When is it worth buying property?
If you want to be a real estate investor, it is very important for you to know that When is it worth buying property? Real estate buying is booming – year after year, there are more and more offers in the big cities, which are located in a central location and bring dozens of interested parties with them. But is it worth buying a property right then? Not always. However, many people are thinking about buying an apartment as it is a better alternative. If the desire to buy a property is there, good planning is important. Due to the constantly rising prices, rents are also rising, which is not very bad for the landlord.
If you enter the real estate market early, you can sell your buildings expensively or get rental income. Real estate has long been considered one of the safest investments. There is no suitable time for the purchase of real estate. However, it is worthwhile when the interest rates on real estate financing are low and long-term fixed interest rates are possible. The purchase of real estate is worthwhile even if the real estate prices are right and a decent return is possible.
In addition to lucrative financing, there are a few other aspects that are important when buying real estate. It is equally important to find a suitable property. In order to be able to find these, the following factors are advantageous:
Equally important are reliable tenants to find a good investment property. We should not invest in more structurally weak regions. A good return depends on the location of the property. In cities such as Munich and Frankfurt, significantly higher rental prices can be seen, so that a good return is possible. Smaller apartments with a small square meter are more in demand. Real estate between 60 square meters and 80 square meters are often searched and are ideal as buyers.
It is also relevant that there are no high renovation costs when buying a property. This can prolong the rental and cause complications.
It is rarely possible to say in general terms how high the return on the desired property is. Before a property purchase occurs, the buyer can calculate the return. All that is required is to compare the cost of acquisition with rental income. Further costs are composed by the actual purchase price of the property and the incidental costs. The ancillary costs consist of brokerage fees, real estate transfer tax and the entry in the land register by the notary.
At the same time, it is worth creating reserves in order to be able to pay for repairs or other repairs at the house in case of an emergency. This should be put on an equal footing with the operating costs, the tax aspects and the maintenance costs incurred in the purchase of real estate.
Buying real estate also brings some risks. An absolute return killer is the running costs of real estate. Miscalculation of ancillary and renovation costs can quickly pose a risk. Often these burdens are more than underestimated. Many buyers do not plan the high cost of repairs or recognize immediate remediation measures. New buildings or properties in modern construction carry a lower risk in the area of renovations.
This should be included in the calculation before the real estate purchase. The rental price brake is a political instrument that every buyer must take into account. It has now occurred in many large cities. The rental price brake states that the rent for new rentals or property purchases is not simply set arbitrarily. In this case, the ceilings must be adhered to.
However, if you buy your object again, you do not have to pay attention to it in the calculation. The rental price brake applies only to the purchase of existing buildings.
Furthermore, the risks are that credit institutions offer maturities that are too long. Low interest rates are not everything. Finally, the buyer must be able to maintain the repayment rates on a permanent basis. Similarly, there may be a risk if financial losses arise in the event of an early sale of the property. Especially with the premature termination of a real estate financing, there may be prepayment compensation or other costs, which often amount to up to 1000 euros or more.
Do you have any questions or would like to test the real estate franchise?
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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Real estate prices analysis for 80 locations throughout Germany
E1 Holding offers location analysis for real estate for almost 100 cities nationwide in all federal states. Our well-trained experts for real estate and investments as well as off-market real estate in various locations and sizes take a professional and authentic look at the real estate market at the respective location. In doing so, we determine realistic and continuously updated real estate prices depending on the market situation as well as a corresponding real estate forecast. We are constantly expanding the list of alphabetically ordered locations and intensively expanding the data base for more and more cities. In addition to investors and investors with budgets of all sizes, our nationwide location analyses are also valuable for housebuilders when deciding on a location. Click here
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