About us: Lukinski & Partner in NRW, Berlin, Munich

My name is Stephan M. Czaja, founder of Lukinski. Together with my investor partners, we have more than 30 years of experience in investment, property purchase, and asset management. This experience allows us to provide a thorough rating within a few days and to handle sales without complications — from the first contact to the notary.

Our success is based on three fundamental principles: reliability, discretion, and flexibility. Anyone who has sold to us knows: no chain of enquirers, no viewing tourism, no backing out due to failed bank financing.

Direct purchase instead of real estate agent sale — the difference

With a classic real estate agent sale, your property is on the open market for 3–9 months. With a direct purchase from a long-term investor like us, you speak directly to the end buyer — no middlemen, no credit risk, no open listing.

• Speed: Initial offer within 14 days, notary appointment in 4–8 weeks
• Safety: Equity checked, no financing reservation required
• Discretion: No public advertisement, no viewing with neighbors
• Costs: No real estate agent commission (savings of 3.57 % gross of purchase price)
• Clarity: One negotiation partner instead of 20 interested parties

Our Focus: Apartments up to 50 m² & Multi-family homes from 200 m²

Our purchase profile is deliberately narrow. We don’t buy everything — we buy what we know, can assess and can hold in our portfolio in the long term. Specifically:

• Condominiums with 1–2 rooms, up to 50 m² living area
• Multi-family homes from 200 m² total living area, ideally 4–20 units
• Construction year from 1950 (younger preferred, Wilhelmine period upon request)
• Rented or unrented — both are welcome
• Location: A- and B-locations in NRW, Berlin, Munich and surrounding commuter belts
• Rental yield expectation: from 3.0 % gross in Munich, from 4.5 % in NRW

Contact us — discreetly and without obligation

Do you own a property that meets these criteria? Then get in touch. We treat every inquiry confidentially and provide an initial indicative price range within 14 days.

• Contact us directly
• Download the purchase profile as PDF

Purchase criteria in detail — Apartment vs. Apartment building

To help you quickly assess whether your property fits, here are the criteria of both asset classes in direct comparison:

What we do NOT buy

Just as important as the acquisition profile is the exclusion profile. Save yourself and us time — the following properties do not fit our strategy:

• Single-family homes for personal use
• Vacation properties, micro-apartments under 18 m²
• Leasehold properties without remaining lease term of over 50 years
• Commercial properties without residential component
• Locations under 50,000 inhabitants outside metropolitan regions
• Properties with unclear ownership status (except inheritance communities, more on this below)

Location profiles: Cologne, Dusseldorf, Berlin, Munich & more

Every city has its own investment profile. Rent level, purchase price factor (multiple of annual net cold rent) and typical micro-locations differ significantly. Here is an overview of our core locations:

Why exactly these locations?

These cities have in common: high immigration, low vacancy rates (under 2%), strong rental housing market, demographically growing target groups. For existing investors, this means: calculable rental default risks and stable value development. More about real estate as an investment.

Why small apartments — the investor logic

Compact 1- to 2-bedroom apartments are the most defensive asset in the residential segment from the landlord’s perspective:

• Highest rental demand: Singles, students, young professionals, commuters
• Lowest vacancy: Faster reletting, shorter vacancy periods
• Highest rent per square meter: Small apartments generate more per m² than family homes
• High fungibility: In the case of sale, always liquidatable
• Lower investment sum per unit: Better diversification in the portfolio

Condition of your property — we buy any

We buy real estate in any condition. Renovation needs, renovation backlog, vacant units, or difficult tenant structures are not exclusion criteria — they are part of our value creation logic.

Move-in ready & modernized

Immediately rentable properties at comparative value. Here, we pay market-typical factors without renovation discount.

Needs renovation

Renovation backlog is considered in the purchase price — we calculate based on our trade structures, not on list prices. This gives us room to still make you a fair offer.

Problem properties

Tenant nomads, construction defects, unclear heating situations, mold, missing energy certificates — all are discussable. Talk to us openly about it, the more transparent you are, the faster the rating.

How we evaluate your real estate

Fair prices don’t mean “any price”. We work with two standardized methods:

Income value method (for multi-family homes)

Purchase price = annual net cold rent × factor. The factor is determined by location, condition, rental index position, and modernization potential. Example Cologne-Ehrenfeld, existing rental, medium furnishings: annual net rent 60,000 € × factor 24 = purchase price 1,440,000 €.

Comparison value method (for condominiums)

Here we use actual sales of comparable apartments from the expert committee and adjust based on factor and condition. More information on this in our guide to real estate valuation.

