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Investment risk checklist: avoid mistakes when investing in real estate

Team — Wed, 18 Oct 2023 08:46:55 +0000

5 mistakes investors make – that you should avoid. If you want to be successful with your first investment, avoiding these 5 mistakes should be your top priority. Learn from the mistakes of others and become a real estate professional! Click here to return to the guide: Real estate as an investment.

5 mistakes! What to look out for when investing?

Your goal is financial freedom? Anyone can build wealth with real estate. Investments allow you to build up money over the long term. By investing, you can make your real estate work for you and benefit from interest, dividends and price gains over time. However, investing in real estate without any knowledge is too risky. You don’t have to reinvent the wheel. Every real estate professional has already made mistakes that you can benefit from. Stick to this checklist, avoid the 5 mistakes and minimize your risk of failure. Let’s go!

Risk checklist: What you should avoid

Stick to these points and nothing will stand in the way of your successful investment:

Don’t invest in real estate with too low a return
Designing financing for the long term instead of the short term
Bring in enough equity
Financing compared
Calculate net return not just gross return

Find out now what the 5 biggest mistakes are that you can make when investing.

Real estate as an investment: avoid mistakes

Investing in real estate as a capital investment can be a wise decision to achieve long-term income and asset growth. However, there are also risks and mistakes that should be avoided. Here are some tips from real professionals on how to avoid mistakes when using real estate as an investment.

1st error: yield below 9%

Why should the return on an investment be over 9%? When buying an investment, you shouldn’t just ask yourself the question: How much will the property earn me? You should also ask yourself: How much do I actually need to cover the costs? As a rule, you should assume a 2% repayment of the purchase price and 2% maintenance costs. After all, an investment property has to be paid off and rented out, which involves financial obligations. With the current 5 % interest rate, you then arrive at a return of 9 %, which the property must generate. So if the yield is currently below 9%, you are making a loss on the investment. It is better to stay away from such properties.

2nd error: short-term loan

Why should you choose long-term financing over short-term investments? In two words: Inflation and capital appreciation. When financing an investment and considering the impact of inflation, it is crucial to consider long-term strategies. Inflation leads to a loss in the purchasing power of money over time, which is why it is more favorable to finance long-term.

What are the advantages of long-term financing for you as an investor? Long-term loans usually have lower interest rates than short-term loans. This can significantly reduce the overall cost of the investment. Long-term financing offers stability and planning security. You know exactly what your monthly payments will be and can manage your budget better. Real estate generally increases in value over the long term. If you are buying real estate to benefit from the increase in value, long-term financing makes sense, as you need time to let the value of your property increase.

Long-term financing can also offer tax advantages, such as mortgage interest, which is tax-deductible in some countries. Long-term financing reduces the risk of interest rate changes. With short-term financing, you are more susceptible to interest rate increases that could increase your costs. Long-term financing can stabilize your monthly cash flow, as the installment payments are often lower than with short-term loans. This makes it easier to cover ongoing costs. Long-term financing offers flexibility. You can use your capital over the longer term and have the option of renting out the property, which can generate additional income.

The advantages of long-term financing at a glance:

Lower interest rates
Planning security
Benefit from real estate appreciation
Tax advantages
Risk minimization
Stable monthly cash flow
Flexibility

3rd error: below 20 % equity ratio

Why should you use at least 20% equity to finance an investment? A higher equity base often leads to lower monthly repayments, which can improve the stability of your cash flow. This is especially important if you are using rental income to cover loan installments.

4th mistake: do not compare financing

Comparing financing is important to ensure a successful investment. Why? By comparing financing options, you can identify the most favorable loan terms, such as lower interest rates and lower fees. This helps to minimize the overall cost of the investment. Depending on your financial goals and investment timeframe, different financing options may be more suitable. A comparison will help you choose the one that best suits your goals.

5th mistake: relying solely on gross return

The gross return merely serves as a basic measure for initial considerations and decisions. It provides a rough overview of the profitability of a capital investment. It can be helpful for quick orientation. However, the net return is the more meaningful indicator. Its importance lies in the fact that it is more comprehensive and precise, as it includes all actual income and expenses. This includes expenses such as taxes, insurance, maintenance, administration and financing costs. By taking this into account, the net yield provides a more realistic assessment of the actual return on your investment.

