Buying a property: What to consider ?
Although real estate prices are rising
While house prices have been rising steadily for years, many people still yearn for a home. Real estate is also very popular as an investment because it raises money. What are your requirements for the house or apartment? What should you pay attention to if you are interested in buying an object? We have summarized it for you once.
1. Location, location and again location
Whether you live in the property yourself or your tenants, you can renovate, renovate and refurbishe a house to suit your own expectations. The situation, on the other hand, is immutable and therefore you should not compromise on this. An attractive location and a stable environment is also very important for multi-tenant investments such as shopping malls with multiple tenants. If one tenant after another breaks away due to adverse changes in the immediate vicinity, this can lead to an unsightly chain reaction. A lot of vacancy makes it difficult to find new tenants.
2. Calculate costs and ancillary costs correctly
When buying a property, there are additional purchase costs – that’s no secret. Depending on the region, size and price of the property, these additional purchase costs may vary greatly. Find out more in advance and calculate the incidental costs. In addition, there is the administrative burden when buying a residential property. Don’t underestimate that! A professional property management costs money, which should also be taken into account in advance.
Keeping purchase costs low is the goal of every investor. For example, a so-called share deal can significantly reduce the cost of notary and real estate transfer tax. The basic idea is to transfer the property to a company first and only then to buy shares of that company.
When buying houses in great need of refurbishment, refurbishment costs must be set correctly in advance. You can get offers in advance to get a realistic picture of the expenses. Important: Don’t build dream locks! Even if a cheap purchase price tempts you, the dream can quickly turn into a “scrap property”.
3. Commercial real estate with a single anchor tenant? Check the demand for a new rental!
For example, you buy a hotel that is rented to the operator. The Corona crisis shows impressively the shaky legs on which the tourism industry stands. The operator files for insolvency and terminates the lease. Now you’re standing there with your commercial property, which you have to rely on the business of a single tenant.
Clarify the following questions in advance: How high is the demand at this point, able to use this property at this time? Can you take over the business as an owner and do you want that as an investor at all?
4. What to consider when buying land
When financing the construction, keep in mind that the property alone does not bring you any income. Clarify with your bank that you want to finance the property including the construction costs. This includes paying the land not according to forecasts, but only the price for the approved building floor area. How do you do that? Get offers from developers or different service providers in advance before Ot. The more precisely the costs are calculated, the more precisely you can finance. This saves an immense mountain of costs.
Long-time experienced real estate agents wanted for existing customer support!
5. Examine Division 3 of the Land Registry
Before purchasing an object, you should review Department 3 of the Land Registry. The purchase price called should cover all charges, otherwise you will not receive a cancellation permit from the respective land debt holder.
6. Check the requirements of the building authority in advance
When you buy a property, do you already know that you want to split the condominium? Be sure to check with the building authority in advance whether a permit will be issued. Inquire about possible requirements (parking, green area, playground, etc.)!
The purchase of a listed property can bring tax advantages – but maintenance can go into the money and be characterized by severe restrictions. Before purchasing, check which renovations are approved and which are not!
7. Requirements for foreign investors
In Germany, foreign investors have different requirements for the purchase of real estate. Inquire in advance! If you want to acquire shares in a real estate company, this is possible without any conditions.
8. Condominium - house money and voting rights of the partial owners
Are you interested in buying a condominium within a house community? Here are a few things to keep in mind:
– Find out about the amount of house money and check if heating and hot water are included!
– Check existing administrative statements!
– Have reserves already been created? At what level?
For certain investments (roof renovation, raw lines, elevator, etc.) the individual owners are asked to pay. If no reserves have been created, requested amounts can quickly skyrocket and unexpected costs ruin your investment project. In this context, also pay attention to whether there is an owner who has the majority of the voting rights. He could then distribute investments to part-owners at his discretion, because the majority always decides!
Do you have any questions or would like to test the real estate franchise?
We look forward to hearing from you!
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