What specifically increases or decreases the price

• +: Energy efficiency class A–C, balcony/terrace, elevator, parking space, quiet location despite central proximity
• +: Current rent below rental index (catch-up potential)
• −: Energy class F–H, renovation backlog, leasehold, unfavorable layout, ground floor facing the street
• −: Current rent significantly above rental index (risk of rent increase freeze)

Sale process — 5 steps to the notary

1. Enquiry (Day 1): You send us key details about the property via the contact form or by email.
2. Document Check (Days 2–7): We request land register extract, rental agreements, energy certificate, living space calculation. For multi-family homes additionally the last two years’ additional costs statements.
3. Indicative Offer (Days 7–14): You receive a written price range with evaluation logic.
4. Viewing & final offer (Weeks 3–4): A single discreet viewing, after which a final binding purchase offer is made.
5. Notary appointment (Weeks 5–8): Certification, preliminary registration, payment of purchase price via notary escrow account or direct payment against release of encumbrances.

Document Checklist — what you need

The more complete your documents, the faster the evaluation. The following documents should be ready:

Mandatory (always required)

• Current land register extract (not older than 3 months)
• Parcel map / location plan
• Living space calculation
• Energy certificate (consumption or demand certificate)
• Floor plan

Additional for Condominiums

• Partition declaration with division plan
• Last 3 meeting minutes of the condominium owners’ association
• Financial plan and annual accounts of the WEG
• Amount of the maintenance reserve

Additional for rented properties

• Current rental agreements
• Rent breakdown with cold and warm rent per unit
• Additional costs statements of the last 2 years
• Rent increase history

Special cases: Heritage, Divorce, Compulsory situation

Heirs’ community

We buy regularly from

We buy your apartment immediately!

A home is not just a place, but a precious memory of moments that have shaped life. In the hustle of life, when time makes all the difference, speed alone is not enough – immediate action is required.

We buy real estate in NRW and Berlin discreetly, with fast processing. Find out more about us here: Direct Purchase Real Estate

We understand the value of your time and offer you more than just a quick process. We offer you the opportunity to sell your apartment without delays – immediately and uncomplicatedly. Your advantages are numerous:

No real estate agent fees
Fast processing and payout
Guaranteed at a fair price

Immediate Purchase: Our Contact

Immediate Purchase: We buy every apartment! We look forward to your call or email:

• Contact us

An alternative step-by-step guide for selling your apartment through real estate portals, with and without a real estate agent.

Faster and more straightforward sale of your apartment:

We buy your apartment immediately!

Selling an apartment can be a complex matter, accompanied by a variety of considerations and potentially hidden costs. With our instant purchase service, we place great value on transparency and offer you clear advantages that make your selling process pleasant and profitable.

No real estate agent fees: Your profit remains untouched

In the traditional sales process, real estate agent fees can be significant and make up a substantial portion of the sale price. We start here by offering you a solution where no real estate agent fees apply. Your profit is not reduced by hidden costs, and you retain the full sale proceeds.

Quick processing and fast payout

In the real estate industry, time is a scarce resource. We understand that every day counts and that a quick processing is of great importance. With our offer, we not only ensure a swift sales process but also a fast payout of the sale proceeds. Instead of waiting weeks or even months for the sale to conclude, you can free up your capital within the shortest time with our instant purchase service.

Fair price: market knowledge meets your interests

Determining an appropriate selling price is crucial for a successful sale. Our experts have in-depth market knowledge and carefully analyze current conditions. The evaluation of your property is objective and takes into account various factors. We guarantee you a fair price that considers not only your interests but also our obligations. Your apartment will be appropriately valued, so you can confidently enter the selling process.

Our Mission

Our Mission is to make the sale of your apartment as smooth and transparent as possible. We know that trust and satisfaction are the keys to a successful collaboration. With our instant purchase service, we offer you the opportunity to sell your apartment without unnecessary obstacles and delays, while benefiting from the clear advantages of a fair price and a quick process. Your sales success is our goal, and we are happy to support you in achieving it together.

The Instant Purchase: Your Contact Person

We are proud to present ourselves as your reliable partner in real estate sales. Our goal is to make the selling process as smooth as possible and give you the freedom to focus on what truly matters – your future. We buy every type of apartment! We look forward to hearing from you. Contact us either by phone or email to learn more about our offer and take the first step toward an immediate sale.

• Contact us

In a world where time is often a scarce resource, we offer a solution that is not only fast, but also fair and uncomplicated. Your apartment sale should not be hindered by bureaucratic obstacles or uncertain transactions. With our instant purchase service, we are setting a new standard for the real estate market and enabling you to focus on the next phase of your life.

What is Fix & Flip? Definition, Margin & Risk

Fix & Flip describes a short-term trading strategy in which a property in need of renovation is purchased below market value, upgraded through targeted measures, and then resold for a profit after 6 to 18 months. The profit is generated from the difference between the selling price and the total investment (purchase price + purchase ancillary costs + renovation + financing + selling costs + tax).

