Get rich with real estate

I'll show you what you need to consider when buying real estate.

• How much equity do you need to bring with you?
• What interest rates can you expect?
• How much property can you actually afford?

"Fixed interest rate, residual debt, loan-to-value ratio, repayment, ancillary costs, provisions, notary, estate agent, cash flow, tax advantage" - are these all still new to you?

Here is a simple example

Max Muster, married, family dad with two small children, would like to invest in real estate for himself and his family. His wife also works and contributes to the household. He would prefer a house with a garden so that the children can play outside and, of course, something of his own, as he wants to save on rent. Up to this point, everything has been okay, but unfortunately the calculation is too short-sighted. If you want to invest in real estate, you should of course also take advantage of the benefits. An owner-occupied property offers less than a rented one.

If Max buys an apartment and rents it out, he can deduct some things from his taxes, e.g. the interest, repairs and renovation costs. The tenant even repays part of the loan.

What does he need to bring with him? That's right, capital - at least the money for the ancillary purchase costs. You can roughly calculate 10% of the purchase price as incidental costs (for estate agent, land transfer tax, notary and land registry). Once he has paid the ancillary costs, he receives the sum for the purchase and his personal interest rate for the loan, depending on the bank, personal creditworthiness and income.

Sample calculation: Sample city, 1-Room Apartment, 25qm

Purchase price	160.000€
Real estate transfer tax (5%)	8.000€
Notary and land registry costs (1,5%)	2.400€
Broker commission	5.712€
Total ancillary costs	16.112€

This means that Max now only needs to have €16,112 in capital to buy an apartment. Not everyone may have such a sum in their account, but it is definitely achievable. If you don't want to save €16,112 right now, you can fall back on solutions that make saving easier. For example, a building society savings contract offers the option of only having to save 40% or 50% of the required capital, with the second half being paid out as a loan.

All Max needs now is a bank that is willing to take on the financing. It's best if he doesn't just apply to one bank, but to several at the same time. This is because each bank has different processing times, requirements for the necessary documents, interest rates, terms and other differences.

If everything fits now - apartment in the desired location, reasonable purchase price, capital available for ancillary costs, realistic rental income, a bank for financing, good interest rate - then you can get started.

This is where it gets really interesting. It's nice that the tenant pays off the loan, even if only in part, and some of it can be deducted from tax, but why is everyone talking about investment properties? Quite simply, properties increase in value depending on their location and the repayment of the loan frees up capital and the property can be mortgaged after a few years. In other words, the property can be pledged as collateral for another loan to buy another property without having to put up your own capital again.

After 10 years, you can sell such a property tax-free.

You want to know more?

Then I'll use your own example to show you what you can actually afford and how you can become a real estate investor.