In recent years, constant news of financial and banking crises has increasingly unsettled investors. Once rail equity investments and stock market speculation as the safest way to earn large dividends and create a capital investment for retirement, negative experiences have shown that such investments involve a large risk. This is why real estate has become a popular capital investment today, offering both flexibility and crisis protection.
Why a property is a crisis-independent investment, and which factors you should consider when choosing your property as an investment so that you can sleep peacefully at night, I would like to explain to you today in this article.
The crisis-proof type of capital investment
From an economic point of view, real estate today is regarded as a safe investment that remains unaffected by inflation. The reasons for this are obvious.
Who invests today in a real estate, has as a rule the possibility to live in these itself or also to let. Since with the inflation also the rent rises, the investment “real estate” keeps its value also beyond years. If the real estate is paid off, then one can live in the pension age rent free or profit also from the rent incomes. Read more on Investing in Apartment Buildings vs Single Family Homes.
Beyond that naturally also the possibility remains open to borrow on the real estate if necessary. Thus the capital investment can adapt itself into a real estate to the respective situation of its owner. Only with real estates you have a high net yield, an increase in value of your invested capital, the necessary security and even still tax advantages as cream on top of it .
Opportunities for investment in real estate
There are a whole range of different options when you decide to invest in real estate.The dream of owning your own home is a reason for many people to decide to buy a single-family home. But you should not make the mistake and consider your home as an investment. A home of one’s own is not an investment and should therefore not be suitable as an investment.
If you have no experience as a real estate investor, I advise you to start with a condominium. So you learn quickly what really matters and make your first experiences with an investment in real estate.
One way to achieve a particularly good return is to buy an apartment building.
This would be the next step if you already own a condominium as an investment. If you increase your real estate portfolio bit by bit and build up a financial freedom. Here it is particularly important to attach importance to a good location of the property in order to avoid vacancies and problem tenants. In today’s metropolitan regions, there is great demand for residential space and an apartment building in such a region can generate excellent returns.When purchasing a property, it is important to ensure a favourable location and easy lettability, as these determine the value development of the property over the years.
You also have the option of investing in commercial real estate. At the moment they offer an excellent return, but in the long run you should be careful. The development of office space, for example, is difficult to predict, as ageing and the increased use of the home office could lead to less demand for office space in the future.
Indirect capital investment in real estate
If you would like to invest in real estate, but do not want to own an object directly, you have the option of investing in a real estate fund. With very little money you can invest in an open-end fund. Often participations are already available starting from 50 euro and there are annual profit distributions. Who has a higher sum available for the capital investment, can decide also for a closed real estate fund, with which only within a certain period can be invested.
With such funds one naturally takes an entrepreneurial risk and can sell shares before the end of the term only with difficulty. If you are interested, I will be happy to discuss real estate funds again in the following articles.
Advantages of a real estate capital investment
A property is an excellent investment if you don’t want to worry about fluctuating stock prices all the time. Real estate, like money, is not affected by inflation and deflation. Real estate is stable in value and also increases in value over the years. Property prices are rising and in many areas living space is more and more in demand.
If you finance the property with a mortgage loan, the debt interest is regarded as advertising costs and can be deducted from your income. The tax advantages are highest if you invest in a listed property. In addition, however, I will publish in the future still own articles.
The investment in a real estate makes sense especially if you are looking for a long-term investment. Tax advantages and state support for the acquisition of the property can be destroyed if you sell the property prematurely.
What kind of investment in real estate have you already thought about? A condominium, an apartment building or a commercial property? I would love to hear your opinion! I am looking forward to your comment.