Realistic net margins in properly calculated Fix-&-Flip projects range between 15 and 25 percent of the selling price — anything below that is not worth the risk.

In contrast to the Buy-&-Hold strategy, it is not about rental yield or long-term appreciation over decades, but about active trading — comparable to stock trading, only with significantly higher capital requirements, longer cycles, and major tax implications.

Fix & Flip vs. Buy & Hold: Direct Comparison

Advantages of Fix & Flip

The strategy allows for substantial profits to be realized in a short period of time and for equity to be increased more quickly than with any classic rental strategy. Whoever completes three successful flips within two years can potentially double their initial capital — provided the market conditions are favorable.

• Rapid capital growth: Profit in 6–18 months instead of 10+ years
• Scalability: Profits can be immediately reinvested into the next property
• Market Experience: Intensive practical knowledge about locations, building condition, craftsmen, and buyer behavior
• No Tenant Risk: No rental shortfalls, no additional costs settlements, no rental law conflicts
• Control of Value Creation: You yourself determine the leverage through renovation

Disadvantages and Real Risks

Fix & Flip is not a playground for beginners — the media hype overshadows the complexity. Anyone who underestimates renovation costs, misjudges the market timing, or ignores the Control can quickly turn a 50,000 Euro profit into a 30,000 Euro loss.

• Cost Explosions: Hidden defects (mold, dry rot, asbestos, structural issues) can blow budgets by 50–100 percent
• Construction Delays: Every additional month costs interest, readiness fees, and opportunity costs
• Market Timing: Rising interest rates or falling demand during renovation can tip the calculation
• Full tax liability: Within the 10-year speculation period, the entire profit is subject to income tax
• 3-property limit: Starting from the fourth sale within five years, there is a risk of being classified as a commercial real estate dealer
• Liquidity risk: If no buyer is found, you end up with a fully renovated but unrented property
• Competition from professionals: Developers and existing property holders often have better access to off-market deals

Step 1: Find & buy a fix-&-flip property

The profit is made during the purchase — not during the sale. This trader’s wisdom is especially true in real estate trading. Whoever buys 10 percent below market value has already secured half of their margin on the day of handover. Whoever pays market price must make up for everything through renovations — and fails in 80 percent of cases.

Location strategy: Where fix & flip works in Germany

Pure A-areas (Munich, Hamburg-Eppendorf, Frankfurt-Westend) are usually too expensive for Fix & Flip — the entry prices are so high that the renovation margin no longer covers the costs. Real Fix-&-Flip goldmines are up-and-coming B- and C-areas with gentrification dynamics:

• Commute belts of the top 7 cities: Commuter communities with S-Bahn connections
• Second tier in metropolises: Neighborhoods directly adjacent to trendy districts
• Rising medium-sized cities: Leipzig, Dresden, Magdeburg, Erfurt, Bremen, Augsburg
• University cities with growth: Heidelberg, Münster, Tübingen, Regensburg

Off-Market: Where professionals really buy

You rarely find real Fix-&-Flip deals on ImmoScout — by the time a property is listed there, it has already been seen by three professional investors. Experienced flippers work differently:

• Forced auctions: Court auction calendars, often 20–30 percent below market value
• Heir communities: Quick sale, because multiple heirs cannot agree
• Executor and Insolvency Administrator: Direct contact pays off
• Direct mail contact: Write to owners of visibly vacant properties
• Real estate agent network: Work with agents who know you bring cash and speed
• Developer leftovers: Individual unsold units from older projects

Structural inspection: Red flags & deal-breakers

Before making an offer, have an independent building expert inspect the property — the 800 to 1,500 euro fee is the best investment you can make.

• House fungus: Renovation starting at 30,000 euro — almost always a deal-breaker
• Asbestos in roof, floor or facade: Special disposal, often five figures
• Moisture in the basement: Drainage and external waterproofing starting at 20,000 euro
• Static defects: Cracks, sagging ceilings, subsidence
• Outdated electrical wiring (cable wiring): Full reinstallation 80–150 EUR/m²
• Energy certificate F, G, H: GEG renovation obligations, no KfW leverage
• Heritage lease instead of ownership: Reduces selling price by 20–40 percent
• WEG with empty reserves: Special charges threaten
• Monument protection: High additional costs, restricted renovation freedom

Fix-&-Flip financing: Banks, equity ratio & interim financing

Standard banks are reluctant to finance Fix & Flip — short holding period, no rent as capital service, high sales risk. They require either a specialized bank, a private investor or interim financing.

