Have more money available and still live in your own property? Consumers now encounter advertising for such models of real estate annuity almost everywhere. Is it really that simple? And what is the point of renting out the property?
We carried out the practical test and had five test persons obtain offers from providers, brokers and brokers for a partial or complete sale of their houses or apartments in the summer of 2022 – with a lifelong right of residence or right of use (“right of usufruct”). They wanted lump sums of money, temporary or lifetime pensions. We also asked banks and savings banks about loans. We checked the offers. We have found very consumer-unfriendly clauses in some cases.
The test shows: There are acceptable offers, but also some that we cannot recommend at all. No one should sign a contract without expert assistance. Our comparison helps with orientation.
Why the real estate pension comparison is worthwhile for you
- decision support. Stiftung Warentest presents different types of real estate annuity from sale to loan and says which model suits whom – and what you should keep your hands off. Our checklist will help you to clarify in advance whether a real estate pension is even an option for you.
- Background. We present different variants of loans for seniors who own real estate. We explain how an annuity and a sale with a usufruct right work, and what to look out for in an annuity model – so that the right to stay for life is also secured in the event of a resale.
- interest conditions. A table shows current interest rates for interest-bearing loans that homeowners can obtain.
- model calculations. Do buyers or brokers deduct from the proceeds of sale a reasonable amount for the value of the lifetime home? Our table will help you with the assessment.
- Magazine article as PDF. After activation, you will receive the magazine article from Finanztest 12/2022 for download.
Part purchase, annuity, sale with usufruct, reverse mortgage
Our testers turned to part-purchase providers who currently dominate advertising and the market and only buy part of a property. The seniors also contacted providers who offer home sales on an annuity basis, in the form of lifetime annuities and temporary annuities. They also sought advice from companies that arrange a sale against comprehensive rights of use. Customers receive a one-off payment for this. Interested parties are often sobered when they see the amount. It depends on age and gender and often does not even reach half of the property’s value.
If they wanted regular payments for life, the intermediaries offered to solicit offers for an immediate annuity. In addition, we obtained terms on loans aimed at homeowners, such as reverse mortgages. With this type of loan, the loan amount is paid out gradually, so that the debt level increases over time.
Real estate pension: Age determines the amount of the pension
For our practical test, we sent seniors to obtain offers for their property. We wanted to know how the providers advise and how well they explain the respective offer to our test subjects. The sobering conclusion: Based on the information and documents from the consultations, nobody was able to determine for themselves which offer was best suited to them and which offered the best conditions.
If you want to rent out your property, you often have to deal with difficult questions:
- Can I really rely on the right to stay in the property for life?
- Are payments I am supposed to receive secure over time?
- Is the amount that providers or brokers deduct from the property value appropriate for the residential value?
In addition to the property value, there are other parameters that we will go into in the test. The age of the residents when the contract is signed plays an important role. If, for example, 65-year-olds retire their property, they can often only count on a monthly pension of a few hundred euros. In their mid-70s, the payment can be close to or more than 1,000 euros.
How to turn your house into a source of money
How attractive is the real estate pension? We did the math
Stiftung Warentest has recalculated and checked the documents. Our table helps to assess whether brokers or buyers are setting reasonable values for their offers. We provide an overview of the conditions of partial purchase providers and say how certain clauses affect a later overall sale and how annuities and immediate annuities are taxable.