That’s an amazing achievement—what you’ve built up there! I also find it really exciting to see how you’ve invested and what you’ve built up over the years.🙏🏼
You really should do a post on real estate—maybe something for absolute beginners: How do you get started, what should you look out for, and what’s the world of real estate investing really like?
Precisely because you already have so much experience, I’d find that super interesting. I’m only 30 myself and would really like to invest in real estate at some point. However, there’s so much conflicting information on YouTube and in countless blogs that it’s often hard to tell what’s actually reliable and what isn’t.
That’s why it would be really exciting to get the perspective of someone who’s already gained a lot of experience and is truly authentic and active in this game.🤟🏽💪🏼
You really should do a post on real estate—maybe something for absolute beginners: How do you get started, what should you look out for, and what’s the world of real estate investing really like?
Precisely because you already have so much experience, I’d find that super interesting. I’m only 30 myself and would really like to invest in real estate at some point. However, there’s so much conflicting information on YouTube and in countless blogs that it’s often hard to tell what’s actually reliable and what isn’t.
That’s why it would be really exciting to get the perspective of someone who’s already gained a lot of experience and is truly authentic and active in this game.🤟🏽💪🏼
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@TwoFace Thanks for the detailed answer. 🙂
Regarding a real estate post or series: I’m not sure if I’ll bore people—it seems to me that the community here is more focused on securities and views real estate as a bit of an “exotic asset.”
There are an enormous number of aspects to real estate, and unfortunately, there are always people online promoting real estate and promising quick profits. In my view, real estate is a true “long game”—so you need a lot of patience and perseverance.
As for investing in real estate at 30 and “sometime” 😉: You can start learning about it now, even if you don’t plan to get started for a few years. As a first step, I’d calculate how much you spend annually on base rent for your apartment and research what a comparable apartment in your area costs per square meter as a purchase. Of course, not in new construction (way too expensive), but a similar apartment in similar condition and of the same size. If you’re handy, you can also specifically look for a vacant apartment in need of renovation. Given the current market conditions, I’d deduct 10% from the asking prices in listings and offer a correspondingly lower amount after a viewing (this should, of course, be justified so as not to immediately upset the other party).
Interest rates (for construction and real estate loans) are rising again right now, but this also strengthens your negotiating position with sellers. I currently estimate a monthly payment of about 4.2% + 1.5% principal repayment = 5.7% of the loan amount. Banks generally require at least 20% of the purchase price as down payment, plus the closing costs (though there are exceptions, of course).
I wish you the best of luck! 🙂
Regarding a real estate post or series: I’m not sure if I’ll bore people—it seems to me that the community here is more focused on securities and views real estate as a bit of an “exotic asset.”
There are an enormous number of aspects to real estate, and unfortunately, there are always people online promoting real estate and promising quick profits. In my view, real estate is a true “long game”—so you need a lot of patience and perseverance.
As for investing in real estate at 30 and “sometime” 😉: You can start learning about it now, even if you don’t plan to get started for a few years. As a first step, I’d calculate how much you spend annually on base rent for your apartment and research what a comparable apartment in your area costs per square meter as a purchase. Of course, not in new construction (way too expensive), but a similar apartment in similar condition and of the same size. If you’re handy, you can also specifically look for a vacant apartment in need of renovation. Given the current market conditions, I’d deduct 10% from the asking prices in listings and offer a correspondingly lower amount after a viewing (this should, of course, be justified so as not to immediately upset the other party).
Interest rates (for construction and real estate loans) are rising again right now, but this also strengthens your negotiating position with sellers. I currently estimate a monthly payment of about 4.2% + 1.5% principal repayment = 5.7% of the loan amount. Banks generally require at least 20% of the purchase price as down payment, plus the closing costs (though there are exceptions, of course).
I wish you the best of luck! 🙂
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•First of all, thank you for your detailed answer and input—I really appreciate it.
Yes, I’ve been looking into real estate a bit more closely for just under half a year now. I’ve watched a few YouTube videos from Immocation, bought one of their books, and then checked out even more videos and content on the topic. The basic principle is actually relatively simple, and I’ve definitely got the hang of it.
The thing is: I live in Cologne, and here, of course, real estate prices are very high because demand is correspondingly high. And to be honest: As you already mentioned, with the principal payments and interest rates currently at about 5.7%, it’s usually difficult to buy a property that pays for itself right away. Usually, you try to develop the property in the right direction over the next one to two years so that, in the best-case scenario, it eventually becomes cash flow positive.
But what I’ve noticed so far in my apartment search is exactly that problem. If you look at classified ads, ImmoScout, or ohne-Makler.de, you’ll find so-called “deals” time and again, but they’re usually still way too expensive. Especially here in Cologne, I get the feeling that some sellers are asking for very high prices, which means you end up with a pretty negative cash flow.
When you then try to negotiate the price down by 10 or 15%—which in some cases wouldn’t even be enough to at least break even—it usually gets difficult. It feels like you’d have to buy for nearly 20% below the asking price in some cases for the numbers to really add up. The only problem is that sellers usually don’t accept such offers because there’s always someone else willing to pay the inflated purchase price.
