Key facts:
- The actual market value of mixed-use properties is significantly underestimated by many SMEs.
- Early planning enables tax advantages and reduces the potential for family conflict.
- Whether selling, letting or handing over – every option requires sound strategic preparation.
Many entrepreneurs run their business directly in their own apartment building – be it a practice, grocery store, café or workshop – which is wholly owned by the entrepreneurial family. Mixed-use properties are far more than just business and residential locations – they are a key, but often underestimated asset.
Particularly in the course of succession or retirement, there is often a lack of a clear strategy for dealing with properties. Timely planning opens up valuable opportunities: for liquidity generation, for optimal estate planning – and for your own retirement provision.
Why own properties are often not valued correctly
Many entrepreneurs concentrate on the operational business. The property is seen as a necessary operating basis, but not as a strategic asset. What’s more: In accounting, properties are usually carried at their historical purchase price or a lower book value. This results in so-called hidden reserves, which often far exceed the real market value. The difference between book value and market value can be considerable – especially in regions where real estate prices have risen sharply.
At the same time, there is often a lack of market knowledge and transparency: How much is the building actually worth today? What potential uses are there for the location? Are there interested parties who would be prepared to pay an attractive price? Without a professional valuation, these questions remain unanswered.
Another issue: if the company is sold together with the property, the value of the property is often undervalued in the overall context. Prospective buyers focus primarily on the ongoing business – the value of the property fades into the background.
What’s more, many owners have a strong emotional attachment to their property. This not only makes it difficult to objectively assess its value, but also to make a clear decision. As a result, the property remains untouched – and with it the capital tied up in it.
Early planning pays off
The best time to consider the future of the property is 5 to 10 years before the planned retirement from the business. This is the only way to manage tax, family and legal aspects in a targeted manner. This leaves sufficient time to address key issues relating to the property in a structured manner: What should happen to the property? Will it be sold, rented out or passed on within the family? How can emotional, tax and legal aspects be optimally reconciled?
Early planning also helps to avoid family tensions in the context of company succession – especially if several heirs are involved or the company is to be continued within the family. With sufficient advance notice, fair solutions can be found, for example through equalization payments or the transfer of the property to a separate company. The disclosure of hidden reserves in particular can be relevant for tax purposes. If you sell too late, you risk high income taxation. These effects can be mitigated by timely structuring – such as transferring the property to a corporation.
What are the options?
There are several strategies depending on the situation:
- Direct Sale to third parties or in the context of company succession
- Sale and leaseback: sale with subsequent leaseback to free up capital
- Letting: Subletting in retirement as a source of income
- Family solution: transfer to a successor with clear rules for inheritance claims
Each option has tax, legal and emotional implications. It is crucial to run through scenarios at an early stage and find the right solution for your own life planning.
Your own residential and commercial property is a key asset with considerable potential. Early and professional planning enables optimal use – whether for retirement, business succession or capital release.
– Early and professional planning enables the optimal use of this important asset. with considerable potential. Early and professional planning enables optimal utilization – whether for retirement, company succession or capital release.
Why professional advice is important
The market for mixed-use properties is complex – from a legal, tax and emotional perspective. A valuation forms the basis for all further decisions. It is not only a matter of setting a price, but also of realistically assessing all factors that influence the value. In the process, new potential is often identified that previously remained undiscovered, for example through conversion or targeted investor approach.
Real estate professionals have in-depth market knowledge and a broad network of prospective buyers or successor companies. They know which target groups should be addressed, how to market such properties optimally – whether discreetly or publicly – and how to structure the sales process efficiently.
Professional advice also includes early consultation with tax advisors, notaries and succession experts. In this way, transfer models such as sale-and-leaseback or letting to successors can be planned in advance and optimized from a tax perspective. A neutral view from the outside also helps to avoid emotional decisions and to fully exploit the potential of the property.
Conclusion
Mixed-use properties are more than just business locations. They are long-term capital investments with considerable strategic value. For small companies in particular, these properties are often the backbone of their retirement provision – or a key to successful succession planning.
With an early analysis, professional support and a clear plan, you can maximize your potential – for you, your family and your company.
Data are without guarantee. The information on these Internet pages has been carefully researched. Nevertheless, no liability can be assumed for the accuracy of the information provided.