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)

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• 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