Real estate valuation & value appreciation
The value of a property is not a fixed value – it depends on market conditions, calculation methods and the condition of the property. At the same time, owners can increase the value of their property through targeted measures. In this guide, we explain the common valuation methods and give tips on how to make your house or apartment even more attractive in order to increase its value or achieve a better sales price.
How is the real estate value determined?
There are three recognized methods for determining the market value (fair value) of a property:
- Comparative value method: Here, the value is derived from actual sales prices achieved for comparable properties. This approach is used in particular for condominiums or terraced houses in areas with many sales. Factors such as location, size, year of construction and fittings are compared with comparable properties.
- Income capitalization approach: This method is primarily used for rented properties (e.g. apartment buildings) or commercial properties. The value is derived from the long-term achievable rental surpluses. Simplified: annual net rent minus costs, converted into a capital value, plus land value. The focus is on what the property yields in returns.
- Asset value method: The focus here is on the asset value. The land value is determined separately (usually using a comparative value from land prices). Added to this is the
construction value of the building: How much would the building (in terms of type, size, fittings) costtoday ? Age depreciation is deducted from these construction costs (e.g. typically approx. 1-1.5 % per year of age, unless the building has been modernized). - Example: Construction costs for your house today € 300,000, house 20 years old → roughly 20×1.25 %=25 % discount = € 75,000, remaining building value € 225,000. Building value plus land value equals the provisional asset value. Finally, a market adjustment factor is often taken into account in order to include supply/demand at the location (because construction costs alone do not always reflect the market price).
In short: an objectively good condition and modern furnishings almost always pay off in a higher property value or at least in significantly better marketability.
Value enhancement through modernization and maintenance
A well-maintained, modernized property achieves significantly higher values than an unrenovated property with a repair backlog. Even with comparatively simple measures, you can increase the attractiveness and value of your property:
- Renovate & repair: A fresh coat of paint, new floor coverings, intact plumbing and electrical installations – all of these contribute to a well-kept impression. Minor damage should be repaired before selling (e.g. dripping taps, jammed doors). Many prospective buyers are happy to pay more for a property that they can move into straight away without having to call in tradesmen first.
- Upgrading the kitchen and bathroom: these rooms have a huge influence on purchasing decisions. A modernized kitchen (e.g. timeless fitted kitchen, new worktops, modern appliances) and a renovated bathroom (level-access shower, modern tiles, new fittings) increase the value. But beware: excessively cost-intensive luxury renovations are not always fully amortized in the sales price.
- Improve energy efficiency: Energy-efficient renovations not only increase the value of your property, but also make it future-proof. New windows, better insulation or a modern heating system (heat pump, condensing boiler) reduce ancillary costs and are rewarded by buyers. The energy performance certificate will also be better, which is a good argument when selling.
- Outdoor facilities & first impression: Curb appeal – i.e. the first impression from the outside – should not be underestimated. A well-maintained façade (repainted if necessary), a tidy roof, clean driveway and attractive front garden immediately put prospective buyers in a positive mood. Investments in façade renovation or roof improvements also increase the value both technically and visually.
In short: an objectively good condition and modern furnishings almost always pay off in a higher property value or at least in significantly better marketability.
Optimize floor plan: Remove walls?
Modern living trends influence the perception of value. Open and bright rooms are in demand. If your property still has an outdated floor plan with lots of small rooms,
- Load-bearing walls: These may only be removed or replaced with beams after a structural analysis by a specialist. This incurs costs for structural engineers, approval and construction work. Unprofessional removal of load-bearing walls is dangerous and can damage the building fabric!
- Weigh up the costs and benefits: An open floor plan generally increases the market value because the rooms appear more spacious and modern. However, the costs (e.g. inserting steel beams, renovating the affected areas) should be considered in relation to the added value. It is often more worthwhile to show prospective buyers the option. Some sellers already obtain a feasibility study from an architect.
- Note condominium: In an apartment, you need to clarify whether wall alterations are permitted. Load-bearing walls in apartments are often part of the common property; the consent of the community of owners is required here. Non-load-bearing interior walls may generally be altered, but you should still consult the administrator.
Conclusion: Open-plan concepts are popular and can increase the value, but you should only carry out major conversions (or prepare them professionally) if they make economic sense. If in doubt, seek advice from architects or experienced estate agents as to whether a floor plan change is worthwhile before selling.
Photovoltaics and other value drivers
Investing in sustainable technology can make real estate more attractive. One example is the installation of a photovoltaic system on the roof. Solar power systems significantly reduce ongoing ancillary costs – a plus point for every resident. By feeding electricity into the grid or consuming it themselves, owners save on electricity costs, which is becoming increasingly important as energy prices rise.
Buyers are increasingly rewarding an existing solar roof, as it signals self-sufficiency and ecological responsibility. Although the direct increase in value through PV cannot be stated one-to-one (e.g. a €10,000 solar system does not automatically increase the property value by €10,000), it can be the deciding factor as to why a prospective buyer prefers your property to another.
There are also subsidies: Currently (as of 2025), photovoltaic systems up to 30 kWp are exempt from certain taxes for homeowners and the purchase is partially subsidized. This means that the investment pays for itself more quickly and indirectly increases the value.
Other aspects that improve value and sales opportunities:
- Decluttering and home staging: Before you sell, create order. A tidy, depersonalized home looks larger and allows prospective buyers to imagine themselves in it. Remove old furniture and objects that clutter up the room. It may be worth considering professional home staging, where rooms are tastefully furnished and lit.
- Documentation and evidence: If you have invested in value-enhancing measures, collect all receipts and documents (invoices for renovations, maintenance certificates, warranty papers). A fully documented house, where everything has been done regularly, creates trust and justifies a higher price. A current valuation report or a fresh energy certificate are also part of a professional sales presentation.
Conclusion: The value of a property can be influenced. As the owner, you know your negotiating basis through professional valuation. With well-maintained condition, modernization and good presentation, you can get the most out of it – whether for a sale or simply to maintain the value of your property in the long term. Investing in your own property is ultimately an investment in your assets.
Would you like to know the value of your property or are you planning value-enhancing measures? We will be happy to support you! Take advantage of our professional valuation and advice – contact us now to get the best out of your property.
FAQ – Frequently asked questions about real estate valuation and value appreciation
The most reliable method is a valuation by an expert or real estate agent. They will look at your property in person, analyze it and compare it with current market data. You will then receive either a comprehensive appraisal or a market price estimate. Many estate agents offer an initial valuation free of charge. For legal or very precise purposes, a certified expert is recommended.
Modernizing the bathroom, kitchen and heating system significantly increases the value of the property, as it saves a lot of expense. New windows, an insulated roof or fresh floor coverings are also worthwhile. Important: Keep an eye on the costs – not every refurbishment pays off before the sale. An estate agent can help with the assessment.
Whether a renovation is worthwhile before the sale depends on the condition and the market. Minor measures such as painting or touching up usually increase the impression and selling price. It is important that the investment does not exceed the added value. Major defects should be rectified – luxury renovations are rarely worthwhile.
A photovoltaic system reduces ancillary costs and increases the attractiveness of the property – especially for new systems with storage. It can speed up the sale and improve the price. The full investment value is not always achieved, but the market value usually increases noticeably.
Open floor plans look modern and often increase the value. If non-load-bearing walls are removed professionally, this improves the marketability. Extensive conversions are only worthwhile if the costs and benefits are right. It is often enough to show buyers the potential instead of converting the property yourself.
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