• Equity ratio: 25 to 40 percent — significantly higher than with classic rental
• Interest rates: 0.5 to 1.5 percentage points premium compared to existing financing
• Repayment substitute: End-date loans are common, as repayment occurs through sale
• KfW funding: Usually not usable for pure sales — remaining ownership is a prerequisite
• Availability interest: 0.25 percent per month unused in case of a longer renovation period
• Early repayment compensation: When selling before the end of the interest rate period — regulate contractually in advance

Read more about financing with our partners: Fix & Flip Financing.

Step 2: Enhance the property — Renovation lever with the highest margin

Not every renovation is equally profitable. Professionals invest where one euro in renovation costs brings two or three euros in value increase — and avoid measures that only burn money without impressing buyers.

Reno costs per square meter: Realistic ranges

The five measures with the highest leverage

1. Bathroom renovation: 8.000–15.000 EUR investment, 20.000–30.000 EUR value increase
2. Kitchen (open, modern): Visually the second biggest sales factor after the bathroom
3. Oak parquet or high-quality vinyl: Replaces carpet/laminate, enhances premium impression
4. Energy-efficient renovation with jump in energy certificate: From G to C is decisive for purchase
5. Floor plan optimization: Remove a wall for an open living-dining area, often under 5.000 EUR

What You Should NOT Do

• Designer fixtures or luxury brands — buyers don’t pay the premium
• Pool, sauna, full smart home equipment — narrow target audience
• Taste design (eye-catching colors, exotic tiles) — neutralize radically
• DIY without trade experience — costs time and reduces resale value

Deep dive: Enhance your property.

Step 3: Sale — Staging, Pricing & Timing

A professionally renovated property deserves a professional sale. Amateur phone photos and incorrect price listings can turn a 50,000-euro renovation success into dust within two weeks.

Pricing strategy: How to find the optimal asking price

• Three independent appraisals: Real estate agent, expert, online tools for cross-comparison
• Don’t set the price too high: More than 10 percent above market value leads to prolonged listing time and suspicion
• Not too low: Too fast sales leave margin on the table — build up demand first
• Check bidding procedures: In top locations with high demand, often 5–10 percent higher revenue

Home Staging & Marketing

• Professional HDR photography (300–800 EUR investment, often more than 5,000 EUR additional revenue)
• Drone shots for houses with gardens or special features
  ]]> https://lukinski.com/how-to-buy-rental-property-becoming-landlord-investment-purchase-tips/ Tue, 30 Mar 2021 11:43:21 +0000 https://lukinski.de/?p=38918 USA – So you want to become a landlord? You want to buy a rental property in the form of a house or apartment? There’s a lot to plan, from finances, to tenants, taxes, and more. Whether you want passive income, or to make it your primary point for cash flow is up to you. With many investment strategies and possibilities, we take you through the best tips and tricks, along with simple, easy-to-understand explanations of all the most important terms and concepts. Advantages, disadvantages of such investments, what to look out for, and which way best to finance everything.

  Buying Real Estate Rental Property – Best Investment Strategies

  More and more people are choosing to buy rental property as a lucrative way of receiving passive income, with many opportunities for further investments, massive profits, and a life of luxury and opulence. There is much to consider and research before you make any investment in rental property, but you’re likely going to be quickly looking at cash flow and a realtor lifestyle you could only have dreamed of.

  

  Is Buying a House to Rent a Good Investment? Advantages Disadvantages of Rental Property

  There is not one clear answer to whether buying rental property is a good investment. It depends on many factors such as location, the behavior of the market, the tenants, unexpected costs, etc. Therefore it is impossible to say whether it is a good investment for you until you inform yourself as best as you can, and make an educated decision.

  Advantages of Rental Property Investments – Tax Deductions, Financial Security

  Being a landlord often sounds like a dream job. Essentially you’re being paid because people are living somewhere. It is the most famous and infamous source of passive income. This is perhaps its biggest advantage. In terms of how much work you have to put in per dollar earned, it can be extremely lucrative. Another advantage is that the real estate market tends to be quite stable, which means that the majority of properties (bought in good areas) increase in value. That means, while you’re making a passive income, one day the mortgage will be paid, and despite having made money off of your investment, you can sell it at a higher price than you bought it!

  

  Rental Property Taxes – What Taxes do Landlords Pay?

  For one, rental income is not subject to social security taxes. The social security tax rate is currently 12,4% split by employer and employee, meaning that when owning rental property you are paying 6,2% less taxes.

  Disadvantages of Rental Property Investment – Difficult Tenants

  The biggest downside is dealing with difficult tenants. These can be those that are harmful for the atmosphere (e.g. by being loud), those that damage property (high repair costs), and those that do not pay their rent on time. Another downside is also that you are legally bound quite heavily, as renters are strongly protected by the law. That means that difficulties can arise, and cause a lot of stress. Of course it’s important to decide in what real estate to invest, because if you buy a house, these issues tend to be less serious.

