Hello everyone, 😊

Today I want to talk about another topic in which I am very deeply involved professionally.

Yes you heard right no technical analysis.

The monument real estate and the possible tax optimization.

Why it pays off so well and why I think everyone should own at least one.

I currently work for a "relatively" large real estate sales/project developer.

We specialize in capital investments in the area of new construction and listed properties.

I recently had an interesting conversation with @Hannes_SK in which it became clear that this could be interesting for several people.

I will now roughly explain the concept and in the end show a realistic (current data) calculation, how this could look at a tax rate of 30%.

What makes the listed property so special?

The core idea behind an investment in a listed property is tax optimization, as the state has come up with a special depreciation allowance here. §7i EstG.

The interesting thing here is, since the whole thing is anchored in the legal code, it is not speculation, but provable facts. Since I am basically (see my technical analyses) a fan of clear and calculable data I find the whole super.

The depreciation of a listed property is on average 8.3% over 12 years. This means that you can depreciate the entire renovation portion of a listed property in 12 years.

This is about 70% +-5% of the purchase price, which varies mainly with the previous use of the object (I will always use our data because I can safely prove it).

This may sound very complicated for some - but it is actually not.

For example, if I buy a property worth 500,000 € with a renovation rate of 70%, I can write off 350,000 € of the purchase price over 12 years.

This means that I have an annual depreciation amount of 29,000€. This is then offset against your current tax rate. Means with a tax rate of 30% I get annually approx. 8.750€ from the tax again.

That's 730€ per month that Papa State reimburses me for my real estate investment, which of course varies depending on the tax rate.

Is this all understandable so far? If not feel free to ask questions in the comments.

So to the monument depreciation come then however also the points: Rental income, depreciation of interest, depreciation of the old building portion, depreciation underground parking, kitchen, etc..

In addition, listed properties are usually also qualified for low-interest KFW loans.

Of course, they do not reach the energy standard of a very energy-efficient new building (KFW 55 / KFW40).

However, our listed buildings and also most of the ones I know so far are at the regular new building standard KFW100.

I will now give you an example calculation that should make it clear why even very well selected existing properties will have a hard time generating a similarly high and, above all, similarly calculable return.

Calculation example on the basis of current figures:

Monument & old building - AfA

investment volume 500.000,00€

Renovation share 370.000,00€ (approx. 74%)

Old building share 100.000,00€ (approx. 20%)

--

Monument-AfA 30.500,00€ p.a. / average 8,3%

old building-AfA 2.500,00€ p.a. / average 2,5%

Advertising costs

Interest expenses 20.000,00€ p.a. (500.000,00€ x 4,0%)

(No KFW loan taken into account)

Income from V&V

Rental income 10.500,00€ p.a. (75m² x 12€ cold rent)

Total:

Monument & old building AfA 33.000,00€ p.a.

+ interest expenses 20.000,00€ p.a.

./. Rental income 10.500,00€ p.a.

Balanced
42.500,00€ p.a.

Tax rate 30%:
12.750,00€ p.a. / 1060€ mtl. / 153.000,00€ tax refund in 12y.

Tax rate 40%:
17.000,00€ p.a. / 1415€ mthly / 204.000,00€ tax refund in 12Y.

Debt service:

Interest and repayment 2.300,00€ mtl. (500.000,00€ x 5.5% interest and.

Repayment)

NK not apportionable 100,00€ mtl.

Rental income 900,00€ mtl.

Expenditure before tax 1.500,00€ mtl.

Tax refund (30%) 1.060,00€ mtl.

Expense after tax
450,00€ per month

Not considered

Depreciation fitted kitchen

depreciation parking space/TG

Real estate transfer tax/notary fees

KFW loan + repayment subsidy

Basically - as soon as the monument certificate is available from the authorities, the tax refund can be claimed either via the annual tax return or via a monthly allowance.

In addition, listed properties often hold their value particularly well because they are usually very beautiful/special objects. However, I do not want to include this in the calculation, as this is not the main goal of an investment in a listed property.