Tips: become successful with a capital investment

More tips from experts on becoming successful with an investment in this informative video.

Real estate as an investment for beginners: Guide

Want to get started with real estate now? Read one article, that’s all you need for the most important basics of investing in capital assets. Start your career in real estate now with the investor’s guide.

Guide for beginners

For whom is real estate a worthwhile investment? Requirements for asset accumulation

Team — Wed, 18 Oct 2023 08:46:51 +0000

For whom is real estate a worthwhile investment? – Does financial freedom, passive income and wealth accumulation sound tempting? So you want to invest in real estate, but are new to the subject and want to know whether you should take the plunge into the real estate sector. Then this article will help you. Click here to return to the guide: Real estate as an investment.

For whom is a property worthwhile as an investment?

Capital investments are currently becoming increasingly popular as protection against inflation. Inflation rates can reduce the purchasing power of your money over time. Real estate can serve as protection against inflation, as it tends to go hand in hand with rising prices. Rental income and the value of the property can thus benefit from increases in inflation.

Acquiring real estate as an investment is already a proven strategy for building wealth and generating passive income. However, this approach is not equally suitable for everyone. To assess whether real estate as an investment is right for you, you should consider your individual goals, financial resources and risk tolerance. In this article, we take a look at those for whom real estate investment might make sense.

Prerequisites for a successful investment

If you want to invest successfuly in a capital investment, you should be able to fulfill the following 5 requirements.

Financial stability
Clear investment objectives
Willingness to take risks
Market understanding
Patience

Nothing works without financial stability

You should have sufficient financial resources to finance the investment and cover any unexpected expenses. This can include equity, savings or guarantees. As a rule, a capital investment is financed with at least 20% equity at the bank. You can only get access to loans if you have sufficient liquidity. You should therefore calculate beforehand how expensive your property can really be. The ancillary costs of the purchase should also be taken into account.

Tip: Many readers are asking themselves at this point: How much income do I need to be able to buy my first property? Whether it’s a condominium or a house, Immobilien-erfahrung.de explains the rule of thumb: Repayments, interest and ancillary costs must not exceed 45% of your net salary. Click here for the article:

What is the minimum salary to buy a house?

Clear goals, profitable investments

You should know why you are investing in an investment. Is it long-term capital appreciation, income generation or diversification of your portfolio? Your goals will influence your choice of asset class and strategy.

Risk appetite & risk management

Every investment involves risk. You need to know your own risk tolerance and make sure that your investments match your risk profile. Properties in C locations are usually associated with higher risk. B-locations often offer a good balance of risk and return.

You can find more information on the various real estate locations and which investments you should or should not invest in in our guide for investors:

Real estate as an investment for beginners

Market understanding is the be-all and end-all

You should understand the specific asset class you want to invest in, be it stocks, bonds, real estate or other assets. Market knowledge is key to making smart decisions. How to build wealth with real estate or investments is still a mystery to you? Then quickly get the most important basics here so that you can start investing in your first capital investment straight away:

Guide for investors

Patience is handsomely rewarded

Patience is not only a virtue, it also brings you big money. Why? In one word: real estate appreciation. Capital investments often require a long-term view. Patience is necessary to achieve appreciation and returns over time. Real estate as a capital investment is best suited to investors with a long-term investment horizon. The value of real estate usually increases over time, and the rental income can lead to a stable income. If you are prepared to invest your money for years or even decades, real estate can be a good choice.

Tip! Diversification: Real estate investments offer a way to diversify your portfolio. If you already invest in stocks and bonds, adding real estate can provide risk diversification, as real estate markets often perform independently of other asset classes.

Real estate as an investment: secure financial freedom, passive income & pension – Guide

F_kinski — Wed, 18 Oct 2023 08:46:48 +0000

Real estate as a capital investment – investing money in real estate for the long term: What really matters! Are you looking for a clever way to invest your hard-earned money wisely? Then you should definitely consider investing in real estate as a capital investment. But be careful, not every property is automatically a cash cow. In this article, we’ll show you what really matters in order to get the best return on your investment.

Is it worth investing in capital assets?

Does real estate make sense as an investment? Capital investments are currently becoming increasingly popular as protection against inflation. Inflation reduces the purchasing power of your money over time. Real estate increases in value over time and can therefore serve as inflation protection and wealth accumulation. For more and more people, capital investments are the path to financial freedom and a secure pension.