  • Damaging Tenants
  • Tenants who do not Pay Rent

  

  What does a Landlord Do? Tasks, Responsibilities when Owning Rental Property

  In short, a landlord is in charge of general upkeep. That means repairs in the house such as plumbing or electricity which the landlord has to fix. Other things include maintaining the more general facilites. For example, if you own rental property you have to make sure common areas are cleaned, the doors, elevator, etc. all work, and more. Then comes the problem of rent. Some tenants can be quite a hassle when they don’t pay rent on time, in which case you have to contact them and collect the rent yourself.

  • Repairs in home
  • Maintenance of Property
  • Collecting Rent

  Financial Planning for Becoming a Landlord

  That means paying off all debts, making sure you have enough saved up for a downpayment, and securing your finances for the long-term future. It is also probably a good idea to secure a separate business account.

  • Save enough for a Downpayment
  • Job Security

  

  Six Steps to Purchasing Rental Property – Buy House, Apartment

  The five steps to owning rental property begins with your finances. Next, research and strategy. Where do you want to invest, how is the market in that area, what type of real estate you want to invest in, the general turn of the economy and much more! Now your strategy with short-term vs long-term rentals, buying a house or apartment, etc. Step 4 is finding the property you want to purchase. Step 5 means buying the property (and getting a good deal!). And lastly, perhaps most difficult, find tenants!

  1. Order your Finances
  2. Research
  3. Strategy and Investment Planning
  4. Find the Property
  5. Purchase Property
  6. Find Tenants

  

  Step 1: Order your Finances – Landlord Bank Account, Savings

  The most important thing before buying a house or buying an apartment is to get your finances in order. That means having paid off all debts, or nearly all, having a good credit score (otherwise get ready for mortgage insurance). Then, you will want to open a separate account. This can of course be done by registering a real estate LLC in which case you would buy the property over the company. Otherwise you will have to open a new account.

  Step 2: Research – Where to Buy, When to Buy Rental Property

  This is an important step, as you will need to get a lay of the land of where you want to invest and how. There is no universal manual because, e.g. if you buy a house in New York, it’s different than if you buy an apartment and then even more different if you buy an apartment in L.A. It’s also critical to know about the more specific location, there are always up-and-coming neighborhoods in every city. The top USA real estate neighborhoods are spread out all over, and you could be living near one without knowing! We’ve tracked down the best locations for the biggest players in American real estate:

  • Top Neighborhoods: New York
  • Top Neighborhoods: Los Angeles
  • Top Neighborhoods: San Francisco
  • Top Neighborhoods: Miami
  • Top Neighborhoods: Las Vegas

  

  Step 3: Strategy, Investment Planning – ROI, Value

  The typical question for real estate and rental property investment is the ROI. ROI means return on investment, which is typically expressed in a percentage. It just tells you how much money you make in proportion to how much money you spend. You should know that, unlike stocks, or REITs, rental property will not be valuable or a good investment because it is constantly rising in value. Rather it is an additional income on the side, apart from your normal investments.

  • ROI = Return on Investment
  • Real estate is about cash flow

  

  Step 4: Find the Property – House Hunting, Realtors

  Next step is to find property, this can turn out to be quite difficult or quite easy depending on the region. Typically this is also the point where you will decide whether you choose a fixer-upper or a ready house. For experienced investors this is a normal thought, but if you are just starting out, a fixer-upper can be extremely risky and bankrupt you. Unless of course you want to get into flipping houses.

  • Fix-Up or ready house?

  Step 5: Purchase Property – Mortgage, Cash, Downpayment

  Of course with a cash purchase you can circumvent a lot of the additional real estate purchase costs, but not all (think mortgage tax and transfer tax, and moving expenses). Still, as soon as you purchase with a mortgage you will be paying more in the form of mortgage interest. There are different opinions on the specifics, but it is always important that even if you are absolutely in love with a house, to let cooler heads prevail. There are many reasons to buy a house for rental property, but these are all related to finances and strategy.

  • Real Estate Closing Costs
  • Logic should decide whether you buy

  

  To learn more about what happens when you get to the point of actually buying a house, you can take a look at our article on all the taxes you will pay when you buy a property or real estate.

  Real Estate Purchase: All Taxes

  Step 6: Find Tenants – Advertising, Location

  This is the point that it can get very very frustrating, or very comfortable. If you’re living in a place like L.A., this can be quite easy with very high demand making a good tenant easy to find. In other places you may have to wait for the right one. Important though, if you get the feeling that the fit isn’t right, don’t sign a contract! It is near impossible to force a tenant out legally, and one more month without the extra income won’t make the difference.