So that was a lot of numbers - but I think it is quite clear how well something like this can pay off, especially if you have a high tax rate. At 42%, you end up with about +-0 after tax expense.

In addition, this is all calculated without equity (outside the regular purchase costs (notary, land transfer tax), etc.).

Accordingly, I think it makes sense, especially as a high earner, to permanently buy at least one listed property, hold it for 12 years and then sell it tax-free. Then you buy a new one and the game starts all over again.

I hope you enjoyed this article and I could possibly inspire you a bit for the topic. I personally find it super useful to make use of real estate in addition to shares and crypto.

If you can then also include taxes in the asset accumulation, I find that top.

Questions gladly in the comments. Even if something was written unclear or too complex.

I wish you a great start to the week 😊

Your melon. I wish you good luck with your trading/investing.

#immobilie#ddenkmalimmobilie
#immobilien

Rent Fetish in Germany: An Indictment of the Second-Highest-Taxing EU Country

A contribution from the series "Germany on its way to becoming an emerging market".

Hello folks!

as determined in the last survey, today we won't talk about stocks or markets in the direct sense, but will look at Germany's situation in the current political cosmos. Before we start, as always, my disclaimer:

Disclaimer: This is not investment advice. It is also not a solicitation to buy and/or sell financial products. I only describe my opinion here. You have your own responsibility towards your investments. So I also assume no liability.

Let's start with some very nasty numbers:

• 50,5%

• 1.6 million

• 40% -50%

• 5

What are these numbers all about? Is it the probability that Schalke 04 will stay in the top flight? Or that Bayern will win the championship after all?

Unfortunately, no - the figures very well encompass the tenant situation in Germany. In 2021, 50.5% of households lived in a tenant relationship and did not acquire property via their monthly installments. This makes Germany the EU leader in one discipline! No other country had such a high proportion of renters in the year under review. Above all the crisis-stricken Spain, which looks on various problems like youth unemployment etc., has under a quarter of the population as tenants. Our neighbor's neighbor is just 24.2%. Conversely, that means 75.8% live in an ownership relationship. France is also significantly lower than Germany at 35.35%. Only Austria is reasonably within reach with 45.8%. For a long time, nothing seems to happen (see (1)).

The 1.6 million are particularly relevant in this context, because in a country with such a high share of renters, a simple dynamic should take effect, which I explain below and should lead to lower living costs. Yet, in 2022, there were just under 16% of households that spent 40% to as much as 50% of their NET income on rent. This means that households are considered to be "overburdened" and the problem is now worsening on an annual basis. If it was still 2021 every eighth household, it is now almost every 6th household that slips into the financing problem. Comparing this with the current rent burden of 27.8%, we arrive at a delta of almost double that affected households have to spend on rent. In particular, new leases from 2019 onwards stand out negatively, incurring almost 2.7% more in costs (see (1), (2)).

Why is this important?

The concept of "rent" only works under the following conditions (cf. (3), (4), among others):

• The own income is not sufficient to pay off the financing from redemption and interest in a reasonable time frame.
• The own income is sufficient, however, the real estate market is "overheated" and there is no net rental return > 5% with focus real estate investment
• The payment from rent + utilities results in a much lower cost factor, so it is invested in alternative asset classes (stocks, bonds, REITs, gold, etc..)
• It is an old building property that requires high maintenance reserves

These examples show us why it is not possible for some households to live in their own 4 walls. Referring to (4), we recognize various cost parameters in the statements:

• Repayment and loan interest
• Acquisition costs and rent
• Rent and savings reserve of the tenant
• Investment return
• Maintenance

If we add these parameters together for the home buyer, we get the following equation:

Real estate purchase burden = loan repayment + interest repayment + maintenance costs.

So why do so many people hesitate, who would have to show "only" 5 annual salaries for an average apartment? This value is, for example, compared to the Czech Republic with 11 (!) annual salaries less than half as large and burdensome for long-term asset accumulation?

