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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!

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Interview: Marcus Flemming’s BAME Models – on booker ethics, modelling careers & attitude

Lisa-Marie — Thu, 05 Dec 2019 15:55:43 +0000

BAME Models is a London-based model agency that has made a name for itself as a niche agency for special ethics. We have interviewed the founder of the agency Marcus Flemmings for you. In the interview he talks in detail about the background of the emergence of the agency, the most important points

Modelbooker & Model Manager

FIV: In which countries are you on the road as a model booker and model manager? When, where and how did you start?

Marcus Femmings: I currently manage talent in the UK, Holland, France and America. I’ve been doing this for 10 years now. BAME has only been around for 3 years though.
I first started with an agency that focused on South Asian talent – Indian/Pakistan/Bangladesh/etc, when I noticed that there was a lack of representation in the fashion world for models with this ethnic background. Then 3 years ago I started BAME and it was a resounding success. The term BAME was a British buzzword used by the government and media to describe people they thought were privileged. I decided to take that word and use it as a term of empowerment. We use it to describe everyone-no matter what color, creed, etc. The agency is about proving that anyone with a sincere desire to become a model can do it.We have been very successful in the last 3 years – Vogue, Harpers Baazar, Paris Fashion Week, London Fashion Week, Spiderman: Far from Home, Hobbs and Shaw are just some of the recent clients/projects we have worked on.

As a modelbooker you know your models’ goals, family and favorite foods

FIV: As a model booker, you can have a huge impact on the lives of others. Depending on the assignment or client, you can really jumpstart a career quickly. What do you like most about being a model manager and what do you think are the least enjoyable parts of it?

Marcus Flemmings: I’ve heard people say that it can be hard to be a model booker because you’re constantly organizing jobs for models where they’re making way more than you are. They fly to exotic locations while you’re stuck at your desk. They’re treated like royalty while you’re just a talking head. The fact is, this is a job for a person who wants to get rich off the success of others. It is meant for people who find it fulfilling to see others achieve their goals through your help.
The best model bookers I’ve worked with really care deeply about the talent they work with. They know what their favorite food is, know their family situation, personality, goals, etc. These bookers get their models to their destination no matter where they are working. This gives them a lot more than just a truckload of money.
I prefer to work with models and talent who are ambitious, loyal and humble. Those are the ones I have the most success with. They are a perfect fit for me and my work ethic. What I hate most are models and talent who are ungrateful and disloyal – After many overcome meters, long grooming, blood, sweat and tears around castings and interviews you have organized for them, it can be very frustrating when you are not appreciated and recognized for it. Overall, however, it is an all-round satisfying lifestyle that one has in this professional field.

This is how you start your modeling career!

FIV: Many pretty boys or girls dream of becoming a model. What should an application contain? Can you give them 3 pieces of advice?

Marcus Flemmings:

Natural images.
Honesty.
Humility.

Educate yourself about the particular agency you are applying to. Too often models have applied with pictures with Instagram filters, Without their measurements and with a lack of knowledge about the agency. Then you get models who do the opposite of the above – have the perfect application and then when they get to a meeting, they know nothing about the agency they applied to. Or you hear phrases like “I’m not sure what to do with my life”. This industry is tough, and there’s too much competition to be half in and half out.

FIV: Please explain to our readers what a test shoot is. What is especially important for Newfaces in a test shoot?

Marcus Flemmings: Test shots are the most important weapon in EVERY model’s arsenal. Even for experienced models. Having the best, most current, cleanest images possible is absolutely critical. Think of a car without a beautiful shell – a dynamic design. Beautiful color. Think of the best car in the world based only on its engine design. No one is going to buy it.
Pictures/test shots are the beautiful shell that surrounds a model. You want the best and are constantly reinventing yourself. One GREAT picture can change a career. A BAD picture can change a career.

Appearance is important – attitude is more important

FIV: Explain it to our readers: How does one become a model? Are there other decisive criteria than body measurements and beauty?

Marcus Flemmings: As I mentioned briefly, it’s all mental. I’ve seen pretty average looking guys and girls achieve incredible things. While looks are important, they can never replace ambition, application and attitude. The ability to perfectly master these key elements is beyond anything you can expect from your looks. You also need a thick skin. You’ll get rejected a lot more than you’ll succeed. But it’s the successes that mean more than anything!

FIV: How long do you usually hire new faces? How long experienced models?

Marcus Flemmings: We usually give models a nice 3 month period to grow and develop. After that, if there’s no progress but the attitude fits, we try to build them up or maybe change the approach if it’s not working. New or more experienced models. Same approach. If the wrong mindset is there, we would try to improve it first from day one – if there is no improvement, then we move on.