First Investment: Quick Check for Beginners

Not every real estate is automatically a good investment – quite the opposite. About 70 % of beginners buy the wrong real estate because they focus on the purchase price instead of the key figures. The decisive size for success or failure is the rental yield in combination with the cash flow. How high your yield really is, shows our article Calculate Rental Yield. More about Yield Value Method and when it is applied.

Before you start with the numbers, you must understand the basics: market situation, interest rates, equity, location strategy and taxes. This article guides you step by step through each point – with concrete calculation examples.

• Understand the market situation and use negotiation leeway
• Use equity realistically (rule of thumb: purchase ancillary costs plus reserve)
• Calculate rental yield and cash flow before you sign
• Plan tax levers such as depreciation and advertising costs

Video: No desire to read?

Watch my video with all the thoughts, example calculations and tips:

Another tip: Use my free real estate calculators on ImmobilienGuru.One – there you can directly calculate rental yield, cash flow and follow-up financing.

Current Market Situation: Use Uncertainty as an Opportunity

Why buyer hesitation is your chance

Germany is in an economic turning point. Several years of weak conjuncture have changed the real estate market. Many buyers are cautious and waiting – a classic mistake, because exactly that opens up room for active investors. While the majority hesitates, you can specifically search for real estate that is sold below market value, for example by inheritance communities, during divorces or through bank special repayments.

Rental demand remains a structural driver

At the same time, rental demand remains high. The population in urban areas continues to grow, the number of households increases due to the single trend and immigration, while housing construction has been below demand for years. The result: well-located apartments are almost immediately rented even in times of crisis.

• Less buying competition means a better negotiation position – realistically 5 to 15 % below the asking price possible
• Rents continue to rise because the housing supply is structurally limited
• Especially A- and B-locations offer stable value development and long-term security
• Sellers under pressure (inheritance, divorce, bank) are significantly more willing to negotiate in this phase

Interest Rates: No Fear of Financing Costs

Historical Context of Interest Rate Levels

Construction interest rates have stabilized after a long high phase and are currently moving in the range of about 3 to 3.8 % with 10 years interest binding. Many investors perceive this as high because they are used to the low interest years with 1 to 2 %. A look at the history quickly relativizes this:

• 1970s: mortgage interest rates 8 to 10 %
• 1980s: temporarily over 9%
• 90er Jahre: rund 7 bis 8 %
• 2000er: 4 bis 6 %
• 2015 to 2021: historical exception phase with 1 to 2%

Das aktuelle Niveau ist also der historische Normalfall, nicht die Ausnahme. Vermögensaufbau mit Immobilien hat in jeder dieser Phasen funktioniert.

Kluge Strategie statt Zinsangst

Wichtiger als der absolute Zinssatz ist eine Finanzierung, die zu deiner Strategie passt. Kalkuliere konservativ und stelle sicher, dass du auch bei einer Anschlussfinanzierung mit höherem Zinsniveau noch positiven Cashflow erzielst. Wie du positiven Cashflow rechnest: Cashflow Immobilie.

Wer heute finanziert, kann bei sinkendem Zinsniveau über Forward-Darlehen oder Umschuldung profitieren – Stichwort Vorfälligkeitsentschädigung richtig kalkulieren.

• 3% interest rates are moderate in historical comparison, no investment obstacle
• Additional prepayment rights (5 to 10% p.a.) in the contract ensure flexibility
• Lange Zinsbindung (15 oder 20 Jahre) bei aktueller Lage strategisch sinnvoll
• Forward loans allow interest rate protection for the subsequent financing

Equity: How much do you really need?

Rules of thumb for your first property

One of the most common beginner questions: How much equity is needed? Banks distinguish between loan-to-value (security for the bank) and purchase price. The most important scenarios:

• 110% financing: The bank finances the purchase price plus ancillary costs – only realistic with very good income, flawless Schufa and top location
• 100% financing: The purchase price is fully financed, ancillary costs from equity – frequently the standard for investors with good income
• 90% financing: 10% equity plus ancillary costs – cheapest interest rates, best negotiation position
• 80% financing: 20% equity plus ancillary costs – top conditions, but high capital requirement

Realistic example: Equity requirement

Purchase price 300,000 €, federal state NRW (6.5% GrESt), notary/land register 1.5%, real estate agent 3.57%:

• Land transfer tax: 19,500 €
• Notary and land register: 4,500 €
• Real estate agent commission: 10,710 €
• Total ancillary costs: about 34,700 € (11.6%)
• Plus liquidity reserve: at least 10,000 € for maintenance and rental default

Rule of thumb: For your first property, you should be able to provide at least the purchase ancillary costs plus a reserve from equity – realistically about 45,000 € for a 300,000 € property.