  • Don’t rush the search
  • Easier in bigger cities, with higher demand

  

  Top 5 Tips for Buying Rental Property! LLC, Saving Taxes

  There are many things to be aware of, and things to take into account for buying rental property for real estate investment. It’s important that you research a lot so as to make a smart decision. Still, there are a few secret tips that are very important to ensure quick profit from rental property!

  1. Do the Math!
  2. Landlord Insurance
  3. Found a Company
  4. Buy or Finance?
  5. Go out of State

  

  Do the Math! Research, Calculation of Costs for Rentals

  This is critical. Of course, before investing in rental property the most important thing is extensive and intensive research. This does not only consist of informing yourself about e.g. mortgage or mortgage interest, and a downpayment. The main question is: for each dollar that you invest in this real estate rental investment, how much will you get back. Factor in the time, and then compare to your finances. It is possible that your investment strategy only offers returns after two years. Can you hold out that long?

  For each dollar you invest, how much will you gain? When is your investment profitable?

  

  Get Landlord Insurance! Recover Lost Rental Income, Liability Protection

  There are going to be accidents, unwanted injuries and more on your property. You need to protect yourself from this. One possibility is with a limited liability company or the similar s corporation (see below), but this is not going to protect you legally, rather than just make sure that a legal action does not bankrupt you. So you have to get landlord insurance! A landlord insurance covers lost rental income (great for the rare difficult tenant), damage to the property, and of course, as mentioned liability protection against injuries or worse on your property. Remember, itemizing insurance costs is one of the top methods of real estate tax deductions!

  • Protection against lost rental income
  • Damage to property
  • Liability for injuries on property

  Found a Company – LLC, S Corp or C Corp

  As mentioned above, it’s important to protect yourself from possible liabilities. Even with landlord insurance, you should likely put in the effort and cost to found a real estate entity which owns the buildings in your place. The main examples are the LLC, S corporation, C corporation, and Limited Partnership. These all differ in the degree to which they protect you from liability, but also to the degree in which they prevent double taxation, a common problem with other real estate investment entities.

  • LLC
  • S Corp
  • C Corp
  • Limited Partnership

  

  Buy or Finance? Mortgage or Cash for Rental Investments

  You will hear many voices insuring you that the only smart choice for buying a rental property is to finance it, in other words to buy it using a mortgage. This is true in most cases, but if you have the money available, buying cash can be even better. No mortgage interest, no uncertainty, and you profit right away. Of course you’ll be a few thousand dollars lighter, bt this comes in with rental income over time. It’s also seemingly forgotten at times that a house purchased with a mortgage still requires a substantial downpayment, as well as significant additional costs buying real estate, which means even with a mortgage, where, e.g. a 20-year plan can hound you for years, you have some saving to do before starting to invest and reap profits.

  • Buy with mortgage
  • Consider alternative cash options

  

  Go out-of-state! Rental Investments Far away – Is it Profitable?

  Many first-time investors make the decision to buy close to home. They hear a great offer for a house nearby in an up-and-coming neighborhood and choose to buy because it’s just a few minutes drive away. It’s true of course that this has its advantages; if a renter has an issue or a repair, you can come by quickly and fix it, you can give personal house tours with no problems, etc. At the same time, it’s a calculation game. There are extremely profitable neighborhoods in many parts of the country. Buying a rental there can give you much larger profits in much shorter time. These profits would offer the possibility of a property manager, reduces your involvement and makes the now-larger income even more passive.

  • Advantages to buying nearby
  • Far away can be much more profitable

  

  Gross Rental Income – Top Tip for Saving Taxes

  Easily explained: rental income is taxed as your normal income would be taxed. That means you add it to your salary as you would a normal job. Rental income can include the following types of payments: Advance payments of rent, non-returned deposits, services provided in exchange of rental income. Now we know what the income consists of, but the question is how can you pay less of it?

  

  What can be Deducted from Rental Income? Itemizing Tips

  You can deduct more than you think from your rental income. That includes things like the mortgage interest of your property, the insurance costs and property taxes. Along with these it is also typically possible to deduct fees such as those for advertising your properties, and those for legal assistance and for the Homeowner’s Association.

  • Depreciation
  • Property Manager Payments
  • Mortgage Interest
  • Insurance Costs
  • Property Taxes
  • Advertisement Fees
  • HOA / Condo Fees
  • Legal and Professional Fees

  

  There’s so many more tax deductions you can use when you own real estate, whether as residence or as a landlord!

