Loss of rent: yield effect

Vacancies, rent arrears or even re-letting and tenant selection. There is a lot for you to consider when buying real estate. Even if you have found a profitable property in the real estate acquisition process with a good property yield, 2 or 3 months of vacancy per year can make your investment suddenly unprofitable. Why and why is the choice of location / property type so important? You can find out more here in the Real estate purchase risk guide.

This guide is therefore about raising awareness of the topic of location selection and property type. When buying a property, in most cases you are taking over the current tenant. It is therefore important to always check the seller’s tenant history!

Loss of rent = you pay the costs instead of your tenant

Let’s start with the topic of vacancies.

Reasons for vacancies and rent losses

Tenants who don’t want to pay quickly make an investment unprofitable. But it doesn’t always have to be the worst-case scenario – rental nomads are rare – rent defaults can also occur because your tenant has financial difficulties and can no longer pay the rent on time. Or a change of tenant when you move and your new “ideal” tenant only moves in a month or two later.

In addition, there are structural changes, long-term vacancies, when the location becomes unattractive for tenants.

There are therefore many reasons for rent losses:

• Rent not paid – tenant has financial problems
• Vacancy, e.g. for new tenants – “desired” tenant arrives later
• Vacancies due to structural changes – in 5, 10, 15 years

Location + property + tenant selection

In addition to the choice of location and type of property, you, as the future landlord of a capital investment, also need to select tenants.

Let’s take a worst-case scenario as an example. Your tenant refuses to pay the rent, regardless of whether for personal reasons or financial reasons, and it takes 9 months to file an eviction suit. If the tenant himself is not sufficiently solvent, you will never see your money (costs of the eviction action) again.

Central, think about:

• Choice of location – structural vacancy? Less housing in the future
• Real estate type – How do you live? Micro apartment, instead of loft apartment
• Tenant selection – Who is a tenant? Creditworthiness (and trust)

The better you prepare for this when buying your first property, the better.

• Choice of location: A, B and C location
• Property type: Houses or apartments

Vacancy or not: loan installment must be paid

The vast majority of people finance their property. This means that you give about 15% equity and a bank gives you the rest (85%) as a loan. You repay the loan. The monthly installment of repayment and interest is called the loan installment. The bank doesn’t care if your tenant gets into trouble. You have to pay the monthly installment.

No matter what happens:

All costs continue to run!

Vacancies: influence on real estate yields

When buying real estate as a capital investment, the main focus is on returns. Simply put, the rental yield indicates how much rental income you achieve in relation to the investment (purchase price of the property, ancillary costs, maintenance). The result is a percentage. The higher, the better.

Example (simple):

• Investment in real estate: 100,000 euros
• Rental income / year: 3,000 euros
• Yield = 3%

3% would be relatively low, as you have to expect around 6% for interest/repayment and maintenance (currently). This means that your property must yield at least 6% to cover the costs.

As soon as you slip below ~ 6% yield, you pay more

Assuming you have calculated extremely tightly when buying real estate. So that you just achieve a 6% return, which covers the management / loan installment (interest and repayment). Now you have only 2 months of rent loss – the calculation is no longer correct and the yield drops to 5%. At 5%, the “missing” percent has to be paid out of your own pocket.

• Calculate real estate yield

Calculation: Return effect 2 months default

Let’s now calculate with the extremely tightly calculated 6% yield property. The big goal in all our guides:

Your tenant pays for your property = good return

Example 6% yield with full rental payment:

• Investment in real estate: 100,000 euros
• Rental income / month: 500 euros x 12
• Rental income / year: 6,000 euros
• Yield = 6%

Example effect of loss of rent (2 months):

• Investment in real estate: 100,000 euros
• Rental income / month: 500 euros x 10
• Rental income / year: 5,000 euros
• Yield = 5%

That means 1,000 euros out of your own pocket this year.

– 1,000 euros instead of “Tenant pays for your property”

Financial freedom? That’s why preparation is so important!

Tenants should therefore always be closely scrutinized. You should do a really thorough check.

• Self-disclosure
• Previous landlords speak
• Schufa information
• …

Rent arrears and reserves

It doesn’t always have to be a complete loss of rent. In practice, there are many reasons, for example, your tenant may not accept a rent adjustment following modernization measures. In other words, you modernize and adjust the rent and your tenant refuses to accept the rent increase.

Here, too, you are faced with the problem that you have made your investments and suddenly the tenant refuses. A dispute like this can go on for a long time and, in the worst case scenario, it can take 6 – 12 months before an eviction action is brought.

So that you can go into your first property without any worries, remember this:

Build up reserves!

What does that mean?

Building up reserves: security for the first property

Ideally, protect yourself financially against two possibilities:

1. Reserve for maintenance
2. Reserve for rent losses
3. Reserve for all eventualities

Reserves do not have to be set aside. However, they protect you from costs that you may not know how to cover spontaneously. Because, as you have learned, it doesn’t matter whether it’s rent arrears, loss of rent or vacancy:

All your costs continue to run

Reserve for maintenance

One cost factor that you will always have to bear is maintenance. More or less, of course, depending on the year of construction and condition of the property. In general, however, you already calculate 2% reserves for maintenance in the first yield calculation.

Part of the yield calculation, 2% maintenance reserve:

2% reserve for maintenance

Property for 100,000 euros (investment) = 2,000 euros reserve / year

Reserve for rent losses

In addition, a 6% rent reserve is recommended for possible rent losses:

+ 6% reserve for rent losses

Property for 100,000 euros = 6,000 euros reserve

6% would also correspond to a return of 6% = 1 annual rent.

Reserve: Extra, for all eventualities

Especially for the first property, without large assets of your own (as a rule), you should think about an additional reserve. Why? So that you never run out of money and miss a payment to the bank.

Ideally for the first property, not a must but security:

+ 10% extra reserve

Property for 100,000 euros = 10,000 euros reserve

Follow-up financing: risks and interest rate changes

Vacancies not only have a negative effect on yields. Most property loans have a fixed interest rate with a fixed term. At the end of the term, the conditions are renegotiated, known as follow-up financing.

This is where the 2 central aspects come into play again:

• Choice of location – structural vacancy? Less housing in the future
• Real estate type – How do you live? Micro apartment, instead of loft apartment

Lending: Factors

The bank also follows a clear path for follow-up financing. Let’s say you fixed the interest rate for 10 years for your first real estate financing. After 10 years, with 25 normal repayments, the remaining debt is around 76%. This must now be financed.

For follow-up financing, go back to your bank or to another one. If you are offered better conditions, it is worth obtaining alternative offers for the follow-up financing. Bank A, B, but also C will take another focused look at your property and you:

• Real estate
• Creditworthiness

Structural change: lower property valuation

Factor 1: Structural change – Because everyone is reassessed for the follow-up financing. Let’s say your fixed interest rate expires after 10 years and the bank says the property is now worth 20% less, for example because many people have moved out of the region in the last decade, property prices are falling and so on.