Strategy for beginners: Which properties are worth it?

Rent yield property versus appreciation property

The most important strategic decision before purchase: Do you want cash flow today or appreciation tomorrow? Both at the same time are almost never possible.

• Appreciation properties (A-locations Munich, Hamburg, Berlin, Frankfurt): Gross yield 2.5 to 3.5%, but high appreciation over 10 to 20 years. Cash flow is often negative, tax benefits compensate for this.
• Rent yield properties (B/C-locations, commuter belt, medium-sized cities): Gross yield 5 to 7%, immediately positive cash flow, lower appreciation, higher risk of rental default.

Location strategies compared

Purchase ancillary costs by federal state

The land transfer tax varies greatly between federal states. For a property worth 400,000 €, this quickly adds up to four-figure differences:

In addition, there are about 1.5 to 2% for notary and land register as well as possibly the real estate agent’s commission (usually split evenly between buyer and seller).

The most important criterion: Rent yield and cash flow

Correctly calculating net rent yield

No matter which strategy – the rent yield shows you whether your property is profitable. Calculate the net rent yield like this:

Net rent yield (%) = (Annual cold rent – non-recoverable costs) ÷ (Purchase price + purchase ancillary costs) × 100

Realistic example B-location commuter belt: Apartment 250,000 €, cold rent 950 €/month, non-recoverable management costs 1,800 €/year, ancillary costs 11% (27,500 €):

• Annual cold rent: 11,400 €
• Minus non-recoverable costs: –1,800 €
• Net cold rent: 9,600 €
• Total investment: 277,500 €
• Net rent yield: 3.46%

Cash flow calculation with financing

The rent yield alone is not enough – what remains after interest and repayment is decisive. Example above with 90% financing (225,000 €) at 3.5% interest, 2% repayment:

• Rent income cold rent: 950 €/month
• Annuity (interest + repayment): –1,031 €/month
• Non-recoverable costs: –150 €/month
• Cash flow before tax: –231 €/month
• Depreciation benefits and business expenses reduce tax burden – after tax often near zero or slightly positive

Realistic rules of thumb for net rental yield depending on location:

• A-location in a metropolis: 2.5 to 3.5 % – appreciation supports the case
• B-location / commuter belt: 3.5 to 5 % – mixed strategy, often the sweet spot for beginners
• C-location / mini-apartment: 5 to 7 % – cashflow-driven, higher operational risk

The “minimum yield of 8%” circulating on the internet only apply to risky C-locations or commercial properties – not for solid residential properties in German metropolitan areas.

Tax Leverage: The invisible yield booster

What many beginners underestimate: taxes can improve the effective yield by 1 to 2 percentage points. The most important levers:

• Linear depreciation: 2 % per year on building value (existing buildings), 3 % for new buildings from 2023 – reduces taxable income
• Advertising expenses: interest, management, repairs, travel costs, tax advisors – fully deductible
• Maintenance costs: repairs can be immediately deducted, modernization through depreciation
• Speculation period of 10 years: after 10 years of holding period, the capital gain from the sale is tax-free
• Special depreciation for monuments: up to 9 % per year for 8 years on renovation costs

Rule of thumb: with a top tax rate of 42 % and 6,000 € depreciation per year, you save about 2,520 € in taxes annually – this directly improves your cash flow.

Top-5-Mistakes for first-time investors

• Trash property due to supposedly high yield: 8 % gross yield in a C-location sounds good – until the first tenant dispute lawsuit and 6 months of vacancy
]]> https://lukinski.com/crowdinvestment-real-estate-experience-advantages-disadvantages-in-comparison-tips/ Wed, 29 Dec 2021 18:08:18 +0000 https://lukinski.de/crowdinvestment-real-estate-experience-advantages-disadvantages-in-comparison-tips/ Crowdinvestment Real Estate – Not everyone has the necessary equity or cash flow (regular income) to buy their own house or condominium. Crowdinvesting has many advantages. For example, little equity, various properties as an investment opportunity, risk minimization through capital diversification and extensive participation (fixed interest rate, profit-related distribution and participation upon sale). Real estate is also extremely useful as a retirement investment because it is not subject to inflation (depreciation of money). One of the best investment alternatives is therefore crowdinvesting with providers from 500 euros, simply put: real estate investment for everyone.