That’s exactly what I’ve experienced during my viewings so far. I’ve visited quite a few apartments and, in each case, quoted what I considered a realistic purchase price. In some cases, that would have left me slightly in the red cash-flow-wise, but I would at least have seen the potential to develop the property in the right direction.
In the end, though, there was usually someone who outbid me and paid even more.
And that’s exactly where I’m currently trying to figure out how to take the next step: I need to find a way to acquire properties where there’s perhaps significantly less competition among buyers, giving me the chance to buy at a price that actually works out in the end.
That’s where my thoughts are stuck right now 😅
Yes, I’ve been looking into real estate a bit more closely for just under half a year now. I’ve watched a few YouTube videos from Immocation, bought one of their books, and then checked out even more videos and content on the topic. The basic principle is actually relatively simple, and I’ve definitely got the hang of it.
The thing is: I live in Cologne, and here, of course, real estate prices are very high because demand is correspondingly high. And to be honest: As you already mentioned, with the principal payments and interest rates currently at about 5.7%, it’s usually difficult to buy a property that pays for itself right away. Usually, you try to develop the property in the right direction over the next one to two years so that, in the best-case scenario, it eventually becomes cash flow positive.
But what I’ve noticed so far in my apartment search is exactly that problem. If you look at classified ads, ImmoScout, or ohne-Makler.de, you’ll find so-called “deals” time and again, but they’re usually still way too expensive. Especially here in Cologne, I get the feeling that some sellers are asking for very high prices, which means you end up with a pretty negative cash flow.
When you then try to negotiate the price down by 10 or 15%—which in some cases wouldn’t even be enough to at least break even—it usually gets difficult. It feels like you’d have to buy for nearly 20% below the asking price in some cases for the numbers to really add up. The only problem is that sellers usually don’t accept such offers because there’s always someone else willing to pay the inflated purchase price.
That’s exactly what I’ve experienced during my viewings so far. I’ve visited quite a few apartments and, in each case, quoted what I considered a realistic purchase price. In some cases, that would have left me slightly in the red cash-flow-wise, but I would at least have seen the potential to develop the property in the right direction.
In the end, though, there was usually someone who outbid me and paid even more.
And that’s exactly where I’m currently trying to figure out how to take the next step: I need to find a way to acquire properties where there’s perhaps significantly less competition among buyers, giving me the chance to buy at a price that actually works out in the end.
That’s where my thoughts are stuck right now 😅
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•@TwoFace Hmm. Cologne probably isn’t the easiest place to navigate (though I don’t know the Cologne real estate market in detail). But the approach with the videos and the book is definitely the right one, because being informed is extremely important here.
If you’re buying to rent out, you could, of course, look at a different location where the purchase price relative to rent is more favorable. But I don’t fully share the Immocation guys’ view that you can—or should—choose your investment location completely freely. It’s simply much more practical to be on-site so you can check on things if problems arise. Even when renovating or finding new tenants, it’s just impractical and inefficient if the apartment or house is 600 km away.
You might be able to increase the return on your investment by buying an apartment that’s suitable for shared living. Renting out individual rooms—for example, to students—can generate higher income than renting out a regular apartment (though it’s obviously much more of a hassle due to frequent tenant turnover). We have a student housing building consisting entirely of shared apartments—it’s a good investment, but it’s also a bit of a “hive of activity.”
It’s probably not suitable as a starter project, but another approach would be to go all out—namely, buying an apartment building right off the bat. At least here in Leipzig, prices per square meter for houses are currently significantly lower than for apartments. However, that would be very ambitious for a first project, so I wouldn’t recommend it.
If you’re buying to rent out, you could, of course, look at a different location where the purchase price relative to rent is more favorable. But I don’t fully share the Immocation guys’ view that you can—or should—choose your investment location completely freely. It’s simply much more practical to be on-site so you can check on things if problems arise. Even when renovating or finding new tenants, it’s just impractical and inefficient if the apartment or house is 600 km away.
You might be able to increase the return on your investment by buying an apartment that’s suitable for shared living. Renting out individual rooms—for example, to students—can generate higher income than renting out a regular apartment (though it’s obviously much more of a hassle due to frequent tenant turnover). We have a student housing building consisting entirely of shared apartments—it’s a good investment, but it’s also a bit of a “hive of activity.”
It’s probably not suitable as a starter project, but another approach would be to go all out—namely, buying an apartment building right off the bat. At least here in Leipzig, prices per square meter for houses are currently significantly lower than for apartments. However, that would be very ambitious for a first project, so I wouldn’t recommend it.
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•Yes, since purchase prices here are pretty high compared to rent, I initially focused on apartment buildings as well. There was actually something interesting there at one point, but unfortunately it was snapped up quickly because I was a little too slow.
I’ll have to take a look. Otherwise, I might expand the location or the search radius a bit and see what other interesting opportunities come up.
But in any case, thanks for sharing this information!
I’ll have to take a look. Otherwise, I might expand the location or the search radius a bit and see what other interesting opportunities come up.
But in any case, thanks for sharing this information!
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