Banks want security, if the property is then worth less, the bank would have lost money in the worst-case scenario (loan installment defaults, forced sale/auction). So the interest rate rises.

Interest rate change: interest rate development in 10, 15, 20 years

Factor 2: Interest rate changes – Interest rates are currently lower than ever. It is impossible to make a serious forecast of what interest rates will be in 10, 15 or even 20 years’ time. However, a look back shows that interest rates in this country were still above 8% until 1990, 4-6% until 2000 and currently only 1-2% for real estate loans. If interest rates fall, it’s great for your follow-up financing. However, if interest rates rise, it’s bad, because then you pay more and the return calculation no longer works.

What to do? Tips for good returns

First of all: keep your eyes open when buying real estate!

Don’t buy yourself any problems!

Don’t buy yourself any problems, learn here with us step by step how to buy your first property, from the preparation, to the acquisition (finding profitable properties), to the purchase contract. By the time you’ve read our guide to buying your first property, you’ll know how important it is to find profitable properties in the real estate acquisition process.

Read here again:

• Choice of location: Buying an A, B or C location?
• Property type: Houses or apartments?

3 tips: Low interest rates

You now know that it is very unfavorable if the property suddenly costs money instead of bringing in money. What can you do? Here are 3 simple tips:

Tip 1: Buy cheaply – It sounds simple, but “the profit is in the purchase”. A piece of business wisdom that is also true when buying real estate. Buying cheaply means finding a property that is sold below market value, or that you, as the buyer, buy below market value. We have more on this topic here: Buying real estate.

Tip 2: Fixed interest rate – If you fix your interest rate for 10 years, you will have to take care of follow-up financing in 10 years. The longer the fixed interest rate, the longer you don’t have to worry about interest rate changes. To maintain the current low interest rates, you can agree a longer fixed interest rate, for example 15 years or 20 years. In case of doubt, until the end of the loan.

Tip 3: Higher repayments – If interest rates explode and ruin many yield calculations, higher repayment installments are an option to reduce interest rates. Interest is always calculated on the basis of the debt or, from the first payment, on the basis of the remaining debt. The lower the remaining debt, the lower the interest. With the current low interest rates, however, it is worthwhile financing real estate over a long period of time, as inflation ensures that your loan installment is always “smaller” in terms of purchasing power.

You can also start financing with more equity right at the beginning. This means that the loan amount is smaller and so is the repayment. This means that the loan is repaid more quickly and long-term interest rate changes no longer affect your financing.

Let’s summarize the 3 tips once again:

1. Purchase price – Buy cheaply (below market value)
2. Fixed interest rates – agree longer fixed interest rates (15 years, 20 years)
3. Repayment rate – Repay more or start with higher equity

Here are 2 practical tips for finding “problem-free” properties:

2 tips: Real estate viewing

Here are 2 practical tips for your real estate search.

Tip 1: Pay attention to the property management company – Is the property management company doing a good job from your perspective? In other words, do you have the feeling that the property management company knows what it is doing?

Tip 2: Owner-occupiers in the house – When you view properties, you also make sure that there are a few owner-occupiers living in the house. You tend to make sure that the property remains “well-maintained” in terms of its condition and the tenants.

In short, you pay attention to:

1. Property management and trust
2. Owner-occupier in the house

Different forms of credit – different terms and conditions

When it comes to loans, most people think first and foremost of real estate loans. In other words, a loan that has to be taken out because hardly anyone is in a position to pay for an apartment or a house out of their own pocket. But most loans in Germany tend to be personal loans. That is, loans that are needed for the purchase or repair of important things.

A good example is the purchase of a new car. If you are in a position to pay the purchase price directly, you can usually negotiate better terms with the dealer. Here, the conditions can even improve so much that even minus the credit costs, you can still make a profit. Therefore, it makes sense and sustainable, if you support such a purchase through a personal loan. It is important to choose the appropriate and also the most favorable loan.

Compare personal loans – the differences can be amazing

If you want to take out a personal loan, you should compare the personal loan online to be on the safe side and thus take a closer look at the different providers. The differences – depending on creditworthiness and the amount of the loan – can be considerable. A good credit comparison also helps you to orient yourself in the jungle of different providers a little better and to recognize which offers are valid. Not every offer is equally attractive, since all providers advertise the lowest interest rates, which, however, hardly anyone can fulfill.

Online loan comparison – the advantages

So if you’re planning to take out a loan, you shouldn’t go straight for the first offer that comes along, but actively compare them. And that’s much easier online than offline. Whereas in the past you had to go from bank to bank and obtain the various offers, it is now noticeably easier. With just a few clicks, you can specify the general conditions and then compare the various regional and national providers. It’s hard to find a suitable loan more quickly and easily. What’s more, you’re not alone. More and more people in Germany are taking out personal loans for a variety of reasons.

Installment loans and personal loans in Germany – the trends

If you look at the current statistics on lending in Germany, it is hard to miss one trend. More and more loans and ever higher total loan amounts are being taken out. This is due to a wide variety of factors. On the one hand, the demand for consumer goods has increased significantly and many people are also buying such goods on credit. Among other things, this development was due to the zero interest policy offered for a long time, which was actively used by many companies for advertising. However, the rising standard of living also ensures, among other things, that people take out loans more easily in order to be able to make important purchases more quickly.

Personal loans are taken out for, among other things:

• The financing of a motor vehicle
• The financing of vacations
• Important purchases such as refrigerator, stove or washing machine
• Repair costs for car or washing machine & Co.
• Other consumer loans

So you see that there are many people who want to and take out a loan for the most diverse reasons and purposes. But not every purchase and not every purpose is good enough. Because a personal loan is always also a financial burden, which you must bear. Therefore, it is important to consider which loans you take out and which loans you are better off doing without.

Do not take out a loan thoughtlessly – consciously control your own credit rating

Very many people think they already have the best possible credit rating. Many people are not aware that credit inquiries can damage this credit rating. That’s why you should think carefully in advance about which loan makes sense and which you can do without. After all, regularly and reliably serviced loans also increase one’s own credit rating on the other hand. It therefore makes sense to have your Schufa score checked and see how your own creditworthiness is doing. It is therefore not a good idea to take out a personal loan for a vacation trip, for example.

After all, there is also the possibility of enjoying a camping vacation in Germany, for example, and thus saving money. However, if expensive purchases such as cars, bicycles or electrical appliances in the kitchen segment are pending, a loan can be quite useful. This is because the loan amount is matched by an item that can be sold again in case of doubt and offers a certain value. To stay with the example, this would be different for a vacation. There are therefore many good reasons for taking out a good personal loan, especially one that is attractive in terms of interest rates, if the need is correspondingly great.