  Real Estate Tax Deductions

  Best Gross Rental Income Deduction! Depreciation

  The most important concept here is depreciation. Depreciation is the answer to every time you wondered why real estate moguls and landlords pay so few taxes. Large items bought for business purposes can be deducted from your taxes, but not all at once. That means e.g. a property worth $250.000 which is deducted from taxes over a 27,5 year period, leads to a reduction in your taxable income of

  $250.000 / 27,5 y = $9.090

  per year! Add that to all the other possible real estate tax deductions, and many owners pay no taxes on their rental income!

  ]]> https://lukinski.com/buy-villa-exclusive-real-estate-house-investment-checklist-procedure/ Sat, 20 Feb 2021 18:32:01 +0000 https://lukinski.de/?p=36030 Buying a villa – exposés of first-class properties are not found on real estate portals. Villas are gladly bought and sold discreetly. The purchase of real estate has a fixed procedure: Property search, inspection, negotiations, purchase contract, notary, taxes & Co. The purchase of villas is of course somewhat more demanding. If only because you certainly don’t want to waste time on 8, 9 or even 10 viewings, like normal home buyers. You want to buy your first villa? Here’s a little insight into the world of luxury real estate.

  Living comfort and a prestigious effect

  A villa means exclusive living comfort and a representative effect to the outside, a special challenge for real estate agents, or luxury agents. In addition, a villa is interesting as an investment property. The term villa originates from Roman times and means manor house. Today, not every villa is also a luxury object. Sometimes country houses located in urban centers are also called villas. In any case, villas are distinguished by their size, by a characteristic room layout, as well as by the land areas surrounding them.

  In any case, there is a need for villas in today’s real estate market. Prices for these properties have risen sharply in recent years. The most sought-after villa locations are located in the catchment area of large cities.

  

  Buy a villa? Our most exclusive properties

  Our most exclusive properties you will actually not find online in our real estate portal. Celebrities, industrialists, sellers from business and media are looking for discretion and therefore rely on real estate experts with an internal circle of buyers and filtered communication channels. Are you looking for a villa in Germany, Europe or the USA? We have first class properties that you will not find anywhere.

  • Off Market Properties
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  Price development of luxury villas: Low interest rate phase

  Since villas are highly sought after, especially as investment properties, and many investors are investing in real estate due to the period of economic recovery and low interest rate policy, the prices of these properties have also increased enormously. Over the long term, however, this price trend is by no means exceptional. Since 1975, real estate prices have risen only moderately. Towards the end of the last century, prices fell somewhat, but since the economic upswing they have been on the rise again.

  Villa as a purchase object: Invest, instead of “only” live

  In which real estate to invest? From an investor’s point of view, the villa has a special significance. It serves primarily as an investment object.

  Secondarily follows the own use as a residential property and in many cases the new owner rents the villa. In vacation regions these objects are often rented out as vacation homes. This means that income can also be generated from the purchase of a villa. Indeed, the maintenance of these properties is also associated with high costs.

  Checklist: Construction, extras and security

  Basically, several components play a role in the purchase of a villa. These include, among others and very roughly simplified:

  • Location of the property
  • Property
  • Living space
  • Main house, if necessary adjoining houses
  • Height of the rooms
  • Furnishings and extras
  • Security and accessibility

  Location: the most expensive neighborhoods

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  Many villas or country houses are located in the periphery. Whether in Berlin, such as Grunewald or in Los Angeles Beverly Hills. There, therefore, a high degree of mobility is necessary for residents. Some villa colonies, on the other hand, which are mainly found in large cities such as Paris are very centrally located.

  The upscale residential environment, where most villas are located, is the decisive factor for a higher purchase price. However, the plot on which the property is located is also crucial. The property serves as an individual leisure oasis. It is private and therefore does not have to be shared with anyone.

  Luxury you have to be able to afford

  However, the disadvantage of this is the high cost of maintaining the garden area. Often, a separate gardener must be appointed. A villa is also characterized by its spacious room layout. These rooms can be adapted to individual needs. Here too, however, it must be remembered that the maintenance and cleaning of these rooms involves a lot of effort. Most villas are equipped with relatively high rooms. They convey a feeling of individual freedom. Their flood of light gives a feeling of well-being. However, the disadvantage of this is the high heating costs

  Tip: If you come at this point already in the calculation, buy rather a number smaller! Here you can find my guide: Buy a house.

  A villa is great for customizing. If several people occupy the property, so everyone has his own retreat there.

  Villa as a rental property: Rent instead of buy?

  If you want to buy a villa, you can consider renting out the property. This is an additional income opportunity that justifies the investment costs, at least in the medium term. However, there are tax issues to consider here.