There is a simple answer to this: Because sub-factors such as loan repayments and, since a few months ago, interest repayments have become immensely more expensive. If we took 2010 as the standard measure for real estate prices with 100 index points, real estate would be at 196 index points in 2022 (see (5), (6)).

What does this mean?

In 2021, the average apartment had 92.1 sqm of living space. For the sake of simplicity, let's assume that other rooms such as the area under a staircase or rooms for common use are not considered here for the time being. Thus, the apartment would cost today (see (6), (7), (8)):

92.1 QM * 3,372€ average price Q4 2022 = 310,561.20€ (!)

What would this apartment have cost in 2010? It's quite easy, since index:

92.1 QM * 3,372€ average price Q4 2022 * (100 index points 2010 / 196 index points 2022) = 310,561.20€ * 0.51 =. 158.386,22€

Yes but wage increase and inflation?

The problem with this immense growth factor of almost 2 is that salaries have not kept pace. While the net average salary in 2010 was 1,638€ per month, in 2021 it is 2,172€ calculated without children in tax class 1. The related burden of the salary was 31.8% in 2010 and 32.2% in 2021 (see (11)). Accordingly, on average an increase in salary by:

534€ made possible. Calculated on the original salary of 1,638€ per month, these are:

32.6% more, which is opposed to the 96% more for the purchase of real estate.

So we quickly notice that the payment via average salary of real estate has increased by a factor of 96/33 = 2.9 to the detriment of the salary. This means that the loan repayment has increased by this factor. I summarize therefore for the loan repayment as follows:

• Near doubling of the price of existing real estate.
• No tax relief due to the taxes relevant for the salary
• No complete compensation of the real estate price development by salary increases
• Constancy in the tenant share greater than 50%

Yes, read correctly. Surprisingly, the breakdown by tenants and owners nevertheless remains remarkably constant (see (9)).

In addition to existing real estate, building your own property can also be an interesting way to start owning your own home. Contrary to the existing real estate, the adaptation of all rooms and areas according to one's own ideas is the greatest individual advantage here - no frills, no major deviations from one's own expectations due to temporally different ideas. Selected examples based on old buildings for this are (cf. among others (14)):

• high ceilings
• rotten stairs due to outdated material
• asbestos in the exterior walls
• Oil heating systems
• No insulation of the roof
• Simple glazing of windows

The very factor around asbestos is exemplary exciting for the divergence in the ideas addressed. Asbestos found its way into the construction of new properties from 1930 onwards and was highly valued, in particular, for its chemical resistance, tolerance of greater heat in the house itself and, despite this, its poor flammability. Thus, real estate investors who are interested in old buildings, may get acquainted with the past. In the past, asbestos was also used in car brake linings because of its robustness (see (14)).

Today this is judged quite differently. Personally, it reminds me of a shiny bling-bling solution that turned out to be less advantageous in retrospect. For I can also understand every strength as a weakness. Asbestos owes its mentioned robustness mainly to its structure - unsurprisingly. Everyone knows the yellow fiber-like blocks with a diameter of up to 2 micrometers. Few people, however, know that because of this fibrousness, asbestos can theoretically pose a great danger to people who are surrounded by it. It is quite easy to understand: since we are talking about 1/1000 millimeter of fibrous matter, inhalation of these fibers is possible - so what? Why important (cf. Ibid.)?

What goes in should come out at some point. This is difficult with asbestos - possibly the inhaled particles remain in the lungs, which can irritate the corresponding tissue in the long term. Asbestos thus acquired the unflattering fame of a disease named after it as early as 1936 - the Asbestosis.

Why is this important for investors?

If the decision is made not to build a house or to rent, disillusionment quickly sets in - even though prices on the real estate market are falling, they are still at a record level, as explained above. The inflation parallel remains high, so that many - straight young families - may struggle compulsorily with old building real estates. The issue of asbestos disposal then quickly becomes a significant cost driver.

Yes, but surely that's only important for your old 1930s apartments and houses?