For whom is a property worthwhile as an investment? Purchasing condominiums as an investment has become a proven strategy for generating passive income. However, this approach is not equally suitable for everyone. To assess whether a property as an investment is worthwhile for you, you should consider your individual goals, financial resources and risk tolerance.

Real estate as an investment: that’s what counts!

Investing in real estate can be a smart investment if you pay attention to the right factors. The choice of location, return targets and the right financing are crucial to your success. Remember that real estate investments require patience and are best invested for the long term. If you keep these points in mind, real estate as an investment can be a lucrative investment that offers you long-term financial stability.

That’s basically what matters:

The right location for the property
Cost-covering return and positive cash flow
Long-term financing with 20 % equity

Let’s take a closer look at the whole spectacle.

The right real estate location: (A, B, C location)

The right location: The first rule of real estate investment is: location makes all the difference! You need to be aware that not every area provides the same returns. A-locations, such as sought-after city center locations, often offer the highest rental and appreciation opportunities. B-locations, i.e. areas close to the city, can also be attractive. C-locations, the outskirts or less popular neighborhoods, are often less expensive, but also involve more risks. Choose the location wisely, as it has a significant influence on your return.

Return and positive cash flow

How to find real estate with good returns: Your investment should be worthwhile, right? To achieve a solid return, aim for at least 9%. This means that after deducting all costs (maintenance, taxes, insurance), you still achieve a positive return. A positive cash flow is crucial to generate profits beyond cost recovery. Remember that real estate investments are for the long term, so it’s worth waiting patiently for a good return.

The right financing for capital investments

Financing is a key aspect of your real estate investment. We recommend putting at least 20% equity into the property. This reduces the risk and increases the chances of a positive return. The loan should pay for itself through the rental income. This means that the monthly rental payments cover the loan installments and also generate a profit after some time.

These were the essential basics of what is important when investing in capital assets. Do you want to get started with real estate now?

The first capital investment: guide & tips

Read an article and take away the most important tips for investing in capital assets. Start your career in the real estate industry now with the investor’s guide. Learn how to do it:

Real estate as an investment for beginners

5 mistakes! What to look out for when investing?

Successful investments are the key to financial stability and independence. But how do you achieve this goal? In this article, we present you with a useful step-by-step guide on how to invest successfuly. Whether you already have experience or are new to the world of investing, this checklist will help you achieve your financial goals. Get started with real estate now!

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Investment book recommendations: Basics & C0.

Would you like to invest in a property as a capital investment? For the bookworms among you, here are some great book recommendations on specific real estate topics such as taxes.

Video tips: Real estate as a capital investment

Do you prefer to learn with helpful videos? Then these video tips are just right for you. Find out about the basics of real estate investment now!

Learning tips: Building wealth with real estate

No time to study? With these real estate podcasts and real estate apps, you can get all the important information you need to be successful in real estate on the side.

Property developers in Munich: Real Estate, Equity & Co.

Lisa-Marie — Wed, 11 Nov 2020 12:27:53 +0000

Property developers in Munich: When looking for the right property developer, you will come across a wide variety of companies with different offers. In the following summary you will find a list of the best property developers in and around Munich including rating, location and contact. All are professional companies with different advantages, from which you can choose the right partner.

Concept Bau GmbH

Concept Bau: Project developer and builder for Munich and the surrounding area. Since 1982 a too reliable partner for new build condominiums, terraced or also semi-detached houses. Projects such as condominiums in Milbertshofen with 86 units or the Plaza Pasing with stylish condominiums in a prime location are currently part of the repertoire.

Rating: 3.8 out of 5 (15 ratings)
Hans-Cornelius-Strasse 4, 82166 Gräfelfing, Germany
089 2123980
Conceptbau.de

Alpine real estate

Alpine real estate: The developer for hotel apartments or chalets in the mountains. Looking for a modern apartment, an alpine hut or a house by the lake? Current offers such as the Sonnenhotel Weingut Römmert, which is located directly at the winery, but still only a few minutes’ walk from the centre of Volkach, or the quaint but high-quality chalet in traditional style in the Monte Lussari ski resort in Italy make it possible.