Priorities in the personal loan – weigh carefully

It’s best to think about this before you make your first request: Do I need the loan for a purchase that is crucial to my life? I need a car to get to work, to provide for my family or to be more flexible in my free time. I need a stove or a washing machine for my daily life. Do I need that huge new TV so badly that I have to take out a loan for it? Is that luxury vacation worth going into debt for? If you set these priorities right, you can definitely find the right personal loan for you.

A well-planned personal loan can make many purchases or repairs possible

Although the era of zero-interest loans is probably a thing of the past, there are still considerable differences in the structure of the loans, the repayment and the interest rates. So if you inform yourself in advance and compare the various offers on the market, you will benefit significantly in the end and can obtain loans at better conditions. In the end, this also means that you pay significantly less money for the same item or the same repair, which is a considerable economic advantage.

Every regularly and reliably serviced loan also ensures a better and more stable credit rating, which can make a considerable difference when it comes to later real estate loans, among other things. Therefore, it is important and sensible to take out loans when needed, as long as you are able to service these loans safely and without pressure. So if you need an appropriate personal loan, it is best to compare the various offers and always keep an eye on your own credit rating.

Equity: Use for own benefit and capital investment

To finance a property, the bank requires a certain amount of collateral. The better your credit rating, the less equity you have to put up. When buying the first property, two basic rules apply for personal use and capital investment.

• Self-interest = As much equity as possible
• Capital investment = As little equity as possible

The equity subtracted from the total investment sum results in the loan sum required from the bank. This loan is paid back by a monthly repayment, including interest.

What is important in the repayment?

• Capital investors: Interest can be deducted for tax purposes
• Owner-occupier: interest cannot be deducted for tax purposes
• Repayment: Repayment + interest for loan amount

Owner-occupiers: High equity

With this type of real estate purchase, the interest on the financing cannot be deducted from taxes. To keep the interest as low as possible in the end, it is worthwhile to bring in as much equity as possible. So the bank has a lower risk with your financing and the lower the interest is calculated.

• More equity, the better the conditions
• At least 20% equity for owner-occupiers

Cost per month for own use

In general, for financing a property, the cost of the loan should not exceed 40% of disposable income. In addition, one should keep in mind that the costs and interest rates can change. Just as quickly as the interest rate can change the cost of managing the property, such as water, electricity and gas.

• Self-interest < 40% of income (net, after tax)
• Interest and management costs may change

Capital investment: Lower equity

If you buy a property as an investment, you can fully deduct the interest on the financing from your taxes. If the rental yield is sufficient, even the tenant pays off almost completely on his own. However, surpluses generated from the return must be taxed, which is a major disadvantage.

• Interest is deductible
• Tenant pays interest through sufficient return on investment
• Less than 10 – 15% equity for capital investment

Rolling equity

Simply explained, rolling equity means that you get your investment of equity paid out as soon as the repayment at the bank is paid off. So in short, how do you get your invested equity out of a real estate investment as quickly as possible? To achieve this, there are two ways.

Two options:

• Restricted equity
• Full financing

Restricted equity

With this equity investment option, the equity is tied up until the property is sold, which means that you cannot access the equity during this time.

Sample calculation:

• Investment costs (purchase price plus ancillary costs): 250,000
• Equity after bank (15%): 37,500
  _____________________
• Loan amount: 212,500
• 32,500 euros committed as equity

Full financing

In this case, it is agreed with the bank that the purchase price including ancillary costs will be financed in full. The equity capital is invested in an extra account or securities account as collateral, which is released as soon as the repayment of the loan reaches the level of the equity capital.

Sample calculation:

• Investment costs (purchase price plus ancillary costs): 250,000
  _____________________
• Loan amount: 250.000

Additionally:

• Assigned collateral (account or deposit): 37,500

The next step: commercial examination

You have determined your maximum purchase price and are now faced with the commercial check, so that the previously determined and determined budget is adhered to. This audit is particularly important for the purchase of the first property such as apartment or house, that thus unnecessary costs and mistakes in the purchase of real estate are avoided. This audit includes not only the cost, but also the inspection and defects by year of construction and maintenance of a building. Read everything about the purchase audit here!

Self-disclosure for the bank

Before determining the required equity capital, you should provide the bank with a self-disclosure about your financial situation. You can find out what this means here!

You want to buy your first apartment or house and the bank wants a self-disclosure from you? Learn here what a self-disclosure is, what it says and download a free PDF template that you can use to convince your bank!

• Self-disclosure

Expensive housing: Self-interest becomes a disadvantage

Financially, the personal use of a property is certainly not the best idea. In order to secure one’s financial situation with real estate, it is better to consider the property as an investment – unless a property has a special emotional value for you for personal use! Why this is so, you will learn here.

Disadvantage Self-interest: Negative cash flow

To begin, what does self-interest mean to me?

• As an owner and owner-occupier, you always pay 100% of the operating costs yourself.
• You get neither money from the tax office, nor from potential tenants
• So self-interest means constant expenses and no income
• Credit rating decreases due to higher risk

Advantage of real estate as an investment: Positive cash flow

Real estate as an investment brings you clear advantages. Find out what they are here:

• All costs and expenses are borne primarily by the tenant and the tax office
• With a good return, the investment property almost pays for itself
• Interest is tax deductible
• Credit rating increases already after the 1st year

Buy and rent real estate: Security for old age

You have bought your first property and decided to invest. Great, then almost everything runs by itself! Here we have an example for you.

Example: Purchase of a condominium for 250,000 euros

• Property is purchased with financing from bank
• Tenant pays 1,000 euros a month
• Tenants pay thereby: Interest, redemption, modernization
• Tax office helps through deductible costs and tax relief
• Gross rental yield (annual rental income divided by purchase price) becomes a steady source of income
• This increases the credit rating, which favors the purchase of a 2nd and 3rd property

Still not quite convinced? Read more about owner-occupation and capital investment here/ Immobilien-Erfahrung.de

Conclusion: Personal use vs. real estate as an investment

In this article, you have learned a lot about what it means to invest in self-interest or in a capital investment. Here we’ve put together our conclusion on what we think is the sunniest way to invest in real estate.

• Self-interest – Negative cash flow; you pay all ongoing operating and maintenance costs yourself, no one participates in them
• Capital investment – Primarily tenants and the tax office pay off your expenses, your credit rating increases and thus provides you with a basis for your real estate portfolio.

On both sides, increases in value can be seen, but once the purchased real estate is paid off, you have a constantly running source of income with it. For you, this means a carefree and, above all, rent-free life in old age!

Next step: return on investment or investment property?

You have decided: Finally buy your first own property! But am I buying an income property or an investment property? But what is it anyway? What is the basic difference between these two types of investment? And what exactly is an A, B or C location? The most important thing is that both types of investment generate profit for you. In which form, you can read here. Here you will learn everything you need to know about the return and the investment of a property.

