Reasons and goals of a real estate investment

Reasons and goals of a real estate investment

The decision for a real estate investment has been made, but then the question quickly arises how to invest properly in real estate and what should you pay attention to? In order for the house or apartment to pay off as an investment in the long term, careful planning is required. Whether own use, real estate funds or crowd investing: We explain which strategies can be used to successfully invest in real estate and what advantages and disadvantages real estate investors should know.

The most important things about real estate investments at a glance

There are various forms of investment for those who want to do them. In addition to buying a home, this also includes real estate funds and shares as well as the acquisition of shares via crowdinvesting.

California real estate investing is considered a stable investment because it is subject to lower fluctuations in value than the stock market and is considered inflation-proof.

Whether a real estate investment pays off in the long term and in which properties you should invest depends on various factors, for instance, location, purchase price, or financing.

A real estate investment can be implemented through various strategies. These include buy and hold, fix and flip, 1/3/10, and the investment without equity.

Why should you invest in real estate?

Due to the low-interest rates that have prevailed for several years, many investment opportunities have increasingly lost popularity. Because due to the low level of interest rates, classic investments such as savings books, savings certificates, or fixed-term deposits can no longer be built-up assets.

If inflation is added, investors even achieve negative returns. For this reason, in times of low-interest rates, investors look for profitable investments for their assets in order to avoid a loss in the value of their money. Because the developments show that investing and investing money are increasingly replacing classic saving. Where other investments are losing popularity, real estate is more popular than ever as an investment. This is also shown by the investment behavior of Germans: Although the savings account is still widespread, according to surveys, real estate ranks second among the most popular forms of investment in Germany.

This is not surprising because the concrete money has many advantages. On the one hand, real estate as tangible assets conveys a good sense of security because they cannot be stolen as figurative tangible assets. In addition, the investment can also be inhabited at the same time. In addition to these reasons, inflation protection, increase in value, and tax advantages speak for an investment in real estate.

Investing in real estate does not have to be complicated because investors have different strategies to choose from how to make their real estate investment a success. First of all, this investment is about finding a good deal and financing the property as cheaply as possible. In fact, not a lot of equity capital is always necessary.

That’s why you should invest in real estate:

  • Physically tangible investment with concrete value
  • High-value retention and increase in value
  • Real estate return is higher on average compared to classic forms of investment such as savings accounts or overnight money.
  • Inflation-proof investment
  • Low loans for real estate acquisition can have a positive effect on long-term returns.

Buying a property

If you want to invest in real estate, you basically have the following options:

  • Condominium for self-use or rental
  • Single-family house or multi-family house for self-use or as an investment object
  • Purchase of commercial real estate for the purpose of starting a business or as an investment object

The calculation of the rental price multiplier can help to decide which strategy makes the most sense. This value indicates how much annual rents investors have to pay for the purchase of an object.

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