Rating: 4.5 out of 5 (15 ratings)
Wolfratshauser Str. 119. 82049 Munich
089 7596988820
Alpenimmobilien.de

Baywobau Baubetreuung GmbH – Munich

Baywobau – with passion and the highest construction quality for more than 54 years at work to make your home an oasis of well-being. Projects such as attractive 1- to 3-room apartments in the trendy urban district of Obersendling or the innovative Z city quarter for every phase of life are part of the Munich product range.

Rating: 2.8 out of 5 (22 ratings)
Geyerstrasse 32, 80469 Munich, Germany
089 286500
Baywobau.de

MünchenBau

MünchenBau: Highest quality for discerning customers. The developer impresses with residential and office concepts, such as the 33-hectare “Belvedere” quarter in the middle of a green oasis, close to the pulse of life, or the unique, noble “Lichthöfe”, an office building in factory design, which is to be completed by the end of 2023 and offers ample space for the creation of innovative ideas on 9,000 square metres of office space.

Rating: 4 ,2 from 5 (11 Reviews)
Franziska-Bilek-Weg 9, 80339 Munich, Germany
089 74366300
Muenchenbau.com

RS-Wohnbau GmbH

RS-Wohnbau GmbH: 35 years of quality and already 700 completed houses and 6000 completed condominiums in Munich. Current projects include a multi-family house with elevator and underground parking in Maxhof or the neoclassical city palace near Schlosskanal in Obermenzing.

Rating: 4.5 out of 5 (41 ratings)
Steinsdorfstraße 13/ 4th floor, 80538 Munich
089 2903710
Rs-wohnbau.de

DEMOS Residential Construction Ltd.

Demos Wohnbau convinces with modern condominiums such as the project “die neue Gerberau” in Munich-Karlsfeld. In the future, among other things, the Alexis Quartier is to be built in Munich-Perlach, directly on the avenue. Currently, many condominiums, houses and commercial spaces are on offer.

Rating: 3.7 out of 5 (26 ratings)
Thalkirchner Str. 26, 80337 Munich
089 231730
Demos.com

Hachinger Bau GmbH

Hachinger Bau: expert for construction projects in the Munich area. Whether small, individual residential complexes or semi-detached houses with five to 15 residential units – the excellent standard of living is the top priority here.

Rating: 4.0 from 5 (5 ratings)
Münchner Str. 70, 82008 Unterhaching
089 67359530
Hachingerbau.de

HI Wohnbau GmbH

Hi Wohnbau: The competent partner for the acquisition of quality residential property. The semi-detached villas with six rooms or the PAOSOPARK with condominiums in Munich-Passing are examples of current projects.

Rating: 4.2 out of 5 (15 ratings)
Seidlstrasse 23, 80335 Munich
089 20603300
Hi-wohnbau.de

DOMINO Bau- und Handels GmbH

DOMINO Bau- und Handels GmbH stands for stylish and high-quality living with well thought-out room concepts and high-quality furnishings. Villas, semi-detached houses but also apartments are part of the repertoire. Current projects include an idyllic apartment building with seven units in Alperlach or six purist townhouses in Obermenzing.

Rating: 5.0 out of 5.0 (9 ratings)
Winzerstraße 47, 80797 Munich, Germany
089 3079220
Domino-construction.com

Sell a condominium – Procedure, find a buyer & valuation

Lisa-Marie — Thu, 11 Jul 2019 10:00:54 +0000

There are many ways to become the owner of a condo. When young people own condominiums, the reason is usually an inheritance. But there are also other possibilities, as some young people choose to pay a condo in installments rather than spend their money on the monthly rent. Both cases have different advantages and disadvantages.

Sell property: You should consider this

Anyone who decides to sell their condominium is faced with a number of challenges. We have summarized for you, the most important things that it applies to note in this article. From the valuation to the handover of the property, everything is included.

Procedure & planning of apartment sale

When planning the sale of a condominium, a number of things need to be taken into account. In addition to the classic documents in which the apartment does not differ from the home, further documents and proofs are necessary. This is particularly important when it comes to a rented condominium or a community of owners as a capital investment.

There are documents that are especially important and that you should get: The land register extract that gives clarity about your ownership.

If, on the other hand, you are still paying off the apartment and the bank is still in the land register, you should consult with them before the planned sale and discuss the remaining repayment in detail. A floor plan is absolutely necessary and the proof of fire insurance, the building description and the energy certificate are of enormous importance.