Real estate investment : avoid mistakes and become a professional

A real estate investment is a long-term investment and the best way to build up a large fortune with little equity. There are many types of real estate, such as detached houses, semi-detached houses, zero-energy houses or maisonettes, old buildings or apartments. This could be exactly the right thing for you. It is underestimated how quickly life can change. Successful investors calculate before the purchase, whether the expected return on an object covers the financing costs and in the end even profits are achieved. You can learn that here too!

Before we get to the book recommendations for real estate investing, here are 3 tips on the subject: Learn for free on Lukinski, we have video tips on Youtube and for those who want to become a real estate investor, another look at the subject of taxes, because the more money you make, the more taxes you pay. The more knowledge you build up here, the less taxes you pay and the more equity you have, for your investments.

If you are looking for online tips, we can recommend Lukinski.de. Here you will find everything from getting started in real estate to real estate as an investment through renting to saving taxes with real estate (external). All free of charge.

Tip! Overview Real Estate XXL

The world of real estate is complex and multifaceted. If you want to keep an overview and avoid making mistakes, you should prepare well and clarify as many open questions as possible in good time. No matter whether you want to build, buy and rent out a property or live in it yourself, or even use a property as an investment to generate passive income: The preparation is the A&O. Here you will find articles, as well as book and video tips with successful and helpful books and videos on the subject of real estate – including tips and tricks from professionals and experts.

• Book & Video Tips Overview: Real Estate

Tax optimization: Experiences from Tax Coaching

If you write about real estate, you have to educate yourself. More concretely, when it is no longer just about personal use, but also about renting. Because, the biggest item on the expense side is taxes. The more you earn, the more taxes you have to pay – the problem is clearly defined, what to do? Learn from experience, from those who have made it. Many say that the Next Level Tax Coaching is the best in Germany. Reason enough to take part yourself. You want to become a real estate investor yourself?

Read more about tax coaching here:

• Tax optimization: Coaching

Richer than the Geissens

Rating: 4.2 / 5.0 (402 ratings)

Achieve financial freedom in 5 years and become maximally successful. Alex Fischer shows the reader how to make it even as a total beginner with zero euros starting capital in just five years to the real estate millionaire. This book offers valuable practical strategies to achieve sensational success in all areas of life. There are 43 timeless laws of success that not only lead to financial freedom, but that anyone can use to live their life the way they’ve always wanted to. The tips in this book were developed exclusively for people who expect only the best.

In exciting stories and examples you will learn::

1. How to develop the mindset to attract money and success like a magnet.
2. What tools you need to be truly free.
3. How to build a money machine that works for you day and night while you sit back and enjoy.

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Buy real estate, rent it out and earn money

Rating: 4.5 / 5.0 (153 ratings)

Investing in real estate is not subject to fluctuations in the stock market or inflation. You can start wonderfully due to the low interest rates now:

• With a real estate yields of up to 8 % are possible (if the investor manages cleverly).
• Real estate is an investment that retains its value – in the long term, it can even be expected to increase in value.
• Who invests correctly, builds up a lucrative additional source of income, an optimal old age provision or even a completely new professional mainstay!
• The demand for housing is growing and there is no end in sight. Due to the housing shortage, higher and higher yields can be achieved, especially in cities.
• There are plenty of tax savings to be had with a property investment.
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Tax lexicon of the basics

Rating: 4.0 / 5.0 (127 ratings)

Dictionary for Beginners and Advanced with Examples & Appendices – This never-before-seen tax dictionary is the 1st of its kind and is specifically designed to help beginners understand everything about taxes. Difficult subject knowledge is simply brought to the point here. It gives you a (relatively) easy entry into the complex world of taxes with the help of good explanations and practical examples.

• You want to finally know and understand how the tax system works in real life?
• When searching for helpful information, do you come across thousands of technical terms that confuse you?
• When you look up a technical term (online or dictionary) are there umpteen technical terms in the definition again that you don’t understand?
• Even if you understand the definition, you don’t know what the point is for you?
• Things are described with no “hands on” example?
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Investing intelligently in real estate: the quick-start guide

Rating: 4.7 / 5.0 (122 ratings)

In his book “Intelligent Investing in Real Estate”, the author provides you with insider knowledge directly from practice, which you can use to secure your future – even if you think you can’t manage it with your own savings:

• Don’t be afraid of unfamiliar territory: this book gives you a basic course that allows you to invest in real estate almost risk-free. in real estate.
• The advantages and disadvantages of real estate as an investment are explained to you comprehensively and honestly – especially the prospects for returns.
• How can you finance real estate? Discover concepts and investment strategies to invest in real estate even without equity.
• To avoid any unpleasant surprises, here’s how to proceed with your tax return.
• Get a detailed plan on how to choose properties that really make you money and develop a nose for the right location.
• What alternative investments are there? Get and develop your personal investment portfolio with this book.
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Real estate as an investment

Rating: 4.9 / 5.0 (104 ratings)

Real estate is worthwhile if you go about it the right way. Here you can find out what to look out for, what to avoid and how to proceed. As a bonus, there is also a calculation tool that you can use to estimate the development of the value of your property.

You’ll find out with this book:

• What opportunities there are to invest in real estate
• What are the advantages and disadvantages associated with each option
• What you need to look out for in a plant
• What is important when buying a property
• What is important for holding a property
• How it looks with your own contribution to the value maintenance or reorganization
• What taxes you have to pay
• Why investing pays off despite Corona
• How to get income from real estate
• How to build your wealth with real estate
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Guide to investment strategy, tax strategy & choice of legal form

Rating: 4.7 / 5.0 (76 ratings)

Many people from the middle class only fail to make it to millionaire status because they lack the crucial information to reduce their tax burden and build up wealth through smart investments. This is especially true for highly skilled workers and smaller middle-class entrepreneurs. To achieve financial freedom and economic independence, building a larger fortune is essential. In addition three crucial building sites are to be taken into the view. This guidebook provides the crucial knowledge for a sophisticated investment and tax strategy that can be implemented by anyone and paves the way to financial freedom and independence.

• Increase in revenue
• Intelligent investment of capital to generate passive income
• Limitation of the tax burden
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The real estate guide: Capital investment real estate

Rating: 4.6 / 5.0 ( 60 Reviews)

What you will benefit from reading this real estate book:

• The author explains how to finance investment properties with and without equity capital
• Learn where to find investment properties in A & B locations
• The biggest mistakes when buying real estate are revealed to you so you can avoid them from the start
• You get strategies that make worry-free investing possible
• You will be shown the best tips for saving taxes with the purchase of real estate and much more!
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The Real Estate Investors Network

Rating: 4.5 / 5.0 (24 ratings)

Real estate investments always have to do with people. The development and maintenance of a suitable network are therefore essential building blocks for success. The individual network partners that are crucial for your success as a real estate investor are highlighted in a practical manner. Including the real estate strategies of 14 remarkable real estate investors, with all the ups and downs, the personal real estate strategies and tips from practice!