No - the answer is no. Asbestos has only been banned since 1993. We are currently living in 2023 (at least in terms of the calendar year). As a result, as soon as homes from the 70s, 80s, and in some cases even as late as the 90s are reverted to, the specter of asbestos wanders. Often just that is with not being present an exposé or the inspection of old building real estates without brokers etc. a danger. Not every possibly aged owner has a financial interest to have an expert confirm the presence of asbestos in the house, which a) costs money and b) possibly negatively affects the value of the property. This is because the removal of asbestos is always associated with professional disposal. Asbestos knows thereby many forms such as sewage pipes, the named insulations and also Eternitplatten. A rough 0815 thumb value are thereby approx. 30 € minimum up to 45€ per QM (see (15), (16)).

Means: Either the price for the property must therefore fall OR an expert must dispose of this professionally. This can very quickly become quite expensive and on a par with the ancillary purchase costs that are due for this property. A simple example will show where the costs come from. We use cost drivers - costs in € (see (15), (16), (17)):

Transport of the MA & equipment to the old building property

-depending on the distance 50€-150€

Rent and erection of the scaffolding,

(so that the MA get to the roof e.g.)

-depending on the scaffolding approx. 1.000€ - 1.200€

Removal of the asbestos plates via Manpower

-roof area 150 QM * 35€/QM (we assume 150 QM for this)

Disposal of approx. 12 tons of hazardous waste

-150€ cost lump sum * 12 tons

Drainage of the roof

-1.000€

Re-attachment of the insulation

-approx. 10.000€ (depending on div. factors)

Installation of slates

-60€ per QM * 150 QM roof area

Personnel costs

-4-5 days workload with approx. 3 VZ MA

You can see quite quickly why especially old building properties may not be worthwhile. In this simple example with large fluctuation interval we are at ADDITIONAL costs of:

Minimum: 28.100€ + 4 days personnel costs

Maximum: 28.400€ + 5 days personnel costs

Thus very often the dream of the old building real estate shatters for young families, which do not want to tie this additional cost factor plus a possible disadvantage with the resale because of age of the real estate to the leg.

What does the state do?

E.g. heat pumps demand, promotion sums via "climatic-friendly new building" announce, which will be already empty in June this yearly and with the purchase additional expenses tidy zulangen (Cf. (17), (18)).

The ancillary costs ALWAYS consist of the following components, among others (cf. (19), (20):

• Costs for the notary
• Costs for registration in the land register
• Real estate transfer tax

Yes, there are other parameters, but just these three are incurred. The land transfer tax is the one that the government is most likely to be able to adjust. Currently, there are large ranges to be seen here. I'll give you some examples:

• Bavaria with 3.5% land transfer tax
• Hamburg with 4.5% land transfer tax
• Thuringia with 6.5% real estate transfer tax

Notary and land registry fees are reasonably similar throughout Germany at approximately 2%. The optional, but frequently occurring brokerage fees are at a maximum of 3.57%. As a result, there is quite a wide range via the aforementioned federal states of:

• Bavaria at 9.07% total ancillary purchase costs
• Hamburg with 10,07% total purchase additional costs
• Thuringia at 12.07% total additional purchase costs

Of course we know that especially in many Bavarian areas (cough Munich cough) the prices are currently very high. Nevertheless, a difference of 12.07% - 9.07% = 3% can make a lot of difference for a standard property of 310,561.20€. In comparison, that would be approx:

310.561,20€ * 12,07% = 37.484,74€

Respectively

310.561,20 * 9,07% = 28.167,90€

So a delta of: 9.316,84€

Especially for families with low income this amount can mean an enormous relief.

