Why student apartments are worthwhile

There is a housing shortage in almost all German university cities – and this is exactly where your investment comes in. Small apartments or shared apartments near the university(map with universities) are always in demand, and you can buy, upgrade and rent them out directly without a lot of start-up capital – stress-free via a property management company.

Constant tenant turnover is an advantage

Students are moving more frequently, starting a new semester or changing cities. For you as an investor, this means: no fear of vacancies, but constant demand – especially in central locations or close to the university.

Compact size = high efficiency

An apartment with 20 to 30 m² will cost you less to buy and less to maintain. At the same time, you can achieve more rent per square meter than with larger apartments by equipping it with a kitchen and possibly furnishing it.

Little effort, clear processes

Instead of taking care of rental contracts, utility bills and minor repairs yourself, you can commission a property management company – ideal for beginners or if you have a busy work schedule.

• High demand all year round
• Compact properties with strong returns
• Hand over administration completely

What you should consider when buying

When it comes to student apartments, location counts. If you buy centrally, you will get more rent and find new tenants more easily. It is also important that you have the incidental purchase costs under control – and know your net yield, not just the gross figure from the exposé.

Only proximity to the university brings real returns

The classic: a small apartment within walking distance of the university or with a direct subway connection. Without this, it will be difficult to reach the target group – especially for smaller units.

Keep purchase price low

The trick is to find a solid property below market value – e.g. in a basic condition that can easily be upgraded with a little paint, a new kitchen and furniture. This will increase the value without you having to dig deep into your pockets.

Buying cheap real estate? Here are my tips from Los Angeles: Buying real estate cheaply (acquisition)

Plan property management from the outset

The monthly costs for property management (usually €25-40) are manageable – in return, you get peace of mind, professionalism and legal protection. This is worth its weight in gold, especially if you have several tenants per year.

• Affordable shopping with potential
• Location = daily demand factor
• Property management saves time and nerves

More rent through simple fittings

Do you want more than the standard price? Then invest specifically in equipment – and target students who don’t want to organize their own furniture or kitchen.

Fitted kitchen as a rental booster

For €399, you can get a modern, small fitted kitchen with a fridge, hob and storage space. This will immediately set you apart – and you can easily charge €50 more rent. Many students specifically look for apartments with their own kitchen.

Fitted kitchen = 399 €

Surcharge per month = 37.50 (at 1.50 € / m² for 25 m²)

Amortized in 11 months

To do this, make a handwritten note in the rental agreement that your tenants are responsible for any damage or repairs to the fitted kitchen.

Furnished = more rent, less vacancy

A simple bed, desk and wardrobe – that’s all you need. You can include the furnishings in the rent; many tenants are happy to pay for this as they don’t have to buy or transport any furniture.

Paint once = better effect

A light coat of paint makes a big difference. Clean walls and a well-maintained floor look immediately more modern – even if the substance is simple. The effort is minimal, the effect is great.

• Kitchen: +50-100 € rent possible
• Furnished = reach target group directly
• Looks count – even for students

Micro-apartments as an alternative or extension

If you want to scale up the concept, take a look at micro-apartments – they work in a similar way to student apartments, but are often more modern and also appeal to young professionals or commuters. Advantage: often slightly higher rent, same basic logic.

More target groups, similar strategy

You can reach more tenant groups through better facilities, services (e.g. Wi-Fi, cleaning) or location in business districts. The principle remains: small space, high rent, low vacancy rate.

Investing through society

Especially if you are buying several units, it is worth taking a look at GmbH structures in order to work efficiently from a tax perspective. We will be happy to advise you on this – or you can learn more in our further videos.

• Scalable due to many locations
• Broader target group than students
• GmbH models for larger investments

10 % return is achievable – if you buy smart

Student apartments offer you a solid, calculable entry into the world of real estate. If you buy cheaply, modernize a little and adapt to the target group, you can achieve realistic net yields of 8 to 10 percent. Even better: you hand over the management directly – and have created your first real investment property with a small apartment. Now it’s up to you to take the next step.