Crowdinvesting: explanation, advantages and disadvantages

Too little equity, too little time, no problem! Crowdinvesting in real estate allows you to invest with smallest amounts. My recommendation for small investments starting at 500 euros are providers like Exporo and InRento.

Let’s start with basics:

What is crowdinvesting?

First of all, what is crowdinvesting?

A very simple comparison would be “a corporation“. The company sells various shares to individuals and institutions. Thus, many “participate” in a company and give it the necessary financing for growth. It works the same way with crowdinvesting in real estate.

Instead of one large investor, shares are spread to many “small” investors. This allows people to invest in real estate who either do not have the necessary credit rating, not enough equity or both. There are several providers for this, such as Bergfürst, Engel & Völkers, Exporo or also InRento, which you will also find in a list later.

More and more want to participate in the real estate market. Also Haufe reports this month“The swarm flies on real estate“, let’s look at the advantages and disadvantages.

Advantages of real estate crowdinvesting

As already learned in the introduction, you as an investor have some advantages, such as the low equity, the various properties as investment options, risk minimization through capital diversification, but also an extensive participation (fixed interest rate, profit-related distribution and participation upon sale).

• Little equity – start from 50 – 100 Euro
• Once registered, various investment options
• Transparency – contact with construction companies possible (information)
• Risk minimization – capital spread over several projects

Compensation and Disbursements:

• Fixed interest rate
• Profit-related distribution
• Participation in the exit case (sale of the property)

Disadvantages and risks for investors

As always, there are advantages, but also disadvantages that you should consider. Here also a more detailed article in Capital“Risky game“. After that you will know all the disadvantages and risks in detail.

• No right of co-determination (participatory loan)
• Capital commitment over a long period 5+ years
• Total loss when projects fail
• Too much participation – loss of overview

How does crowdinvesting in real estate work?

In the vast majority of cases, a property is to be developed (renovated or completely rebuilt).

With regular real estate investment, one would now specifically look for a partner for financing. With crowdinvestment, however, owners talk to the crowdinvestment platforms, which in turn take care of the distribution of the shares. Online platforms then broker real estate shares to investors.

This crowdinvestment platform then takes over the entire presentation to the individual investors and the owners can take care of their core business, construction and development. So with crowdinvesting, you don’t give a “typical” loan to the respective developer, you participate in the property with a participatory loan. This also means you have no say in the matter.

Participation in the real estate does not mean, of course, that you can move in tomorrow and take 0.5 square meters. The real estate will be managed afterwards, you are only a capital investor. From this you achieve a return in the form of the fixed interest rate and the profit-dependent distribution.

Once again the remuneration and payment:

• Fixed interest rate
• Profit-related distribution
• Participation in the exit case (sale of the property)

So a few euros become more and more.



Crowdinvestment provider

Which crowdfunding platform is the best? Where can you invest? There are various, reputable providers for crowdinvesting. Here is a small market overview. The minimum investments differ, depending on the projects on the platforms.

As a rule, the minimum deposits are between 100 and 1,000 euros.

List of providers:

• Bergfürst
• Crowdinvest real estate
• Scroogeinvest
• Engel & Völkers Digital Invest
• Exporo
• Immofunding
• InRento
• Linus
• Rendity
• Savings Bank
• Interest module

What makes real estate so attractive as an investment?

Does real estate investment make sense?

There is a second advantage from crowdinvesting, for you personally!

With every new real estate listing and offer, you get to know the real estate market and learn to evaluate properties accordingly. Be sure to read my article on calculating rental yields here, as this will allow you to calculate the attractiveness of real estate investments in advance.

Real estate is extremely interesting as a capital investment, due to many aspects. A very important reason for real estate as a capital investment, especially with regard to one’s own retirement provision, real estate is not subject to inflation. The material value of a property protects it from the devaluation of money. Looking at the inflation table and the development in the next 25 – 30 years shows that real estate has many advantages, especially compared to financial investments such as savings accounts or Riester pensions for retirement.

