, or water damage. As soon as you are confirmed as the new owner, you should check the policy and have it reissued in your name. If you are renting out the property, an additional homeowners’ and landowners’ liability insurance is highly recommended.
What happens if the community of heirs cannot agree?
If no agreement can be reached, there is a risk of administrative stalemate, which incurs costs. In the worst-case scenario, any co-heir can apply for what is known as a division auction at the district court to dissolve the community. This often leads to financial losses for all parties involved.
How quickly do I need to deal with an inherited property?
Act as quickly as possible. Settle the legal succession (certificate of inheritance), secure the property (locks, utilities), and inform the insurance companies. You must report the inheritance to the tax office within three months. Prompt action prevents unnecessary costs and legal problems.
Sell or Rent: What is Better for a Property in Another City?
The decision depends on your personal and financial situation as well as the condition and location of the property. Renting can be a steady source of income but requires management. Selling offers immediate liquidity and ends all obligations. A data-based valuation is the best basis for this decision.
How can I find a good property management company in another city?
Research online for management offices with good reviews in the relevant city. Look for certifications (e.g., by the VDIV) and obtain at least three comparison offers. Specifically ask about the included services, the costs for special services, and reference properties.