• Investing in small apartments
• Investing in garages
• Fix and flip in perfection
• Buy, renovate, upgrade
• The first property at the age of 18
• Creative real estate upgrades
• Purchase of over 60 apartments in 2 years
• Legal pitfalls in the real estate purchase contract
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Real Estate Fix & Flip

Rating: 4.5 / 5.0 stars (20 reviews)

In this book, you’ll get step-by-step instructions and the know-how you need to build a profitable real estate business as a full-time or part-time fix & flip investor.

Learn here:

• All about taxes and additional costs at the Fix & Flip
• How to get credit for a fix & flip
• What kind of real estate you should buy
• Where to find the right real estate
• How to get off-market deals
• How you generate tons of leads
• How to calculate, plan and carry out a major refurbishment project
• How to build your Fix & Flip team
• How to sell the property quickly and at the highest price
• Buy at Amazon

Related links about the topic Real estate

We’ve compiled other helpful video and book lists on taxes and real estate that may interest you and help you become a true real estate professional. Below you’ll find links to sample topics.

Tax return: instructions, tips & guides for students, pensioners, professionals

Why, why, why are tax returns so important? Not only professionals, but also students or pensioners can benefit from a tax return. If you have never deducted anything from your taxes and have no previous knowledge, you can get super informed in our tax return guide. We show you tips and tricks on how to avoid mistakes and provide you with tutorials that will help you with your first or next tax return. If you want to know even more, then we have a great article on the tax basics: income, sales & Co.

• Video tips on the subject of tax returns
• Book recommendations on the subject of tax returns

Real estate agent

Earning money with real estate is a lifelong dream for many. Marketing and selling luxurious homes in the most beautiful cities in the world. That’s the image that comes to mind when we think of real estate agents. We want to make the journey easier for you and give you a jump start. We offer you a list of the best book recommendations with tips and tricks from the experts: everything from training books, to job aids with forms, to guides with how-to’s on getting started in real estate. Our guides will lead you to success in the real estate industry

• Real estate agent: Book recommendation
• Real estate agent: video tips

Overview real estate XXL: Investment, broker, renting & Co.

Here you get back to the overview of book and video recommendations on the subject of real estate in Germany. Investment cases, capital investment, passive income, house or apartment buy and rent and much more is explained to you here by experts and understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of real estate.

• Back to Book & Video Tips Overview: Real Estate

Investment Income & Taxes

What are capital gains actually? And how do they relate to taxes? How much tax do I actually have to pay on my capital? In these videos, the term capital gains is defined for you. You will also receive useful information on topics such as capital gains tax or the taxation of interest. With tips and tricks from experts, you too can learn with the help of these videos how to save taxes and keep as much of your capital as possible.

Tip! Overview Taxes XXL

Taxes are often a vexing topic, especially in Germany. Wage tax, value added tax, real estate transfer tax and much more: it is not easy to keep track of everything. But if you’re not interested in employing a tax consultant, who can be quite expensive, you need to get to grips with the subject of taxes. We want to help you with that! Here you will find an overview of guides as well as book and video tips on the subject of taxes. Whether we introduce you to individual types of German taxes or you watch a video on the subject of tax returns, all your questions about German taxes will be answered here.

• Book & Video Tips Overview: Taxes

Find a tax consultant: near you

Are you still looking for the right tax advisor in your area? Then take a look at our lists: We have compiled the best-rated tax consultants for you for almost every city in Germany, where you should always receive good advice. You can find more information about tax advisors in your area here.

Capital gains: Definition, Explanation & Tips

Before you get to know and understand the capital gains tax, you should know what exactly capital gains actually are. In these videos, both technical terms will be explained to you comprehensively, so that you soon have the overview and no longer pay unnecessary taxes. Good luck and have fun learning!

Capital gains – what is meant?

In this video, an expert explains to you what capital gains actually are. With the help of this know-how, it will be easier for you to understand taxes and to have a better overview of your tax return in the future.

Capital gains tax

You can find valuable information on the subject of capital gains tax in the following video. It also talks about the final withholding tax.

A for equity gains & Z for interest – taxes

You can learn more about these topics and also about dividends in the following video.

Tips: Net & Tax Return

Also some tips are described here. So who is interested, just scroll down further.

Net: tips on how to get more of it

In the video below, you’ll find tips on the topic including social security contributions and taxes. Stay tuned for tips on how to save.

Tax return tips

Filing taxes is a costly affair for many people. However, there are also some tips to get money back. If you want to learn them, just watch the following video.

Further information on the subject of taxes

Want to know more about taxes, capital gains and finance? Then check out our other book and video recommendations on the topic of taxes. How do you file a tax return and what should you keep in mind? You can find out this and much more here!

Tax basics

Doing your taxes: Do you know how? What are taxes and what are they used for? Here you can find out everything about taxes – from the basics to the different types of taxes and how to file a tax return. If you want to know even more, then we have a great article on the tax basics: income, sales & Co.

• Video Tips: Tax Basics
• Book Recommendations: Tax basics

Tax tips & tax tricks

Tax tips and tax tricks – Almost everyone knows it, it comes the time in the year there it is called: The tax return is due. For many, this is still a vexing topic, but it doesn’t have to be! With the right tax return and the appropriate tips, you can often get a lot of money back. We have compiled the most important and exciting tips and tricks for you, so that you can also save money and look forward to the next tax assessment in the future!

• Video Tips: Tax Tips & Tax Tricks
• Book Recommendations: Tax Tips & Tax Tricks

Back to overview Taxes XXL: Tax return, tips & more

Here you can return to the overview of book and video recommendations on the subject of taxes in Germany. Tax forms, tax rates, tax returns and much more will be explained to you by experts and made understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of taxes.

• Book & Video Tips Overview: Taxes

Building Property: Financing, Tips & Tricks

Here you will find videos, all around the topic of building real estate. Whether penthouse, apartment, maisonette apartment, townhouse or bungalow: You will be explained by professionals how to best build your immobile perfect. On what you have to pay attention to the price, the best steps to the interest and save money. To be able to finance real estate properly, it can make sense to bring an equity substitute into play. But how much equity should you use for your property? In the following videos, real estate financing is explained to you simply.

Tip! Overview Real Estate XXL

The world of real estate is complex and multifaceted. If you want to keep an overview and avoid making mistakes, you should prepare well and clarify as many open questions as possible in good time. No matter whether you want to build, buy and rent out a property or live in it yourself, or even use a property as an investment to generate passive income: The preparation is the A&O. Here you will find articles, as well as book and video tips with successful and helpful books and videos on the subject of real estate – including tips and tricks from professionals and experts.

• Book & Video Tips Overview: Real Estate

Buy or rent?