Inflation and demonetization: effects

Example: In 30 years, inflation will have risen to the point where the purchasing power of 1,000 euros will be minimized to only 600 euros. In other words, if you spend 1,000 euros in 30 years, you will only receive goods worth 600 euros today. So (circa) 40% less, after inflation.

• 1,000 euros in the savings book in 30 years = 600 euros real value

Now we come directly back to the advantage of a property as an investment. This is rented out. Accordingly, the tenant pays an equivalent value (rent) for the monthly use of the tangible asset (real estate). If money is worth 40% less, your tenant has to pay 40% more rent. Accordingly, the rental income increases from 1,000 euros to 1,400 euros. So (circa) 40% more, after inflation, respectively no real value loss.

• 1.000 Euro rent in 30 years = No loss (1.400 Euro)

So if you had invested your money in a financial product, let’s take the classic savings book, you would have had a real loss of 40%.

When you invest your money in real estate, you are protected from the effects of inflation. Even better, you additionally benefit from the increase in value of the property. Germany is a booming real estate market, not only in recent years, also when looking at the last decades.

The population is growing, housing is scarce.

This way you additionally profit from the rent increases.

No fluctuation like shares & Co.

Real estate also has the advantage that it is hardly subject to fluctuations. If you actively trade currency, invest in stocks or buy cryptocurrency, for example, you will experience constant fluctuations in prices. Depending on the type of investment, currency, stock or crypto, more or less. Leases are long-term, rent is transferred monthly and the amount remains the same, tends to even increase due to rent adjustment.

• Real estate is stable in value
• Real estate offers inflation protection
• Real estate values do not fluctuate (like stocks, cryptocurrencies, and other financial products)

Major construction site in Stuttgart, profit, thanks to crowdinvesting.



Equity: Entry into real estate investment

The biggest sticking point for most is equity.

Especially when it is no longer about condominiums worth 100,000 euros (15,000 euros equity), but about investments in large cities with apartment prices of 400,000 euros, 500,000 euros and more. For a property with a purchase price of 500,000 euros (including ancillary costs), you would have to have 75,000 euros of equity ready.

Equity share in the purchase of real estate: security of the bank

First, let’s ask the question:

How much equity do you need for a regular property?

The answer differs, especially according to the real estate location. A condominium in Munich, unaffordable for most, even in the wider Speckgürtel around Nuremberg, Freiburg.

It is no different in the other major cities, Berlin, Hamburg, Düsseldorf or Frankfurt. So the purchase price of a property varies extremely, between 50,000 euros (in C-location) and 400,000 (in B-location). Of course, more if we talk about very good micro-location within the A-locations. e.g. Munich-Mitte, Berlin-Mitte, Hamburg-Mitte, Düsseldorf-Mitte and so on.

Calculate equity ratio: Here’s how

Whether 50,000 euros or 100,000 euros, the bank requires for the financing of a property, usually 15% equity. Especially if it is your first property.

In addition to the purchase price of the property, there are also the ancillary purchase costs. Depending on the federal state, including land transfer tax, notary costs and land registry entry, the total is approximately 7% to 10% extra.

Service charges idR. 7% – 10% yes according to federal state + broker (if involved)

The fluctuation comes on the one hand from the land transfer tax, which differs in each state. On the other hand, the question, was a broker commissioned? Here, too, the brokerage costs differ depending on the federal state. In the case of a private purchase, the buyer and seller must each share 50% of the brokerage costs. Ultimately, this results in the total purchase price of the property, including ancillary purchase costs.

This is how you calculate the equity ratio:

• Financing request: 100.000 Euro
  (purchase price plus ancillary costs)
• Equity: 15.000 Euro
• Loan from the bank: 85,000 euros

Purchase price calculation with additional costs:

• Purchase price: 100.000 Euro
• Real estate transfer tax example NRW (6.5%): 6,500 euros
• Notary fees (1.5%): 1,500 euros
• Land register entry (0.5%): 500 euros
• Brokerage commission (3.57% [3,570 / 2]): 1,785 euros

Credit rating for financing: crowdinvesting as an alternative

Not everyone has the necessary credit rating for such a large financing. Even if the equity would be available. e.g. because regular income counts (self-employed). Even more, however, do not even have the necessary equity available. For those who do not want to wait, there is a great alternative, even to invest in real estate as an investment.

Many reasons that speak for real estate as an investment and if the equity is not yet enough, for crowdinvesting in real estate.

