Investing in real estate - efficient use of your investment

Real estate as an investment

When you buy a house or flat as an investment, you are initially the owner, manager and landlord all in one. You purchase the property and provide for a tenant who will help finance your loan repayment with their monthly rent payments. You can also opt for a less expensive property in need of renovation, which - if well located - can achieve a handsome increase in value after renovation. If you combine these plans with a listed property whose preservation is state-subsidised, then you have to observe certain structural measures, but you can also take advantage of very attractive subsidy measures.

Properties that serve as capital investments are often quickly put back on the market and sold in order to make a profit within a very short time. However, in order to achieve an optimal return, long-term value creation makes more sense. If you show patience and initially rent out the property, the tenant will bear part of the investment costs with his rental payments. In this way, you reduce your burdens during the redemption period. If you want to release the investment after a certain time, you have several advantages when selling it.

If you have carried out renovation measures, the property will have increased in value compared to the time of purchase due to the renovation alone. If the loan has already been fully or largely repaid at the time of sale, this increases your liquid financial resources immediately after the sale. If the potential buyer of your rented flat also wants to use the property as a financial investment, loyal tenants are considered a clear advantage. A permanently rented property provides the future buyer with a secure investment basis and thus accelerates the resale.

Real estate without management costs

You can buy entire houses or just a flat as an investment and rent it out yourself to the future occupant(s). However, looking after a property is a very time-consuming business. If you do not have the time for this, it is a good idea to work with real estate companies that will take over the lion's share of the care and management of your property for you.

These companies buy, for example, a complete residential complex. They allow you to invest money in these managed properties - you can buy a flat or shares in flats - and thus split your investment risk and your time expenditure. These apartment complexes are managed from caretaker service through to rental. Many property managers also offer the service of loss-of-rent insurance.

Alternatively, you could invest in a real estate company with a Real Estate Investment Trust. These listed corporations offer securities and shares and are regulated by federal law. Your advantage here is that you have no direct connection to the properties themselves, but participate in the appreciation of the properties through the shares and funds. In this way, you can profit from a booming real estate market without owning a property yourself as a whole, which you would have to manage in a time-intensive manner.

There are many ways to invest your money in real estate. If you know the differences, you can choose the investment model that is perfectly tailored to you and benefit from profit distributions on a flexible or long-term basis. Our experienced team of real estate agents in project development will be happy to show you how to make the most of an investment in real estate. Also discover our diverse range of flats and houses. At Engel & Völkers you will find a large selection of high-quality properties that are worth investing in.