If this was too much practical real estate discussion for you, please have a look at my new real estate video about the REITS Realty Income, Gladstone Commercial and the Longfor Group from Hong Kong! Created from a community wish - make a wish :D

https://youtu.be/dI5S-QArzv8

How do you see it? Are you team owners or team tenants? I know this is a sensitive topic. Often the factions are Tenant4Life and the PropertyHoodbros are difficult to get on top of each other. I just ask you to remain respectful in the comments - as always just :)

Thanks and see you next time! I look forward to your constructive feedback! :)

Your Bass-T

Sources

(1) https://www.destatis.de/Europa/DE/Thema/Bevoelkerung-Arbeit-Soziales/Soziales-Lebensbedingungen/Mieteranteil.html

(2) https://www.haufe.de/immobilien/entwicklung-vermarktung/marktanalysen/wohnkostenbelastung-in-deutschland-miete-versus-einkommen_84324_521164.html

(3) https://www.businessinsider.de/wirtschaft/immobilien-paradox-warum-deutschland-ein-land-der-mieter-ist-2019-7/

(4) https://zendepot.de/kaufen-oder-mieten/

(5) https://www.finanztip.de/baufinanzierung/mieten-oder-kaufen/

(6) https://de.statista.com/statistik/daten/studie/244262/umfrage/immobilienpreisindex-fuer-eigenheime-in-deutschland/

(7) https://www.umweltbundesamt.de/daten/private-haushalte-konsum/wohnen/wohnflaeche

(8) https://de.statista.com/statistik/daten/studie/554954/umfrage/kaufpreise-fuer-eigentumswohnungen-aller-baujahre-in-deutschland/

(9) https://de.statista.com/statistik/daten/studie/237719/umfrage/verteilung-der-haushalte-in-deutschland-nach-miete-und-eigentum/

(10) https://de.statista.com/statistik/daten/studie/39044/umfrage/monatlicher-verdienst-in-deutschland-seit-2000/

(11) https://www.sozialpolitik-aktuell.de/files/sozialpolitik-aktuell/_Politikfelder/Finanzierung/Datensammlung/PDF-Dateien/tabII7.pdf

(12) https://www.interhyp.de/ratgeber/was-muss-ich-wissen/zinsen/zins-charts/

(13) https://www.finanztip.de/baufinanzierung/hypothekenzinsen/

(14) https://www.umweltbundesamt.de/themen/gesundheit/umwelteinfluesse-auf-den-menschen/chemische-stoffe/asbest

(15) https://wohnglueck.de/artikel/asbest-entsorgen-73149

(16) https://www.listando.de/p/was-kostet-eine-asbestbeseitigung/

(17) https://www.borchers-asbestkiller.de/haeufige-fragen

(18) https://www.co2online.de/modernisieren-und-bauen/waermepumpe/

(19) https://www.morgenpost.de/wirtschaft/article237984801/klimafreundlicher-neubau-geld-foerderung-wird-knapp-kfn.html

(20) https://ratgeber.immowelt.de/a/nebenkosten-beim-hauskauf-oder-hausbau.html#c41785

#immobilien
#immobilie
#reit
#sanierung
#hauskauf
#dividends
#gladstone
#realtyincome
#longforgroup

Investment strategy Ü65 - Your help

Moin dear #community,

for some time I have been concerned with the investments of my father (65), who will retire next year.

According to his generation, he has without a clear strategy a wild portfolio of #einzelaktien and very expensive #fonds of all kinds heaped together on the recommendation of third parties. We have sold a part of it in the last months, so that now we have #cash in the amount of approx. 100k has become free.💸

Since I am not at all familiar with investment strategies in this age bracket, I wanted to ask for your input.

As a retiree, how would you invest the freed up cash?

My thoughts on different classes are as follows:

• Stocks/#etf: Possibly currently overheated and at his age you have to consider the holding period. But a part could perhaps be put into a distributing ETF or individual #dividendenaktie give (?)
• #anleihen: Don't know much about this, but could be relevant as we sold the expensive blend funds and he no longer has lower risk bonds in the portfolio. With more rate hikes expected, bonds could go down further. Maybe a bond ETF savings plan (?) is worthwhile.
• Time Deposit (6-12 months): The only recommendation I could give him in good conscience
• Other #immobilie: Don't think he wants to go through the stress again in his old age....

PS on his current investment portfolio : With home and two apartments, most of the assets are in real estate. 50-70k are currently invested in individual stocks/stock ETF, the rest is - as mentioned - cash.

Looking forward to your input! <3

#strategy
#rentner
#help

Topic Buy or Rent!