Buying or renting a property? Most people ask themselves this question. The answer depends on the one hand of course on personal requirements and financial possibilities. What criteria you should pay attention to is explained to you here in the video:

Funding: what’s in it for you?

In the following videos you will find tips and tricks on the topic: building property – how do I finance it? Topics are covered such as: How much house can you afford, how do you determine your loan rate, how much equity should you use, or even how to save as much money as possible when building a house.

How much can you afford?

How much house can you actually afford? Depending on your equity, this video explains how you can afford your dream home.

Financing: Determine credit rate

Here, the professional shows you what your own property may cost, how to determine the right loan rate and how to get the best interest rate for financing.

Equity: How much makes sense?

To calculate your equity, it’s important to know what all equity is. In order to be able to finance real estate properly, it can make sense to bring an equity substitute into play. But how much equity should you use for your property? In this video, real estate financing is simply explained to you.

Save money when building a house

In this video, you’ll learn how to save money when building your own home. With these tips, you too will be able to finance your next property cheaply!

https://www.youtube.com/watch?v=xdPv76JqG3M

What does a prefabricated house cost?

How much house do I get for how much money and how do the home builders and quotes compare in price? Building a home is not a piece of cake. Buying a house or building a house is a big step. Here you will learn how to compare different offers and providers with each other, which details are really important and why it is best to sort out some offers directly.

Errors and tips

The 10 biggest mistakes when building a house

Often the same mistakes happen when building a house, resulting in extra costs. Here we show you what you should pay attention to in order to avoid expensive mistakes.

• No house purchase without land
• Check the building specification
• Negotiate the commitment interest

Tips: for the purchase of used real estate

The purchase of a used property has certain advantages: the property is already finished and you do not have the stress with the craftsmen. But – is the purchase worth it?

The best selling house in Germany

Here you can see the best selling houses in Germany that will give you inspiration.

More video tips on the subject of real estate

Haven’t learned enough yet? We’ve covered many areas of real estate for you with our video tips. For example, areas such as: Real Estate Financing, Renting Property, Finding the Right Realtor, Passive Income through Real Estate and much more. Take a look and become a real estate professional!

Real Estate Investment: Video Recommendations

Real estate is considered a safe and profitable investment. But what is the best way to invest in houses or apartments? Whatever drives you to make a lot of money: Buying an apartment as an investment is the best idea you will ever make. If you want to invest successfuly in real estate, you need a good strategy.

• Real Estate Investment: Video Tips
• Book Recommendations: Real Estate Investment

Sell property

You have invested in your own property or inherited a house and now want to sell it at a profit? But you don’t know exactly which factors, circumstances and rules to consider or which mistakes you should avoid at all costs? We have compiled the most exciting, helpful and informative videos for you to prepare you perfectly for your upcoming house sale!

• Video Tips: Sell real estate
• Book Recommendations: Selling Real Estate

Overview Real Estate XXL: Investment & Co.

Here you get back to the overview of book and video recommendations on the subject of real estate in Germany. Investment cases, capital investment, passive income, house or apartment buy and rent and much more is explained to you here by experts and understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of real estate.

• Back to Book & Video Tips Overview: Real Estate

Book Recommendations: Building property, guidebook, financing & co

Here you will find books by professionals, all about building real estate. They will help you finance your dream home and show you what you should pay attention to. Buy or build? Both options have their advantages. Most people ask themselves this question. The answer depends of course on personal requirements and financial possibilities. Here you will find tips on the topics: What your own property may cost, how you earn money with equity and everything around the topics of financing.

Tip! Overview Real Estate XXL

The world of real estate is complex and multifaceted. If you want to keep an overview and avoid making mistakes, you should prepare well and clarify as many open questions as possible in good time. No matter whether you want to build, buy and rent out a property or live in it yourself, or even use a property as an investment to generate passive income: The preparation is the A&O. Here you will find articles, as well as book and video tips with successful and helpful books and videos on the subject of real estate – including tips and tricks from professionals and experts.

• Book & Video Tips Overview: Real Estate

Earn money with residential real estate: Private real estate investor

Rating: 4.5 out of 5.0 (914 ratings)

You too can be successful with investments in residential real estate! In this book, the trained lawyer and banker Alexander Goldwein explains understandably and with concrete examples, how you can build a fortune with residential real estate and achieve financial freedom. The reading assumes no previous knowledge and is also suitable for beginners. Bestselling author Goldwein has become a self-made millionaire in just a few years with investments in residential real estate. Several of his guidebooks on real estate are #1 bestsellers on Amazon.

In this book you will learn concretely:

• Strategies for safe & profitable investment in residential real estate
• Tracking down lucrative income properties even in tight markets
• Basics of real estate valuation and purchase price determination
• Checklists for professional examination & negotiation strategies for the purchase
• Strategies for optimal financing and leverage of return on equity
• Calculation of cash flow & return with the Excel calculation tool available as a bonus
• Tax-optimised management & realisation of capital gains
• Practice-relevant basics of real estate law (including the particularities of rented condominiums)
• Practical basics of tenancy law (including regulations on rent increases)
• At Buy on Amazon

Immobilien Ratgeber: Investment property

Rating: 4.7 out of 5.0 (58 ratings)

What you will benefit from reading this real estate book:

• The author explains how to finance investment properties with and without equity capital
• Learn where to find investment properties in A & B locations
• The biggest mistakes when buying real estate are revealed to you so you can avoid them from the start
• You get strategies that make worry-free investing possible
• You will be shown the best tips for saving taxes with the purchase of real estate and much more!
• At Buy on Amazon

Real estate financing: The right strategy

Rating 4.5 out of 5.0 (53 ratings)

For owner-occupiers of a property, it is all about the favourable financing of the property. For capital investors, it’s about the best possible financing conditions for the rented property. With this pocketbook you will find out which financing plan is suitable for you.

The guide answers all the important questions about money for a house or apartment, whether for initial financing, modernization or follow-up financing.

• Income and equity ratio: how much house can you afford?
• Interest rate strategies: How long are you tying yourself down for, and which lender has the lowest mortgage rates?
• Repayment Strategies: As an owner-occupier or landlord, what repayment percentage is best for you to choose?
• Financial aid: How do you use money from KfW and Wohn-Riester when financing your own home?
• At Buy on Amazon

Our owner’s manual

Rating: 4.3 out of 5.0 (28 ratings)

The market leader in house building, construction projects and home financing shows you the safe way to your dream home. Whether renovating, refurbishing or modernizing, here you will find your time and cost plan. “Our Builder’s Handbook” is the reliable companion with checklists, sample invoices and concrete planning aids.

Our building guide shows you how to find and buy the right plot of land, how to work out your financing concept, obtain building permits and select the building services. You will get an overview of the current real estate prices, loan conditions, the usual operating costs and the jurisdiction of real estate agents.