Micro-apartment as a capital investment: advantages for you

Small apartment with 25 m² instead of a large 4-room apartment. Why? More and more people are living alone in single households. Students, singles, holidaymakers, but also professional groups such as fitters, who are often in different cities. Learn more about investing in small condominiums, so-called micro-apartments, here.

• Micro-apartment as a capital investment

Evaluate apartment building in under 5 minutes

Let’s start with a case that could happen to you today:

Imagine an acquaintance sitting next to you in a café and saying: “Someone here in the street wants to sell an apartment building, I knew the old lady, her son is now looking after it. I’ll ask about it for you.” A day later, you receive the figures on WhatsApp: 240,000 euros annual rent, purchase price is said to be 8.5 million, A-location. Sounds exciting – but is it really a good deal?

The important thing is that you only need two figures – the purchase price (PP) and the annual net cold rent (ANR). Once you have these, you can immediately calculate the purchase price factor and the yield. Both are the most important key figures for recognizing whether an investment makes sense or not.

Another tip: Whether you’re looking for a return on investment or a purchase price factor, use my free real estate calculator on Immobilien Guru.

Stream here for free – the fastest real estate valuation in the world

Calculate purchase price factor and yield

Example:

• Purchase price: € 8,500,000
• JNKM: € 240,000

Now you can get started right away:

Purchase price factor = purchase price / JNKM = 8,500,000 / 240,000 = 35.4

A purchase price factor of 35 means that it takes over 35 years to recoup the purchase price through rental income – without costs, without interest, without risk. Far too long.

How much return are you making?

You can also see this immediately:

Yield = JNKM / purchase price = 240,000 / 8,500,000 = 2.8 %

Sounds okay at first – but is it really?

The magic limit: 5.5% or more – applies at current interest rates of 3.5%

If you work with borrowed capital – and almost everyone does – you have to take the current interest rates into account. Let’s assume you get 3.5% interest. Then realistically add around 2% for maintenance and reserves. That makes a total of 5.5 %.

So you only earn from a return of over 5.5 %

With a return of only 2.8%, you are making a loss month after month – despite rental income.

How much should you pay at most?

Here’s the trick: simply reverse the formula. You want at least 6% return? Then:

Purchase price = JNKM / desired return Purchase price = 240,000 / 0.06 = € 4,000,000

At a yield of 6%, the property should cost a maximum of €4 million. With an 8 % yield, it could even be as low as € 3 million.

Example: You want 8 %

Purchase price = 240,000 / 0.08 = € 3,000,000

Anything above that is not financially attractive – or you have to negotiate the purchase price down.

That’s all you need to remember in the first step, with a quick assessment from your smartphone or notebook! Are you getting an offer? Ask for the address, purchase price, JNKM (renovation status, rental status, …) – then you can evaluate quickly and the seller can sell their apartment building quickly.

Conclusion: “Only 2 numbers decide” – to put it simply

All you really need:

• The annual net cold rent (JNKM)
• The purchase price

Then compare that with the current financing costs and the 2% maintenance buffer. From a return of 5.5 %, you are in the black – anything less is a risk or a hobby.

Formula for your everyday life

Desired yield / JNKM = maximum purchase price

Keep this formula in mind – you’ll need it more often when you’re checking real estate offers. It will tell you in seconds whether a property is suitable or not. And even better: you can immediately make the seller a realistic offer.

Is 8.5 million a good deal?

I went into this in detail on immobilien-erfahrung.de, you can read about it again here: The difference between yield and investment properties.

The difference lies in the focus: with an investment property, what counts is what comes into your account each month – i.e. a positive cash flow from rental income, usually in B locations and C locations. With an investment property, on the other hand, you focus on long-term value appreciation and sales proceeds – usually in A-locations such as Berlin, Cologne, Düsseldorf & Co.

