Guide for investment properties

What are direct real estate investments?

A direct real estate investment is the decision to purchase a specific property, a “hands-on” investment property. In addition to apartment buildings and residential and commercial buildings, investment opportunities also include commercial real estate (office buildings, retail space, hotels and industrial properties), land or healthcare properties such as care or serviced apartments.

What are indirect real estate investments?

Unlike direct real estate investments, indirect real estate investments do not involve the acquisition of a specific property. Nevertheless, capital is invested in the real estate market, for example with real estate shares, e.g. real estate investment trusts (REITs). These are shares in companies that generate their profits in the real estate sector by renting, leasing or selling properties and land.

Capital investment in real estate is also possible with real estate funds. This involves acquiring shares in open or closed-end funds that invest in buildings or land. Crowdinvesting, see below, is also an indirect form of real estate investment.

How to optimize a real estate portfolio?

A portfolio can be optimized - with the aim of generating a higher return - by investing in a different segment or location, for example. The general investment pressure on the real estate markets and other influences, such as demographic change or a shift in purchasing behavior towards online shopping, have led to an increase in investor interest in logistics and corporate properties as well as care and healthcare properties - keyword “age-appropriate living” - in addition to high demand for residential and commercial properties.

How does crowd investing in real estate work?

Investing in real estate through crowdinvesting is a form of investment in which many investors join forces and invest money together - handled cost-effectively via an online platform. Private investors can also benefit from investments in large projects with relatively small amounts of money - without the usual minimum investment sums.

Crowdinvesting is an exciting but not risk-free addition to other forms of investment. It is generally advisable to spread capital across different projects and asset classes. Find out more about the crowdinvesting model with Engel & Völkers Digital Invest.

What is the right investment strategy?

Apart from personal reasons, it is above all the situation on the real estate market that determines the right time to buy or sell a property as part of an investment strategy. For example, low interest rates or an uncertain macroeconomic situation make investments and shares less attractive, while investments in “permanent assets” such as real estate become more attractive.

You should act in a targeted manner and be well versed in the market (or seek appropriate advice). This is because market prices and development opportunities vary greatly from place to place - especially with regard to residential and commercial properties. The Engel & Völkers market reports for apartment buildings. They provide interested parties with a clear overview of prices and trends, differentiated by region.

Which real estate segment to invest in?

The decision to invest money needs to be carefully considered. There are significant differences between the individual segments, such as apartment buildings, vacation homes, commercial space (e.g. industrial or logistics property, office buildings or retail space) and mixed-use properties, not only in terms of potential returns but also in terms of tax advantages.

So what type of property should you invest in? In a specific property? In which areas? Or is it better to invest indirectly in a real estate fund? Is crowdinvesting an option? Your decision for an investment strategy is as individual as you are. Take your time and think about what goal you want to pursue and what information you still need.

No matter what questions you have: Talk to us. We will be happy to provide you with comprehensive and individual advice on your real estate investment and beyond. We will support you in making the right decisions.

Please note: The information on this page is non-binding and does not replace legal, tax or financial advice.