Find out everything about smart homes, modern energy concepts for heating and hot water, intelligent control technology and new developments in the field of healthy building materials. With this guide, you can make the right decisions and meet architects, tradesmen and banks at eye level.

• At Buy on Amazon

Building! The great practical handbook for builders

Rating: 4.5 out of 5.0 ( 27 ratings )

Step by step and safely into their own four walls: The large practical handbook “Bauen!” accompanies builders on their way – from the initial considerations through the entire planning and building process to acceptance and moving in. The high level of expertise of the consumer advice centre, the large scope and the very practical orientation make the guidebook the standard work for all builders.

• Numerous checklists help not to forget anything and to check everything thoroughly
• Knowing and eliminating all risks – in financing, contract design and all approval procedures
• Building with ecological building materials, modern building services and innovative energy concepts
• Avoid building botches in a targeted manner: practical checklists for each trade help with quality control With all the important new regulations on construction contract law 2017.
• At Buy on Amazon

Cost and contract traps in construction

Rating: 4.4 out of 5.0 ( 11 Reviews )

Find and eliminate cost and contract traps! Almost everyone who wants to build has a queasy feeling about costs. You have heard too much about cost increases on construction sites. And rarely in life do you enter into such far-reaching contracts as you do when building. Both together hold high risks: Cost and contract traps can provide for quite substantial difficulties or even endanger the entire building project. This guidebook is aimed at all builders who are buying a prefabricated house, building a turnkey solid house or planning with an architect. Over 160 check sheets help to specifically eliminate expensive cost and contract traps when building

• Land purchase check sheets: from development options to legal encumbrances and restrictions – what you need to know and should check.
• Check sheets architect: from the scope of services of the architect to the planning of the house – what you should regulate.
• General contractor and prefabricated house provider check sheets: from building specifications to construction costs – what you need to agree and check.
• Practice shows that many plans, building specifications and contracts are incomplete, inaccurate and very risky for consumers. The guidebook helps to recognize these major and cost-intensive risks and to take targeted countermeasures.
• At Buy on Amazon

Financing my property

Rating: 4.6 out of 5.0 ( 10 Reviews)

If you want to avoid risks and pitfalls when making the biggest investment in your life, you should be fully informed. Competent, concrete and easy to understand, this guide supports builders and future real estate owners
with your individual financing and guides you step by step to the right construction financing.

• Personal financial planning: determine needs, financial resilience and total costs
• Financing options: Bank loan, building society contract and other forms of financing.
• Subsidies: take advantage of low-interest state subsidy loans and “Wohn-Riester” housing subsidies
• Land charge and mortgage: How are real estate loans secured?
• What should be considered during the repayment phase?
• Practical aids: Calculation examples, checklists and a glossary on real estate financing.
• At Buy on Amazon

Purchase and construction of a prefabricated or solid house

Rating: 4.3 out of 5.0 (4 ratings)

This guide was developed directly from construction practice and helps you with many checklists, annotated sample contracts and practical tips:

• Buying a plot of land: what matters and what is important for buildability.
• Wood or solid? The different types of construction and building materials.
• Basement or floor slab? Advantages, disadvantages and costs. – Electrical, heating, plumbing and ventilation: choosing the right building services.
• Search for suppliers and conclusion of contracts: all important legal bases for prefabricated house, solid house or property developer purchase contracts.
• Contract attachments: why building specifications and plans are so important.
• When things get going on the construction site: an overview of the construction process and construction supervision.
• Acceptance and warranty: securing important claims. Turnkey into your own four walls Anyone who wants to build a house often decides in favour of a prefabricated house manufacturer, a solid house provider or a property developer.

Depending on the construction partner, the legal differences are quite considerable and there are also many other things to consider throughout the planning and construction process – in order to avoid cost explosions, poor construction quality and risky contracts. Our large practical handbook accompanies you step by step so that you can safely reach your goal.

• At Buy on Amazon

Further links

You want to buy your own property instead of building it? But you don’t know how or what you have to consider to buy your dream house? The best thing about your property is that you can save money or even make money. In these other articles you will find tips that will help you to make these things possible without making big mistakes.

Entry into the real estate industry

Do you want to enter the real estate industry? Here you will find tips and important know-how on how to become successful in the real estate world. How do you get started in the real estate business, what mistakes and risks are there and how can you avoid them? We enlighten you! Here you will find the best books that explain how to become rich in real estate.

• Book Recommendations: Entering the Real Estate Industry
• Video Tips: The real estate industry

Real estate financing book recommendations: Loans, financing without equity or building savings contract, tips.

Real estate financing – You want to buy a property, but do not know how you can finance your dream? Terms like loan, interest, credit, repayment or building society contract only raise more questions for you? Here you will find all the important information on the subject of real estate financing: from financing with equity to financing without equity to applying for a loan, we cover all the important topics!

• Book Recommendations: Real Estate Finance
• Video Tips: Real estate financing

Overview real estate XXL: Investment, broker, renting & Co.

Here you get back to the overview of book and video recommendations on the subject of real estate in Germany. Investment cases, capital investment, passive income, house or apartment buy and rent and much more is explained to you here by experts and understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of real estate.

• Back to Book & Video Tips Overview: Real Estate

find installment credit: Loan comparison, providers and banks

The most important thing: Don’t be rushed! You pay off a loan for a long time, so you should prepare yourself well to avoid paying hundreds or thousands of Euros too much later.

How important is a credit comparison before the conclusion of a contract?

The most important tip: Don’t just go to your house bank. Of course you would expect to get the supposedly local, best financial product here. According to a current calculation by the portal Smava, we spend over 3 billion euros too much on interest in Germany every year! To be even more precise, it is even 3.5 billion that are paid too much each year by instalment loans. Mostly because you go directly to your house bank and believe that my advisor will already recommend the “best” products to me.

The best alternative to the house bank are:

• comparison portals > direct banks

3.5 billion euros every year! The comparison is worthwhile. Direct banks in particular often offer lower interest rates. For example, because they do not maintain a costly network of branches like the typical banks you know from the city centre.

In the end, it’s like buying a car, nobody would buy the first best model. Of course you drive to different dealers, look online and compare. You do the same on holiday. Countries and regions are compared, flights, hotels and much more.

But where can you find serious installment loans online?

Online you will find a large selection of comparison portals. We have selected top 4 for your installment credit.

Installment credit online: comparison portals

Our recommendation for your research:

Top 4 comparison portals for installment credits (Germany):

1. Smava
2. Verifox
3. Check24
4. Finanzcheck

On the portals you have to enter your desired conditions. It is important that you provide honest information so that the portal can give you a realistic assessment. In general, you should never let yourself be rushed when signing a contract, think, reflect and take your time. After all, you will be paying the installments over a long period of time.

We also have a great tip for your creditworthiness (keyword Schufa): If you apply for the instalment credit with a second borrower, your creditworthiness will improve and you will get lower interest rates! It is also important to always place your Schufa inquiry on the comparison portals as a “condition inquiry”. Because if you send too many inquiries, your creditworthiness will also suffer here due to frequent requests.