You want direct cash? The first option brings you income directly. Do you want more cash in the long term? The second requires patience, capital and market knowledge – in return, you can expect a big profit later on.

Even better:

If you buy cheaply in an A-location, all the better Cash flow + long-term cash = top class. Buy, upgrade, increase rent, increase value.

That’s it. This is how you evaluate extremely quickly. Good luck with your investment!

Your purchase price offer therefore always depends on your personal goals: Do you need / want operational or strategic cash.

What would this property with a net annual rent of 240,000 euros in an A-location be worth to you?

More tips from the field?

Do you want to regularly recognize good deals, make faster decisions or simply learn from my experience? Then browse through the blog or read the most important articles on the topics – step by step, from practice, for investors.

I have explained these topics to you in detail:

• Valuate apartment building
• Calculate purchase price factor
• Tip: My purchase price factor calculator
• Estimate returns correctly
• Financing with leverage

You want to sell or have questions? Then write to me – I’ll be happy to help you.

• Contact us now
• Purchase profile

Examples: Compact video explanations

A picture is worth a thousand words! Here are a few examples:

Real estate acquisition: How to get cheap real estate offers

The real profit is in the buying, which is why real estate acquisition is such an important topic on your journey to becoming a real estate investor and real estate investor. On YouTube I give acquisition tips, from digital channels to cold calling property owners.

x

The first important thing for you when starting out as an investor is to acquire affordable real estate:

Make it known that you are buying real estate in region X! Family, relatives, friends, acquaintances and colleagues are all powerful multipliers for you.

As soon as someone hears something, you have tipsters.

Passive income: Earn money by renting

Passive income is a dream for many, and real estate offers the opportunity to make this dream come true. Imagine earning 5,000 euros a month alongside your job without having to actively work for it. How would that feel for you? Many people rely on real estate to achieve precisely this goal.

• Asset accumulation through rental income
• Additional income – passive income
• Peace of mind

x

5% return: what does that mean?

What does 5% return mean? In this video I explain why 5% is valued differently in different asset classes.

x

5% is not enough if you want to “make money with real estate” right away. Read here how much return you need: This is how high the return must be “at least” if you want to earn money directly in the first month of letting.

Real estate as inflation protection: value preservation

Buying a condominium can be a smart decision, especially for newcomers to real estate. When you buy an apartment, you become part of a condominium owners’ association (WEG), which means that many common costs are shared. Imagine that in an apartment building with five parties, you only pay 20% of the common expenses incurred. This means considerable savings for you.

• Long-term increase in the value of the property
• Increase in rental income over time
• Stable repayment rate

x

Apartment vs. house: the advantage of an apartment

Investors often opt for long-term financing over a period of 30 or 35 years. This creates liquidity for further investments. Instead of paying the entire purchase price yourself, you can take out a loan from the bank and usually only contribute 20% equity. This allows you to own several investment properties and benefit from the returns.

• Being part of a homeowners’ association
• Share costs – e.g., heating system

x

Long-term financing of investments

Investors often finance over a long period of 30 or 35 years. This creates liquidity for further investments. Instead of paying 100% of the purchase price yourself, you take out a loan from the bank and usually only contribute 20% equity. This allows you to own several investment properties and benefit from the returns.

• Creation of liquidity
• Inflation leads to rising assets, while amortization remains constant

x

Buying in A-location and B-location: the difference

In the real estate world, locations are often divided into A, B and C locations. On Instagram, I explain the basics and analyze the differences, advantages and disadvantages of these locations. Stay tuned to gain valuable knowledge about real estate investing.

x

Investor Stories: Learning from the greats

You’ll find lots of investor stories on my blog, and of course I’m now doing a few for LinkedIn too! Like here, the Hollywoodland.

x

Subscribe now on Instagram!

Don’t forget to subscribe to my channel to stay up to date and benefit from valuable real estate investing tips.