  Rental agreements offer tenants certain freedoms with regard to the interior design and the layout of the outdoor facilities. In the case of vacation villas, individual use is particularly interesting for vacationers. These villas are mainly located on the North Sea and the Baltic Sea. Also islands like Sylt or Helgoland offer villas as vacation domiciles. Many investors use the opportunity to buy a villa in such locations and rent it to tourists. When buying a villa, it should be noted that the investment must be planned very carefully due to its size.

  • Reading tip: Renting from the apartment house

  First, you should in any case assess whether an object offered for sale is really a luxury property or a villa. The prices for these properties are significantly higher than for normal objects. Whether it is a luxury property, describe the following criteria:

  • The exclusive location
  • A generous equipment
  • The presence of special details

  When is a villa a villa? Assessment

  An exclusive location is particularly when the property is located in an upscale residential environment or in a special area. This includes islands, properties with sea views or properties in central locations in large cities.

  Well-equipped villas also have their own pool area, a large terrace and a well-kept garden. Fitness rooms or a covered swimming pool can also be part of the luxury equipment. Special details are, for example, the provision of house staff or a gated community. This is a residential area with restricted access. However, this still has secondary importance in Germany.

  Evaluation of the property: house or apartment building

  • Valuing a house
  • Valuate multifamily house

  

  Costs: purchase price and incidental purchase costs

  When selling a property, there are also costs that both the buyer and the seller have to pay.

  Who pays which incidental purchase costs?

  Explained in Quick:

  1. Realtor – Under the new Real Estate Realtor Act, the cost of the broker is split 50/50 (buying from a private party); previously only buyers
  2. Notary and land registry pays buyer
  3. Property transfer tax pays buyer

  This means that if you buy the property privately, under the new law – with reservations – the cost of the real estate agent would be divided in half. If, on the other hand, you buy through a company, such as a family office, the distribution is freely negotiable. In 98% of cases, however, the costs are borne by the buyer of the villa.

  Checklist of ancillary costs: expert opinion to notary

  These include, first and foremost:

  • Value appraisal
  • Energy certificate
  • Broker’s commission
  • Property transfer tax
  • Speculative tax
  • Notary and land register

  The energy certificate, the real estate acquisition tax, the speculation tax and the notary fees are mandatory. The value appraisal and the broker commission are optional if these services are commissioned.

  Individual cost factors

  Most other items depend on the price of the property and vary individually. A speculation tax is incurred if the property is resold within a certain time after purchase. The tax authorities then access the profit made.

  Notary fees and land register

  The notary fees in Germany amount to 1.5% to 2% of the notarized sales price. In most cases, only the buyer of the property bears the notary costs.

  Who bears the costs?

  As a rule, the buyer.

  Property transfer tax of the federal states

  The real estate transfer tax is divided between buyer and seller and amounts to between 3 % and 6.5% of the notarized services for land and building, depending on the federal state.

  Who bears the costs?

  As a rule, the buyer.

  Energy certificate and landlord info

  The Energy certificate is prescribed at $ 300 for a simple certificate and $ 500 for a detailed certificate.

  Who bears the costs?

  As a rule, the seller.

  Tip. Here we have collected for you various basics for renting. What else is important, besides the energy certificate?

  Broker commission and cost allocation

  The brokerage commission varies by state and ranges from 5.95% to 7.14% of the agreed sales price. The bearer of these costs is either the buyer or the seller, depending on the constellation. In some cases, these costs are also divided proportionately.

  Tip. The commission amount is negotiable.

  Who bears the costs?

  As a rule, the buyer.

  Buyer Tips: Owner occupancy / rental

  1. Buy a house
  2. Buy a multi-family house

  Own use: buy a house

  Buying luxury real estate – How many luxury properties are sold each year in Germany? There are less than 400.The market is extremely exclusive. Good contacts, a long-standing network, discreet offers and inquiries. Welcome to the world of luxury real estate. We show you how many square meters you get for your money. In New York, Berlin, Hamburg, Tokyo and Dubai. Buy and sell in the most expensive cities in the world.

  • Buy a villa for the family

  

  Build or buy?! Apartment houses

  Your idea has manifested and your dream of a house is becoming a reality. You’ve already looked at a few properties, compared prices and budgeted for your home purchase. Before you enter into closer negotiations with sellers or reserve a property, you should plan your home financing and determine your terms. The more professionally you proceed and the more concretely you plan, the less complicated the house purchase will be, from the idea to the financing to the notarization to the conclusion of the contract. Then everything is ready for the renting from multifamily house.

  • Build or buy?! Apartment houses

  

  Alternative: buy exclusive condominium

  The decision to buy a condominium (ETW) is made by most buyers for two reasons. The buyer wants to use the apartment to live in it himself. Other buyers are looking for a financial investment that will provide a good profit in the medium or long term.

  • Buy an exclusive apartment

  

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