Residential neighborhood with many condominiums (new construction):



Find profitable real estate

Crowdinvestment does not take away from you the decision in which property you invest. Therefore, here again the question opened:

How to find profitable real estate?

You still have to decide for yourself in which property you want to invest your money. Perhaps you already know my detailed guide on the subject of buying your first property? Here you will learn about the different types of real estate, the difference between yield real estate and investment real estate but also (very important) the real estate yield.

The real estate yield is a simple calculation once you know and understand it. It looks at the investment amount (purchase price and incidental purchase costs) and the monthly income (rental income). The result is a percentage.

If this is above 6%, all costs are usually covered by the repayment of the financing, interest and reserves for maintenance. Any return above 6% means additional wealth accumulation for you. Accordingly, the real estate yield is an extremely important factor for real estate investors. Because with this single key figure, you can evaluate the attractiveness of a real estate investment, but also compare different investment properties with each other.

Let’s first look at the simple formula of rental yield:

Annual net income / investment * 100 = rental yield

The rental yield is subdivided once again into the net rental yield and gross rental yield. Where is the difference?

• Net rental return = incl. incidental purchase costs
• Gross rental yield = excl. incidental purchase costs

With this knowledge, you can act much better as an investor and thus find really profitable properties for your investment.

Once you have registered in a crowdinvestment platforms, browse through the individual investment properties and compare them based on the return. Of course, you won’t get 100% of the rental payments, but you will see the yield on all platforms. Now you know what it’s all about!

Earn rental income today with investments starting at 500 euros. My recommendation:

• InRento



]]> https://lukinski.com/commercial-audit-rental-agreements-operating-costs-maintenance-valuing-a-house-apartment/ Mon, 01 Nov 2021 02:29:09 +0000 https://lukinski.de/commercial-audit-rental-agreements-operating-costs-maintenance-valuing-a-house-apartment/ Commercial examination before the real estate purchase – Before you invest into a real estate, it applies to examine these commercially, in order to calculate then a realistic purchase price. The most important factors here are operating costs, maintenance costs and rental agreements and arrears. Find out here which criteria are important for a commercial appraisal.

Commercial test: Calculate purchase price

So, if you have found a property that you like, you should check it in advance. For this, you proceed in two steps:

1. Commercial examination
2. Technical test

To calculate the purchase price, you should write down all negative points in advance. You will need these not only for the purchase price calculation, but also for the later purchase price negotiations with the seller. These are the important, general points that come up in every commercial examination of a property.

Rental agreement, rent arrears and reduction

If you are purchasing an unrented property for your own use, these points are less important to you. However, if your property is still rented or if you want to purchase it as an investment, you should make a note not only of the deposit, but also of any special features and individual agreements in the rental contracts.

• Can all ongoing operating costs be apportioned to the tenants?
• Is there a deposit that has been agreed upon?
• What special features were agreed in the lease agreements?

Rent reductions and increases are also important for the commercial audit and should be noted for this purpose.



Non-apportionable operating costs: checklist

Some operating costs can be passed on to your tenants, but some cannot. In particular, costs for property management and maintenance, as well as depreciation, must always be borne by the landlord.

Are there any non-apportionable costs?

Here are a few examples:

• Costs for property management
• Maintenance costs
• Costs for repair
• Depreciation
• Reserves

In particular, renovation and refurbishment measures that serve to maintain the property cannot be passed on to the tenant.



Maintenance: Housing arrears & upcoming refurbishments

Maintenance is also an important criterion in the commercial audit. For this purpose, we recommend that you check the maintenance reserve on the basis of the last utility bill by asking for the last utility bill. Calculate a typical average of 1 euro +/- 20 cents per square meter. You will find upcoming renovation and modernization measures in the collection of resolutions.

So this is something you should definitely pay attention to:

• Amount of the maintenance reserve
• Amount of existing house money arrears
• Examination of the collection of resolutions

Checklist: Commercial audit

Here, once again summarized, the – typical – 11 test points in short form:

1. Can you pass on all current operating costs to your tenant(s)?
2. Has a deposit been agreed?
3. Are there any special features in the lease agreements?
4. Are there currently any outstanding rent arrears?
5. Are there any active rent abatements?
6. When were the last rent increases implemented?
7. How much rent could be achieved on new leases?
8. Do you expect to incur non-apportionable costs?
9. How much is the maintenance reserve of the WEG?
10. Are there any house money arrears of the WEG?
11. Have you reviewed the collection of resolutions?