Examples: Explained succinctly in videos

Videos say more than a thousand words! Here are a few examples:

Passive income: Earn money with rent

Passive income is what many want and desire for their lives. Because it makes carefree. Suppose you know that in addition to your asset accumulation (property is paid off by tenants) earn 5,000 euros a month, without work: How would you feel? That’s why many rely on real estate as an investment.

• Wealth building, tenant pays your property
• Additional income, passive income
• Carefree

@lukinski_real_estates

Heute sprechen wir über den dritten Vorteil einer Kapitalanlage: das passive Einkommen. Passives Einkommen bedeutet, dass dein Geld für dich arbeitet, ohne dass du aktiv dazu beitragen musst. Mit Kapitalanlagen wie Aktien, Immobilien oder Dividendenfonds kannst du regelmäßige Einnahmen erzielen, ohne täglich zur Arbeit gehen zu müssen. Klingt gut, oder? In meinem Video werde ich euch zeigen, wie das funktioniert und warum es eine kluge finanzielle Entscheidung sein kann. Bleibt dran! #Kapitalanlage #PassivesEinkommen #Finanzen

♬ Originalton – Lukinski

Real estate acquisition: How to get cheap real estate offers

The real profit is in the buying, which is why real estate canvassing is such an important topic in your real estate investing journey. On YouTube, I share acquisition tips, from digital channels to ringing owners (cold calling).

@lukinski_real_estates

Let’s dive into the world of real estate investing . The key? Buying low for bigger profits! Start by discussing your real estate ventures with neighbors, friends, and family—they’re your best source of tips with minimal investor competition! #RealEstateInvesting #ProfitTips

♬ Originalton – Lukinski

The first thing that is important for you when starting out as a capital investor is the acquisition of inexpensive real estate:

Make it known that you are buying real estate in region X! Family, relatives, friends, acquaintances, colleagues, all these are strong multipliers for you.

As soon as someone hears something, you have tipsters.

@lukinski_real_estates

Here’s Real Estate Tip 3 for all you savvy property hunters out there! If you’re looking to snag some budget-friendly real estate deals and maximize your profits, here’s the secret sauce: Get in touch with property owners directly. By cutting out the middleman, you’ll face less competition in the market, or dare we say, no competition at all! This gives you a unique advantage in negotiations and a better chance to strike a fantastic deal. So, remember, it’s not just about finding the right property; it’s about connecting with the right people to make it happen. Happy real estate hunting! #RealEstateTips #InvestmentInsights

♬ Originalton – Lukinski

Real estate as inflation protection: value enhancement

Your money becomes less valuable with each year of inflation. What protects you from this? Real estate! Its value increases with inflation, as does your rental income. At the same time, another benefit, your amortization rate stays the same. Great! That’s how you learn on TikTok Real Estate Investment.

• Value of the property increases in the long term
• Rental income increases in the long term
• Repayment rate remains “the same

@lukinski_real_estates

Why invest in real estate? 1⃣ Inflation Protection: Historically, real estate has proven to be an excellent hedge against inflation. Your wealth remains stable as prices rise.

♬ Originalton – Lukinski

Apartment vs House: The Ultimate Advantage of an Apartment

A condominium is often the best solution for beginners, because you are part of a homeowners’ association (WEG). This ensures that many costs are shared. Let’s say there are 5 parties in the apartment building, then you only pay 20% of the costs incurred in the common property. Instead of 12,000 euros, for example, only 2,400 euros (-9,600 euros less).

• With apartment you are part of a WEG
• Cost sharing in common property, example: Heating system

@lukinski_real_estates

Apartment House as your first capital investment? Advantage of owning an apartment: Cost-sharing within a homeowners’ association. Is it better to invest in an apartment or in your own house first? The key difference and advantage of owning an apartment is that you become part of a homeowners’ association, sharing many costs. For instance, if you had to repair the heating system in a house on your own, it could cost you $ 10,000. However, in an eight-unit apartment building, you’d only split the cost, paying just $ 1,250! #RealEstateInvestments #ApartmentVsHouse

♬ Originalton – Lukinski

Investor Stories: Excitement + Learning

You’ll find lots of investor stories on my blog, a few I’m doing for LinkedIn now of course! Like here, the Venice Canals.

