Investing in Real Estate - The Best Tips for Your Successful Investment

Are you interested in real estate? Do you already live in your own home or do you rent out an apartment, a house or a garage to generate additional income? Keyword: passive income. In this collection you will find many tips and interesting information about real estate as an investment: "concrete gold".

Great tips and information for successful real estate investments 

Advantages of real estate as a capital investment

• Real estate is considered a comparatively safe capital investment. There is a real tangible value that you can touch and that under normal circumstances will not suddenly become completely worthless.
• As an investor, you can use various options with real estate to save on taxes or benefit from government subsidies.
• Depending on the property, you can achieve an attractive return with real estate: on one hand through steady rental income, and on the other through a higher selling price with a corresponding profit.
• By renting out a property, you can build up an additional source of income: "passive income".

Disadvantages and risks of real estate investments

• Buying and selling a property is very time-consuming and incurs additional costs (agent, notary, taxes).
• Real estate investments generally require a long-term investment horizon (>10 years).
• You must expect regular costs for maintenance (reserves), management and administration.
• Your tenants can cause problems, e.g. through missed rent payments or improper use of the living space (insufficient ventilation -> mold growth, damage to walls, windows, electrical systems, ...).
• When a tenant moves out, you have to find a replacement and possibly bridge a longer period of vacancy. During this time, rental payments are missing, but you still have to cover the ongoing costs of the property.
• If you want to finance a large portion of a property with external funding, you should pay very close attention to the fine print in the loan agreement. If the property loses significant value after a few years, for example because general property prices in the region have dropped sharply, the bank may demand additional collateral or terminate the loan agreement. Follow-up financing after the initial term (e.g. after 10 years) can also lead to unpleasant surprises.
• Some studies suggest that real estate could lose significant value in the coming years, particularly due to demographic change.

Sources and interesting links

1. YouTube video  Andreas Beck: This is why real estate could lose massive value! // Mission Money
   • "An exclusive study authored by him suggests that real estate could lose massive value in the coming years. The main reason for this is demographic change."
2. YouTube video - 90% of real estate investors don't know their returns! Gerd Kommer interview 3/4 | Finanzfluss
   • Breakdown of real estate investments:
     
     • 60% so-called small investors / private investors
     • 40% rented out by professional commercial companies
   • Owner-occupancy rate in Germany approx. 45%
   • Many private individuals don't actually know the real return on their real estate investment — it is often shockingly low.
   • Commercial companies have an enormous cost advantage over private investors, paying on average about 30% less for acquisition, construction, etc.
3. bergfuerst.com - Compared: Five forms of investment in real estate
4. anlegen-in-immobilien.de - Mathematician warns of imminent end of the real estate boom 
   • "Demographics are throwing a wrench into the real estate boom."
5. zinsland.de - Real estate as a capital investment: The advantages and disadvantages of this investment type

Are there any important tips about real estate investments missing here? What experiences have you had? Feel free to leave a comment.

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