Mistakes when buying real estate – We have identified for you the biggest mistakes when buying real estate. After all, mistakes cost time and money and cause unnecessary extra effort. Do you want to invest in a house as your first property? Or buy a house in C-location, because it reminds you the facade of the house of your childhood? Find out in our checklist which mistakes to avoid at all costs including tips from our real estate experts!
Mistakes when buying real estate: You should avoid them at all costs!
Emotional real estate purchase, a too special property in a bad location and the purchase of a house for personal use – the list of possible mistakes is long. Learn here what you should avoid at all costs!
Error: Poor location of the property
One of the most consequential mistakes is buying a property in a bad location. Demand is low, renting is difficult and the risk of vacancy is high. Large cities in sought-after B locations are best suited. Even a little outside the major cities, in the Speckgürtel, real estate investment is worthwhile. Here are the best locations at a glance:
Buying in major cities (not metropolitan areas in top A locations)
Metropolitan areas, the famous Speckgürtel, with good B-location
Cities in demand with B location
Error: Your real estate is too specific
The more special your property is, the more difficult it is to sell or rent it later. A chic loft with a view of the skyline or a designer villa on the edge of the forest sound tempting, but are nowhere near as sought after as an average 1-3 room apartment on the edge of town. Our tip: So before you start looking for real estate, get to grips with the different types of houses and apartments and their demand and don’t invest in a property that is too fancy.
While each property on the market has its own individual charm, it may not be as easy to resell later:
Mistake: Buying property for personal use
One of the most basic mistakes beginners make is buying a property for their own use. After all, it is not tenants and the tax office who will then pay off the property, but you yourself. This makes owner-occupancy the most expensive form of housing. That’s why we recommend investing in a property as a capital investment first and only then in owner-occupation.
Similarly, as with owner-occupancy, you are left with 100% of the costs when you buy a house. So for your first property, do not invest in a house, but in an apartment. As a homeowner, you must always bear all costs alone. However, if you are an apartment owner, these costs are divided among the parties.
Mistake: Emotional real estate purchase
You have dealt with the topic of real estate investment, the different location types and property types and clarified the question of investment or yield property, and suddenly you stumble upon an apartment that reminds you of your childhood? The important thing here is: Never buy a property based on your emotions. Stay true to your strategy and goals and think rationally about the purchase.
Mistake: Resale value not in view
When purchasing your property, also think about the resale value. After all, you should not make a big minus after a later resale. Here, above all, the location again plays an important role.
Here is the comparison of the 3 types of location and their increase in value:
A-location: Annual increase in value of 4-6%.
B-location: Annual value increase of 1-2%.
C-location: no increase in value (possibly small decrease in value)
Error: Buy due to the top equipment
If you buy a property because of its features, you may even end up flipping it unnecessarily when you buy it. Instead, you should apply the strategy of ‘buy and flip’. So you buy a property cheaply, renovate and refurbish it and thus make a profit again when you resell it. After all, you cannot increase the square meters of your property, but you can always improve the facilities.
If you want to learn even more on the subject of buying a property, whether owner-occupied or capital investment, numerous articles, guides on the subject of rented vs unrented, as well as checklists, all free and 24 hours online available, with us!
Apartment, house, apartment building, everything for real estate beginners!
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