Tip. Buying real estate: Learning from A-Z

Everything from A-Z: owner-occupancy or renting, financing a condominium, apartment search, real estate portals, brokers, valuation, purchase prices, negotiations and taxes. Knowledge and experience from experts, in one guide.

✓ A guidebook
✓ All facts
✓ Insider tips
✓ Purchase checklists

Learn step-by-step the home buying process and lots of insider tips!

• Buy apartment
]]> https://lukinski.com/rental-yield-explained-build-wealth-definition-formula-for-your-yield-real-estate/ Mon, 11 Oct 2021 11:53:29 +0000 https://lukinski.de/rental-yield-explained-build-wealth-definition-formula-for-your-yield-real-estate/ Rental yield explained – You would like to invest in a property as a capital investment and are not yet sure whether such an investment is worthwhile? You would like to buy a yield property and thus build up further assets? Therefore, it is important to always have the gross rental yield in mind when buying real estate. So when is a property profitable and when is it not? How is the gross rental yield calculated? And which location is the most lucrative? You can find out all this and more here.

Rental yield: definition & calculation

Should you decide on a yield property for your real estate investment, the question quickly arises:

Is this property worthwhile as an investment?

After all, buying real estate does not only entail immense costs at the beginning. There are also ongoing operating costs to be paid later on during the rental period. So to make sure that this expense is worthwhile, there is the rental yield. In other words, the rental yield puts your investment in relation to the potential rental income.

Formula for gross rental yield: percentage

To calculate the rental yield, the cold rent (without operating costs) and the purchase price of the property must be put into relation. The complete formula is:

Annual net income / investment * 100 = rental yield

The result is then in percent. The higher the percentage, the better the return. And the better the return, the more you earn from the property. As a real estate investor, you should ideally build up wealth again directly so that you can then invest it in further real estate as a capital investment.



Yield & location: A, B & C location

The decisive factor for the rental yield is the location of your property. Is the property in an A, B or C location? What about the macro and micro location? And is it a yield or investment property? Depending on the location, the respective property types have different rental yields.

A-location: Frankfurt & Munich

Typical for A-locations are low yields and a steady increase in value. Over the long term, therefore, rental yields rise here just as the value of the property itself does. The best examples of this are top A locations such as Munich and Frankfurt:

• Munich Ø Yield ~ 3
• Frankfurt Ø Yield ~ 4

B-location: Dresden & Nuremberg

In principle, B locations also have good returns. In addition, there has also been a significant increase in value here. The ideal rental yield in B locations is between 5 and 6 percent:

• Dresden Ø Yield ~ 5
• Nuremberg Ø Yield ~ 6

C-location: Wuppertal, Chemnitz, Krefeld

Gross rental yields are highest in C locations. On the other hand, there is no increase in value and the risk of vacancy is higher. Here are some examples:

• Wuppertal Ø Yield ~ 7
• Chemnitz Ø Yield ~ 8
• Krefeld Ø Yield ~10



Conclusion: What is the minimum rental yield?

The amount of the rental yield is therefore calculated according to a fixed formula and varies depending on the location and type of property. In principle, the higher the yield, the more profit is made. And the better the location, the lower the yield. Thus, yield properties are worthwhile above all in B and C locations, while you should choose properties in A locations above all for investment properties.

Learn more about rental yield here:

• Rental yield: Return on real estate (external)

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!

Now new on Immobilien-Erfahrung.de:

• Buy property: learn – external



]]> https://lukinski.com/apartment-buy-goals-criteria-factors-checklist/ Mon, 04 Oct 2021 07:13:04 +0000 https://lukinski.de/buying-an-apartment-goals-criteria-factors-11-point-checklist/ Buy an apartment: What you should pay attention to! – With our 11-point checklist, you are perfectly prepared for your real estate search. Find out here what considerations you should definitely make before starting your apartment search. Always in focus: The big difference between own use and investment. After all, this has a huge impact on the remaining goals and factors. What is the difference between A-, B- and C-location? How does this affect the maximum purchase price and the minimum gross rental return and what are the respective advantages between existing and new construction? How you can calculate the real estate return and which formula helps you, we explain in detail. How the income value method works, we explain in detail with an example calculation. We help you determine your search criteria!