It is always discussed hotly 🔥 and with emotion. There is probably no one right way. It is also a bit of a personal lifestyle decision.

Here are the latest insights from Gerd Kommer on this topic. Unfortunately, we cannot predict how it will develop in the future🔮.

Gerd Kommer has determined by comparing the average annual returns of residential real estate between 1970 and 2020 with those of stocks and bonds. Anyone who bought their own home in the 1980s or 1990s is on average worse off financially today than if they had continued to live in rented accommodation and invested on the side.

With the new millennials, the wind has changed, his calculations show. The average home buyer would have made a better deal than a renter both between 2000 and 2020 and between 2010 and 2020.

Source: Gerd Kommer: Buy or Rent. 2021, S77

Own opinion:

Nowadays, investing in the stock market is a lot easier and more accessible than it was in the 1980s and 1990s. Therefore, I think that for many people it was almost without alternative to invest their money in real estate at that time. Also, financial education was not as good as it is today.

Who has bought from the 2000s, has certainly made a good investment.

And in own thing still. It is simply good to know that no one can terminate the apartment/house because of own need. This security is worth a lot. Especially in big cities where there is a massive housing shortage.

Kind regards

Stock market bear 🐻

#immobilie
#immobilien
#kaufen
#mieten

[Real Estate] Does anyone know of a site/company where individuals may join with others to purchase apartments and rent them out.

We are looking for interested parties who would like to enter the real estate market, but do not have the "necessary" money to buy an apartment at the first go, to afford credit, etc. and to acquire it as a "community".

Please don't stone us, we are just interested and would like to get some information or more. Thank you guys. LG #immobilien
#immobilie

Yesterday was shopping announced!

Position doubled to 8pcs.

#mcdonalds

#immobilien

#immobilie

Good morning,

Real estate or shares? Equity or debt capital?

I would like to hear your opinion.

I looked at a house 3 weeks ago and am in talks with the owner.

The house costs between €500,000 and €525,000. We are still in negotiations. It really is in very good condition. Nevertheless, I don't want to agree to the €525,000 directly.

With all the ancillary costs and renovation work, I'm looking at €600,000 - €610,000.

My family will give me €365,000.

I have €32,000 in my custody account with my broker.

I will currently receive a loan with interest of 3.6 - 3.8 %.

My share portfolio is still a little bit close to my heart... Even though I'm totally in favor of the house (location, rooms, energy status, etc.), it's still a good investment. Top.

Thank you in advance for your opinion/tips/evaluation.

Kind regards

Holl

#eigenheim
#eigentkapital
#fremdkapital
#immobilie

Hello everyone,

I invest in three different ETFs every month, set aside additional money to buy individual shares and build up a nest egg of around 6 months' salary.

I would like to buy a property in about 4-7 years or possibly build a house myself.

I would be interested to know how you would plan financially during this time. Would you simply save your own capital, take out a building society savings contract or possibly (partially) liquidate the deposit, etc.? #immobilie
#etfs
#savingstips

Greetings

Moritz

Are there more real estate sharks here?

What do you think of the current market situation?

How do you proceed?

For me, everything is lying fallow until I get to a combined interest rate of under 3%.

What does your crystal ball say for the next few months? I say after Easter we will slowly get to 3.0.

I have to say that I only build new until my curve is exhausted.

Building kfw40 kfn at approx. 2200€/m2.

kfw is always increasing, it's just madness.

🏠

#immo
#immos
#immobilie
#immobilien

#100k!

"The first 100.000€ are the hardest".

My assets in #aktien and #kryptowährungen has a value of about 60.000€.

In addition, the value of my first #immobilie minus the #fremdkapital.

#details for this you will find in one of my last #posts to #meine1immobilie.

#einfachmehrvomleben
#invest
#investor
#strategy
#update
#100000
#aktie
#kryptowährung
#krypto
#retire
#retirement
#fire
#passiv
#love
#passion
#community
#aktientipps
#party
#wow
#depot
#motivation
#money