Buy & Develop

Buy & Develop is a mix of Fix & Flip and Buy & Hold: You buy a pretty run-down place, which you renovate properly in the first three years after the purchase. The renovation costs are fully tax-deductible. Over the next few years, you continue to renovate the property to increase its value. You can also claim the renovation costs as income-related expenses. As a result of the appreciation, you can then charge a higher rent. In addition, you increase the sales price.

And: Ten years and six months after full payment of your loan, you have the option of reselling the property tax-free. This means that you no longer have to pay tax on the profit. From a legal point of view, this is no longer a speculative transaction. This is also regulated in § 489 BGB.