New! Specifically for Real Estate Buyers

Immobilie kaufen von A-Z: Vorbereitung, Suchkriterien, Kaufprozess und das alles, kostenlos und online, von Experten.

Jetzt auf Immobilien-Erfahrung.de

Buy an apartment, buy a house, own use or investment, return or investment property? On my new project Immobilien-Erfahrung.de you will now find everything you need to know for a successful real estate purchase! Learn everything about objectives in real estate purchasing, location types (A-, B- and C-locations), types of real estate, their returns and more! All online and free! What you must definitely pay attention to before your apartment search. Now on Immobilien-Erfahrung.de:

• Criteria for Buying an Apartment

Checklist: Criteria for Your Real Estate Investment

With our 11-point checklist, you are well prepared for your real estate purchase:

Real Estate as an Investment vs. Personal Use

At the beginning, the question is clear: Do you want to live in your property yourself? Or do you want to rent out your apartment as a rental property after the purchase? You should think about this at the beginning. After all, this affects not only the financing. As an owner-occupier, you are still responsible for the operating costs after acquiring the property. However, if it is a Real Estate as an Investment, these costs are mainly covered by the tenant and the tax office.

• Own use or investment? Comparison



Price of purchase: Factors

Equally important is that you set a maximum purchase price for yourself. Here you should take several factors into account. These include your creditworthiness, available equity, as well as your loan-to-value ratio.

Find out more about the important factors including tips and tricks here:

• Maximum purchase price

Maximum Gross Rental Yield: Formula

How high must the rental yield be at a minimum for the investment to be profitable and paid off by the tenant? For this, we recommend the following formula:

Formula: Annual rent / purchase price * 100

Investors pursue a primary goal, efficient wealth building. Accordingly, the gross rental yield of a yield property must be high. Learn more here:

• Minimum Gross Rental Yield

Rent out or buy vacant?

Of course, you can buy an already rented property just as easily as an unrented one. However, if you are purchasing the property for personal use, an unrented property would definitely be more advantageous. If there are already tenants in the apartment, you can terminate the lease for personal use after purchasing the property. Something similar applies to investors. On the one hand, you save time by not having to search for new tenants, but you are simultaneously bound to the rent. So, should you buy a rented or unrented property? Find out all the advantages and disadvantages here:

• Rented vs unrented

Location, location, location!

Not only the city is important, but also the neighborhood. Where is the nearest hospital? How is the connectivity? Are there a lot of vacant properties in the surrounding area? And how safe is the residential area? All of this affects not only your local living experience, but also the value of the property and the purchase price. What exactly does A-, B-, and C-location mean? How is it determined and how does it affect the purchase price? Find out more here!

• A-, B-, C-location

The perfect location

Depending on whether you are looking for a property as an investment or for personal use, the requirements for the location also differ. What are good locations for your personal investment goals?

• Find a location

New construction or existing property?

Both new construction and existing properties have their respective advantages and disadvantages. Here, the question is particularly important: Are you using your real estate for personal use? Or as an investment? After all, the use of your real estate also influences your decision. The differences between existing properties and new construction, as well as the respective advantages and disadvantages, can be found here:

• Existing property or new construction?

Age of the real estate: Advantages & disadvantages

Over 2.650.000 real estates currently located in Germany were built before 1919. Alone 5.000.000 of them before 1949. Some of these properties are real bargains on the market, whose later selling price can be significantly increased through value-enhancing measures. But what advantages and disadvantages does the purchase of an older property bring with it? Here is a direct comparison:

• Defects according to construction years



Size of House and Apartment

How big should the property be? In addition to the location and age of a property, its size also plays an important role. One-room apartment or villa with several bedrooms? Bungalow with basement or rather a duplex apartment? Here, both living area for personal use and for investment are compared. Especially for investors who plan to rent out their acquired property, the room layout and number of square meters are crucial.

• Optimal size of a property

Heritage lease? Yes or no

In some real estate properties, an inheritance lease is in place. But what exactly is an inheritance lease? Can the costs be deducted for tax purposes or even passed on to the tenant? Learn everything about the inheritance lease here, how it works and its advantages and disadvantages:

• Inheritance lease

Social binding? Yes or no

In addition to the inheritance lease, you may also come across the topic of social binding. Everything about your obligations regarding subsidized loans up to the binding period – is it worth it for you to buy a property with social and binding conditions?

• Yes or no? Social binding
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