If you want to hire an estate agent to sell the apartment, you can insist on the commission payment by the buyer according to the legislation. In case of a rental, you as the owner bear the costs. A decision between selling a condominium and renting it out is a lot easier.

When it comes to private sales, you’re gonna have to take care of support. As a rule, you will need a notary, a lawyer and a tax advisor to advise you on financial losses incurred by foregoing tax savings. Since the market value determination is also necessary, you will also need an expert.

The bottom line is that the cost of individually commissioned services to sell the condo is higher than if you decide to cooperate directly with an estate agent and decide to purchase all services from a single source. You should plan the sale of the condo favorably and calculate how you can best save money, spend the least time and do not have to visit a different contact point for each service.

The valuation

In order for you to obtain a fair price for your condo, it is important that you first determine the fair value. Because what feels worse than selling the inherited home of your parents, where you spent your entire childhood and with whom you associate the most beautiful memories, for a lower value than it would actually be worth. You have taken your first steps in this property, spent cosy evenings together with your family or searched for the best hiding places.

If you are emotionally attached to your condominium, you should consider whether it might not be best to hire a real estate agent to do the valuation of your property. There are many different factors that are taken into account when determining the value of an apartment. The market value is the most important basis that must be determined.

Find buyers – Tips & Tricks

Especially if you are emotionally attached to a property or have lived in a condominium for a long time, it is important for many people to find a buyer who meets their expectations. If the bond is particularly strong, some even go so far that they say the condo will only be sold to relatives or close friends. For those it is important that they plan enough time to find the right buyer. If you have certain wishes regarding the buyer, you should agree these criteria in advance with the broker.

Problems in case of sale

Of course, it is not always the case that the sale of a condominium runs smoothly. Problems may occur at different points throughout the procedure. In order to be sufficiently prepared for possible problems, you should pay attention to the following

disagreements with administrator
several owners

Possible costs

Whoever sells his condominium is often interested in achieving a price similar to the one he himself once paid for the property to achieve. Once the valuation of the condominium has been completed, the question arises as to whether there are any further costs that one should be prepared for. Of course, it is not possible to calculate a flat rate for the costs incurred in selling an apartment. However, you can expect that some of these costs will be incurred by you:

Value assessment fee by broker or other expert
Speculation tax
Exemption from charges costs
other costs for real estate agents
possible advertising costs, e.g. for placing an advertisement in the newspaper

Sales experience

You still don’t feel sufficiently prepared for the sale of your condo? Then it can be useful to exchange views with relatives or close friends who have already sold a condominium. It is often the case that former sellers already know exactly what is important and have valuable tips for you. With these valuable tips you can save not only a lot of time, but also money. Whether it’s a recommendation for hiring a broker, or tips on how to find out who might be the best potential buyer. – Good luck.

Frequently asked questions before selling the apartment

Not infrequently there are still some questions that arise when you have decided to sell your property. We have compiled the most frequently asked questions for you so that you can find the answers to your questions as quickly as possible.

Who bears the notary costs when buying an apartment?

If a house or apartment is sold, the supervision of a notary is absolutely necessary. As a rule, it is the case that the notary’s fees for the sale of real estate are largely borne by the buyer. There are also special agreements in which a part is taken over by the seller and a part by the buyer.

What is a declaration of partition condominium?

A declaration of partition is of particular interest to owners who own a property together with other people. The declaration of partition specifies exactly how the property was divided among the owners.

What is a Certificate of Completion?

The question of what a closure certificate is is is a recurring one. A Completion Certificate is a certificate confirming that a condominium or part ownership has been sufficiently completed from other dwellings and rooms.

What is a special right of use?

The special right of use is interesting for owners who own a property together with other owners. A special right of use establishes a power that an owner may use certain parts of the common property alone.

What percentage notary costs?

The buyers in particular are interested in the amount of notary costs they have to expect. The notary costs are always different, because they are based on the purchase price of the property. As a rule, this is 1.5 to 2 percent of the purchase price.

What is the real estate transfer tax?

Real estate transfer tax is levied on the basis of the Real Estate Transfer Tax Act. When a plot of land or part of a plot of land is sold, it is calculated and passed on to the municipalities.