Real estate financing: How to Invest in Real Estate?

How to Invest in Real Estate? What needs to be considered?

First and foremost, real estate financing is financial support for the property. The term construction financing is also often used for this process. In countries such as Austria and Switzerland, there is talk of mortgages and mortgage loans.

Financing modules are divided into equity and debt capital. (Private financing for residential real estate consists of at least one of the two building blocks.)

It is not uncommon for banks to differ in areas such as interest rates, contracts and condition models in terms of financing. These different options can be unsettling at first, but they also have advantages. The above-specified contract options are not created by the banks as expected, but by credikbrokers. As these contractual options are disclosed, this creates competition that allows for different price ranges of financing.

How much equity is needed for this ?

As a rule, an estimated 20 to 30 percent equity is needed for construction financing. It is, of course, advantageous to bring in more equity when it comes to privately used real estate. The main focus here is to keep the loan rate low so as not to have to pay too high interest rates in order to be assured of financing another construction in the event of a construction. It should be remembered that it offers better bargaining opportunities on the part of the bank if you have not financed your property almost completely. Another important aspect in this case is the best possible capital investment, which should survive the loss of value due to inflation and generate returns. Investing in a property is an option for many private investors, as it seems sensible to buy a property that can also be used for private purposes instead of investing in securities.

Additional incidental costs apply

Every purchase of a property is associated with the associated incidental costs. These costs are determined and collected in relation to the property. A distinction is made in the following categories:

  • Purchase property used or as a new building
  • Construction project realized by developers
  • Construction projects in self-energy without construction

Long-time experienced real estate agents wanted for existing customer support!

Additional collateral - Use non-liquid assets for low interest rates

As we know, non-liquid assets are not considered equity, but can help attract lower interest rates on land.

There are two important aspects of lending on the part of the Bank:

  1. Is the borrower able to finance the instalments up to the agreed period?
  2. What can be done if the borrower does not manage to comply with the demands?
From these uncertainties, banks require borrowers to use their equity. The use of equity capital thereby secures both parties more and reduces risk.

To avoid credit defaults that involve high costs, banks create statistics on default risk. If a borrower does not meet the requirements, there may be a surcharge on the terms or even the rejection of the application for a loan. If the borrower has good financial resources and meets the statistically calculated requirements, the condition design of the real estate financing will be in his favor.

  • Additional properties:Additional properties can also be used as additional security, although it must be noted that costs may also be incurred when registering or cings of land debt.
  • Credits in insurance (life or pension insurance) Savings plans and fixed-term accounts:
    These types of credits are comparable to cash balances, but they are not immediately available. However, this does not represent a disadvantage, but is all the more suitable to serve as an investment. This credit can of course also expand during the duration of the credit agreement.
  • Securities:Securities are also suitable as additional collateral, but it must be noted that banks often only include them with 60 percent of the market value.

Benefits for Investors & Owners of Registration with E1 Holding

  1. Competent advice on your investment.

    Many years of experience with large investments & large-scale projects.

    Our references speak for themselves.

    We bring together investors and owners for large-scale projects.

Do you have any questions? Want to know How to Invest in Real Estate?  or would like to test the real estate franchise?

We look forward to hearing from you!

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The E1 Investments concept offers a proven system for the solid development of a business as a broker and owner of a real estate business. E1 Real Estate has the infrastructure and operating systems that enable us to offer first-class services with a team of brokers. You are investing in the market of the future.

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