Reinvesting in the property market

Property shares

Including Real Estate Investment Trusts (REITs) that are traded on the stock exchange and are interesting from a fiscal point of view, are shares in companies that achieve gains in the property sector through renting, leasing or selling property and plots of land.

Property bonds

There is no legally binding definition for this term, it can refer to any corporate bonds that relate to property. Bonds are essentially securities that document the holder’s right to a fixed interest rate and guarantees that they will be paid back the invested capital at a specified date. While this type of investment is very low risk, it generates low returns. Mortgage bonds are the best-known type of bond. Property bonds are secured by so-called “property liens”. This means that the property acts as a security for the bond holder.

Property funds

You can also invest in the property market through property funds. Shares in open-or closed-end funds that are invested in buildings or plots of land can be acquired.

Open-end property funds are based on a wide portfolio of properties in different regions or countries. They are often commercial properties, such as office buildings or shopping centres. The funds can be sold again subject to minimum holding, return or notice periods. This makes this type of property investment more liquid and attractive for investors.

The investment class “open-end, registered investment funds” includes affordable property ETFs. ETFs are easy to handle, very liquid and can easily be split across different holdings.

Closed-end property funds invest in just one or a few properties. By purchasing shares, you are become involved in the respective property company – sharing in both its successes and failures. As a general rule, closed-end funds have long terms and there is no provision for investors to drop out early. If the shares still need to be sold, this can result in high losses.

Crowdinvesting

Crowdinvesting is a form of investment where many investors come together and invest in the same project. This can be done cost-effectively through an online platform. It allows private investors to benefit from large projects with a relatively low investment and without the usual minimum investment amounts. As opposed to crowdfunding, where investors make a donation, crowdinvesting offers attractive returns that are often higher than the interest rates offered by other types of investment.

With crowdinvesting, you can benefit from short terms and a fixed interest rate of between 4 and 7 % a year. Crowdinvesting can be an exciting but not completely risk-free addition to your investment portfolio. It is usually recommended that you spread your capital across different projects and asset categories.

Healthcare properties

The demographic transition has caused an increased need for healthcare and nursing properties as they offer a wide range of housing options for seniors. There are already not enough properties to meet demand in this area. For capital investors, a future market is developing here and is becoming increasingly interesting thanks to the attractive returns and low risk return profile. In addition there is a clear “social return” from these investments, with a positive social effect resulting from the financial investment.

When it comes to investments in the healthcare market, there are a range of options available: plots of land, neighbourhood developments, planned projects and existing properties. As such, investors have opportunities to make individual investments in a single property, purchase several properties or an entire property portfolio.

This property category covers the following areas:

•  Classic inpatient care

•  Different forms of assisted living (serviced residences, residences with a concierge)

•  Intensive care

•  Outpatient assisted living

•  Clinics, medical centres and medical-care centres

The individual areas can also be combined with each other, for example a property may offer a combination of assisted living, inpatient care and day care.