Here once again the most important tips summarized:

1. Request as “condition query”, otherwise creditworthiness will be worse

Are banks in portals reputable?

Many of the banks on portals such as Smava, Verifox, Check24 and Co. are unknown! This makes many people sceptical and quickly raises the question: Are the unknown banks on the portals even reputable? The simple answer is: Yes. On all 4 portals you will find serious partners. Many of the banks are so-called direct banks, without branches. They mainly work online and via app on their mobile phones. Therefore these providers are less known. But they are subject to the same rules and laws and are serious providers.

Tip! First places are often advertising

It is important for you, the first places are usually awarded as advertising places. Just like in search engines, the first places are of course coveted, everyone reads them. Accordingly, an advertising partner is often in 1st or 2nd place, not the most favourable conditions for your instalment credit.

Savings Tip: Personalized price

If you need an installment credit quickly, online, you want to treat yourself and afford something! Here we are quickly back to the new smartphone, the chic designer dress or the annual holiday. But, did you know? Prices vary according to the user and the device you are online with!

price difference by device, location & Co

Suppliers have an extremely large amount of information from us. Depending on the device you use to order a product (technology, fashion, flights), sometimes the prices differ. Our data is stored by so-called “cookies”. They tell the provider where we come from, whether we are on the road with the smartphone, tablet or notebook. They also know which operating system is used.

Comparison: Airfare and technology

If you have a new iPhone now, it’s safe to assume that you’re going to enjoy it. Accordingly, the flight will quickly increase by 5 euros.

An example, you see a flight to Palma, Mallorca.

If you take 10 or 15 minutes and actively watch the prices, you will notice that they sometimes differ.

On your mobile phone the flight costs 152.60 and on your notebook at the same time, same destination, airport and co. for only 147.60 – a whopping 5 Euros saved, or 5 Euros spent too much.

+ 4 % more expensive

For technology, the difference is even greater. Here you sometimes find products for 23 Euros and the next device for 37 Euros.
+ 60% more expensive</block quota>
But how does it work? Everything is saved, from where you surf, what you put in the shopping cart, which device you use. Of course we have a few tips on how you can protect yourself a little better.

What can I do against price personalization?

Companies would actually have to inform about the fact that they can set their prices on the basis of price personalization. But the information is then in the small print. Your data will be stored by “cookies”, as mentioned above. So you have to disable them specifically, for example in the “security settings” of your browser. Here you can delete your “browser history”, for example. This makes it more difficult to create profiles. The same also works for research. Don’t use your normal browser window but simply an “incognito” window. Already you surf more anonymously and the tracking of your data is not so easy for companies anymore.  Google also stores a lot of data, because over 90% use the search engine for information. There are many good alternatives to Google that do not store your data, like DuckDuckGoGo.

Tips:

1. Delete browser history regularly in the “Security Settings”
2. You should do research anonymously, for example in the “Incognito window” (always in the upper right corner of the settings, no matter if app, tablet or notebook)
3. Switch search engine! DuckDuckGogo for example, instead of just using Google.

Conclusion: Compare instead of committing immediately

You pay off loans over a long period of time. “Dispo” sounds nice, but it means constant liabilities. This restricts your freedom in the future. So make sure you check whether you absolutely need the installment credit or not. If you need an extra 3.000 Euro to surprise your treasure with a trip to the Maldives, how about La Palmas on Gran Canaria? Beautiful, 30°C all year round, sun and only 3 hours by plane. Saved!

If you do want to take out an installment loan, compare providers and banks. Do not fall back directly to place 1, 2, here, there is often advertising in comparison portals.

Consideration, selection, comparisons – only at the end you should decide on a provider!

Back to the Capital Investment editorial.

Bonds: advantages, disadvantages and default risk

Bonds can be bought through any bank, tradable on the stock market safe government bonds pay little interest, the risk is low almost, there is almost none.

However, the return on bonds is low. Bonds can be bought through any bank. Another advantage, they can be traded on the stock exchange at any time.

What are government bonds?

There are different types of government bonds. Here in Germany, for example, these are the well-known German government securities, they work according to the same principle.

Bonds are issued directly by a state on the capital market, which can use them to finance its own state budget.

The most important at a glance:

• Government bonds are used to finance government spending, so you lend money to the government when you buy bonds.
• Government bonds pay a fixed interest rate to the investor each year, the so-called coupon.
• They are traded on the stock exchange and are therefore subject to price fluctuations, but the risk of default is lower.
• For example, the interest rate and the price of the government bond issued are based on the current credit rating of the issuing country.

Individual government bonds are rated by rating agencies. These use certain generally applicable letter codes. The agencies assign an “AAA” (the so-called “triple-A”) as the best grade.

Down it goes in steps of AA, A, BBB, BB and so on, down to D, the lowest rating. The letters can also be combined with plus and minus for an even finer gradation.

At what point is a bond considered a “junk security”?

Already from the grade BB+ begins the range, which is called junk.

What government bonds are there?

Usually, government bonds (treasury bonds) are available in the respective national currency. Unlike treasury bills (2 years), German government securities have a relatively long maturity. This term is, for example, 10 or even a whole 30 years.

So when you buy a government bond, you as an investor are lending money to the government. This bond is granted for a fixed period of time. In return, you as the lender receive a fixed interest rate, known as coupons. The nominal value of a bond usually remains the same over the entire period.

Even though the basic principle of all forms of government bonds is the same, individual details vary from country to country. In Germany, there are the following bond forms, which are grouped under the generic term “Federal securities” (abbreviation and maturity in brackets):

• Federal bonds (Bunds, 10 or 30 years)
• Federal bonds (Bobls, 5 years)
• Federal treasury bills (treasuries, 2 years)
• Non-interest-bearing Treasury bills (Bubills, 6 or 12 months)
• Inflation-indexed German Government securities (ILB, bonds: 5 years, notes: 10, 15 or 30 years)

British government bonds, for example, are called gilts. In America, government bonds look like this:

• Treasury Bills (T-Bills, 4, 13, 26 or 52 weeks)
• Treasury notes (T-notes, 2, 3, 5, 7 and 10 years)
• Treasury bonds (T-bonds, 10 and 30 years)

Yield with 10-year term

Ten-year government bond yields for selected countries worldwide in October 2019.

Positive interest income

1. USA with 1.7
2. Greece with 1.34
3. Italy with 0.92
4. Spain with 0.22
5. Portugal with 0.19
6. Ireland with 0.02

Negative interest income

1. Germany with – 0.45 %
2. Luxenburg with -0.39
3. Niderlande with -0.3 1%
4. Austria with -0.2
5. Finland with -0.2
6. Japan with -0.16
7. France with -0.14 %
8. Belgium with -0.14%

Source: Statista