@lukinski_real_estates

Join me on an enchanting journey through the Venice Canals in Los Angeles! I’ll be releasing a brand new video soon, showcasing the stunning canals of Venice and unraveling the captivating investor story behind them. Who would have thought these canals held so much history and charm? Stay tuned for more! #VeniceCanals #LosAngeles #InvestorStory #HiddenGems

♬ Originalton – Lukinski

Outtakes. Like here from Charly’s pool in Malibu

@lukinski_real_estates

Working in Malibu today just a little impression of the area and it’s the crew area because Charlie Sheen is living here!

♬ Originalton – Lukinski

Subscribe now on TikTok!

Don’t forget to subscribe to my channel to stay up to date and benefit from valuable real estate investing tips.

• Lukinski x TikTok

Examples: Detailed video explanations

A picture is worth a thousand words! Here are some examples:

Real estate acquisition: How to get cheap real estate offers

The real profit is in the buying, which is why real estate canvassing is such an important topic in your real estate investing journey. On YouTube, I share acquisition tips, from digital channels to ringing owners (cold calling).

First of all, it’s important to make it known that you are buying real estate in region X! Family, relatives, friends, acquaintances, colleagues, all these are strong multipliers for you. As soon as someone hears something, you have a tipster.

Now on YouTube!

Passive income: Wealth accumulation through rental income

Passive income is a goal that many people strive for, and real estate offers a proven method to achieve this goal. Imagine earning 5,000 euros a month alongside your job without having to actively work. What freedoms would you enjoy with that extra income? Many investors rely on real estate to achieve precisely this financial independence. One advantage of real estate as an investment.

• Your wealth grows thanks to rental income
• Additional income – passive income
• Sense of financial security

Real estate as inflation protection: value preservation

While your money loses value over time due to inflation, real estate increases in value, as does rental income. What’s special about this is that your monthly repayment remains stable. This is a key advantage that you can learn about in detail on TikTok’s real estate investing section.

• Your property becomes more valuable in the long term
• Increasing rental income over time
• Stable repayment rate – your financial basis

Apartment vs. house: The advantage of an apartment

Buying a condominium can be a smart choice, especially for first-time real estate buyers. By buying an apartment, you become part of a condominium owners’ association (WEG), which means that many costs are borne jointly. Let’s say in an apartment building with five parties, you only pay 20% of the common expenses incurred. This leads to considerable financial savings.

• Be part of a homeowners association
• Share costs – e.g., heating system

Tips in a few seconds, follow me on YouTube!

Long-term financing of capital investments

Investors often choose long-term financing over 30 or 35 years. This creates liquidity for further investments. Instead of paying the entire purchase price yourself, you can take out a loan from the bank and usually only contribute 20% equity. This gives you the opportunity to own several investment properties and profit from the returns.

• Creation of liquidity for future investments
• Inflation ensures rising assets while redemption remains constant

Buying in A-location and B-location: The difference

In the real estate industry, locations are often divided into A, B and C locations. On TikTok, I explain the basics and analyze the differences, advantages and disadvantages of these locations. Stay tuned to gain valuable knowledge about real estate investing and pave your way to financial freedom.

Investor Stories: Learning from professionals

You’ll find lots of investor stories on my blog, a few I’m doing for LinkedIn now of course! Like here, the Hollywoodland.

Work Life Balance: From the road

Little insights from my favorite places, cafes!

At Charly Sheen’s Pool

If you’ve made it this far, I can show you this too, from Malibu!

Subscribe to YouTube now!

Don’t forget to subscribe to my channel to stay up to date and benefit from valuable real estate investing tips.

Don’t miss a pool! Follow me on YouTube now!