Macro, Meso & Micro: Definition

In addition to a distinction between A-, B- and C-location, the second step in determining the location is to distinguish between macro, meso and micro location. Thus, the macro location defines the city of the object, the meso location refers to the neighborhood and the micro location to the immediate surroundings. So, to describe the meso and micro location of an object, we must first define the macro location.

Here is the overview:

• Macro position (Where in Germany)
• Meso location (Which district)
• Micro-location (Exact location)

Let’s take a closer look at the different types of layers.

Macro location: A, B & C location

The macro location depends on your personal goal and individual strategy. Do you want to invest in a property as a capital investment? Is this a return or investment property? For investment properties, we always recommend A-locations, i.e. metropolitan areas such as Berlin, Hamburg and Munich. In the case of yield properties, it is best to look around in good B and C locations, as the rental yield is high here compared to the purchase price. Of course, your individual preferences are also in the foreground.

The different macro-locations summarized:

• A-location (metropolis)
• B-location (large city / city with positive development)
• C-location (small town / city with stagnant development)

So the macro location is about the question: Where in Germany is the property located?

Meso-location: infrastructure, connectivity & co.

So you have now decided on a city or place? Very good! Then we must now answer the question:

Which part of town do you want to go to?

Large cities in particular offer a large number of attractive districts, all of which differ in their character and charm. How well is the district connected? Is it easy to reach by public transportation? Is the neighborhood safe? Are the commutes to school and/or work long? So think about your living situation, future plans and needs in advance.

So here’s what you should definitely keep in mind when it comes to the meso layer:

• Infrastructure
• Security
• Proximity to work & school
• Connection to the other districts
• Environmental influences

Foremost in the meso location: In which district / neighborhood is the property located?

Micro-location: guaranteed feel-good factor

Finally, the last step is to determine the micro-location. This is about the immediate surroundings of your property. Is it located directly on the street or near railroad tracks? Is it quiet, especially at night, or does the street noise rob you of sleep? Where is the nearest shopping market? As soon as you step out of your front door, do you feel comfortable and safe?

This and more is the focus of the micro-location evaluation:

• Noise level
• Parking facilities
• Shopping facilities
• Cleanliness

The micro location of the house:

Conclusion: Personal preference & objective decides

So before you start looking for real estate, think about the criteria that are important to you. Look at different neighborhoods and also the street in which the property is located. After all, you should feel comfortable and safe here and not suffer a loss of value in the event of resale.

If you want to learn even more about macro, meso and micro location, check out my new site for buyers, Immobilien-Erfahrung.de:

• Macro, meso, micro situation explained – (external)

Buy a house? Risk: 100% ownership = cost

House – The own house, the home, for many the big goal when it comes to buying real estate. Whether it is for your own use or as an investment, you are the sole owner and thus also responsible for all investment costs when you buy a house.

No cost sharing, no apportionment to tenants

It is even more extreme with owner occupancy, because here you can not allocate costs to tenants. That owner-occupancy is the most expensive form of living, you have already learned in the article first buy property. After all, you are responsible for all costs, even later in retirement!

Operating costs and maintenance costs are always on you, even if the house has long been paid off. With a house, it quickly becomes expensive because, unlike an apartment where you are part of a community of owners, you bear 100% of the investment costs incurred.

Tip. Read the full comparison between house, apartment building, commercial and condominium, on my new project for real estate buyers (Immobilien-Erfahrung.de) here:

• Types of real estate, buy a house or an apartment? – external

Perpetual investment costs – example: Heating system

You have just paid off your house and a year later you have to buy a new heating system. Let’s say this heating system costs 10,000, so your share is a full 10,000 (as 100% owner).

If you had a condo, in an apartment building, say with 10 units (apartments), of which you own one unit, you would only have to pay 1,000, or 10%.

Let’s say a year later there is major damage to the roof. Damage that has gradually developed and occurred over time. Another 10,000 in repair costs. As a homeowner, it all falls back on you again. If you were a condo owner, so again part of a homeowners association (apartment building with 10 units), only 1,000.

Rent-free in old age? An old house…

No tax breaks for landlords, no subsidies for creating housing, no apportionment to your tenants.

That as a simplified example.

Without further maintenance and management costs, you would have to pay 20,000 as an owner. So much for “rent-free in old age” as an owner-occupier.

No matter whether owner-occupancy or capital investment, for real estate beginners the condominium is profitable in many ways and rather than a house.

Buying multifamily housing: More risk and sources of danger

Multi-Family – With a multi-family home, you have the disadvantages of being a homeowner first, plus significantly higher investment costs when you buy a multi-family home.

More floor space, more living space, more tenants, more frontage, more risks.

Accordingly, you need to have more equity available to pay the purchase price, but also to pay for the overall, ongoing operations of the apartment building. And remember, there are 2 big risks for landlords: Back rent and vacancy. With more tenants, the risk potentiates, especially in C-location and B-minus locations.

For an apartment building as an investment, if we talk about real estate entry, you also need more knowledge and experience. Purchase price negotiations, the subsequent rental and said vacancy of individual units. You have to cope with that, from the know-how (new tenants with creditworthiness) and in financial terms (continuing loan payments).

Buy commercial property

Commercial – Commercial has several disadvantages, for real estate beginners, for one, the legal requirements are different, the requirements for the property but also the legal framework, such as leases. In addition, there is a higher risk of vacancy, with commercial tenants, due to higher turnover than with residential properties. You need to consider all of this when you buy a commercial property.

Either way, headquarters, multi-family, commercial, the easiest way to get started in real estate is condos!

Buying a condo:

Condo – If you happen to have already read through our guide on buying your first property, then you already know that condos are the easiest way to get started in real estate.

The “easiest” way to become a real estate investor.

Here is a brief summary once again:

As a rule, you need less equity capital, on the one hand for the purchase but also for the subsequent operation of the property.

You are part of a community of owners and accordingly the investment costs are shared between the parties.

Renting a condominium is manageable, unlike apartment buildings. Houses additionally have a very specific target group, mostly families. At the same time, demographics are trending more towards single households.

Accordingly, our tip, buy 1-2 room apartments!

Buying a house: House types at a glance

Especially when buying a property, there are many factors to consider and choosing the right type of house is essential, for returns (rental) and appreciation (investment). Learn more about buying a house and the different house types here.

• Buy a house

House types in a list:

• Farm
• Bungalow
• Semi-detached house
• Single-family house
• Half-timbered house
• Holiday home
• Prefabricated house
• Wooden house
• Country house
• Massive house
• Apartment house
• Terraced house
• Beach house
• Villa
• Low-energy house
• Zero Energy House & Passive House

Buy an apartment: Types of apartments at a glance

The real estate market is almost endless, and the division of apartments is no exception. There are numerous types of apartments, all of which are differentiated from one another by a wide variety of factors. Read more about the topic here:

• Buy apartment

Here you will find an overview of the types of apartments:

• Old apartment
• Apartment
• Attic apartment
• Granny flat
• Apartment
• Loft
• Maisonette apartment
• Penthouse
• Basement apartment
• Terrace apartment

Even more facts about houses, apartment buildings and flats can now be found on my new project for real estate buyers (Immobilien-Erfahrung.de): Types of real estate, buy a house or flat?