How to Calculate the Return of Your Rental Property in Germany | Investing in Real Estate in Germany
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- čas přidán 19. 06. 2024
- How do you calculate the return of your rental property when investing in Real Estate in Germany? 🤔
Axel will PerFinExplain you in this video exactly how profitable your Real Estate investment will be by factoring in ALL financials like taxes, loan amount, interest rate, rental income, personal tax rate, property insurance, etc.
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00:00 Intro
00:15 Summing Up All Property Costs
00:35 Summing Up All Property Incomes
01:10 Calculating All Costs & Income
01:35 Real Estate Taxes
02:26 Monthly Cash Flow Of The Rental Property
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Great video. Thanks for explaining everything in details. 👍
Thanks for watching!
Great video Alex, thanks a lot!
Thanks a lot for watching!
Great channel! My question is whether the loan can be secured by the apartment or house that will be rented in Germany? I mean that is, whether the income from this property can be taken into account for obtaining a loan?
Your videos are a gold mine, thanks for creating the valuable content. Is there an online calculator for Germany to calculate what you showed. If not, I will be interested to create one in my free time. You could use it as well if you like on your website.
Is this calculator something that you are looking for? perfinex.de/calculator/real-estate-loan-calculator/
You can also check out the Deal Analyzer of Lendlord (czcams.com/video/x_8qsRSL1n4/video.html).
We would also be very happy to try your calculator if you decide to create one.
Hey Axel....... First!
If you lowered the principal repayment rate from 2% to 1% the apartment would be profitable. However you'd run the risk of having a lot more principal left at the end of your fixed term.
Here comes the question:
For the example you gave, would you advise someone to go for the 1% repayment rate if the fixed term was 20 years? The pros I can see are that your loan-to-value ratio would hopefully have improved over the 20years when it comes time to refinance. Additionally, inflation would have eaten away at the real value of the remaining principal. Any major cons to this strategy?
Great video, very helpful to see some of the details clearly laid out with an example. I'm enjoying the whole series.
Hi Chris,
Paying just 1% or 0,5% principal per year was how a lot of German Real Estate investors managed to have a positive cash flow. Since the start of the pandemic banks started demanding at least 2%, sometimes even 2,5% principal repayment.
You are absolutely right with the strategy you propose in your comment. With the current interest rates being that low it is advisable for many investors to pay back as little as possible to leverage to the maximum.
/Axel
Hello Axel, I had a small doubt, shouldnt the Depreciation be 2% of 232,000? As then it comes up to be 4640, please correct me if I am wrong
Ok, If I want to buy the property without loan with the same price, how much money would it produce? Thx.
Hey Axel, there is something that I don't quite understand. If that client pays 2% Tilgung with no downpayment, that means it would take 50 years for he/she to pay the property in full, right? In several of your videos, you have said we can sell properties tax free in 10 years as an investor, though. So what happens exactly if I want to sell, but haven't payed for everything yet? Would you recommend that at all or should we strive to pay all before selling?
You're right, if you have a loan with 2% principal (Tilgung), it would take approximately 30 years to pay off the mortgage in full (not 50 years because your principal increases over time with your interest payment decreasing in the standard mortgage).
When you sell the property as an investor, you can do so tax-free after 10 years. So if you sell the property before it's fully paid off, you have a special termination right of your mortgage (eg 300k€ property sale - 100k€ mortgage left = 200k€ for you).
Should you sell a property after 10 years or pay off the mortgage in full and keep the property? 🤔
That depends on the exact investment case and the financial goals of the real estate investor.
Great Video! thank you so much Axel!
I just have a question, isn't the Property management also called Hausgeld? as far as I understand there's a Hausgeld on apartments to be paid monthly, and it's approximately 300 EUR, in your example 300 EUR should be deducted from the Monthly cold rent, not 300 EUR per year.... please correct me if I'm wrong?
Also something else, if after this calculation you don't make a tax loss, then you pay to the Finanzamt, right?
Hausgeld is a pot of miscellaneous costs that vary from property to property. 300€/month would be quite a lot for a real estate investor because most of the Hausgeld can be paid by the tenant.
You are right with your tax question. Every property investor needs to decide whether he wants a tax loss or cash flow. There is not right or wrong, it depends on the strategy of the individual investor.
@@PerFinEx Thanks for the video, amazing!
I would like to follow-up on this question because I also see the normal Hausgeld at @250 to 300eur per month. In your example your put 300eur per year. This completely changes the cashflow analysis, so could you please clarify?
The Hausgeld you are referring to is the Hausgeld the tenant has to pay. The property owner has to pay very little of that himself (not all according to German law). That's the difference you mention.
@@PerFinEx Among properties that I visited the landlord's share of Hausgeld (called nicht umlagefähige Nebenkosten) for an apartment in that price range would be around 100€ monthly. But I think Axel is referring to a small recently built flat (with little building maintenance costs) in an expensive area.
@@PerFinEx I hope you make a video about "tax loss or cash flow" one day. For me the only imaginable way is that the landlord receives the rent in his bank and pays his share of Hausgeld. In the next year, he mentions all income and expenses in the tax declaration. Finanzamt calculates his actual rental income after all deductions and asks for tax payment.
So total interest 3.4%, till when these conditions will remain same 20 , 30 years???? , I think I can b Mieter myself? Right , u haven't mentioned heart of this... Steuerberater kosten to keep your payment to 40 euros, what do u think 20 years would b sufficient or this would go to 30 years??? What I have to do to get rid with all of this in 10 to 15 years at max?????
Is systematic widthdrawal plan available in Germany?
Sure it is when it comes to investment (accounts). Are you asking about a systematic withdrawal plan when it comes to investing in Real Estate?
Hello Axel, watching this video makes me wonder if the offer I got for an apartment + deep garage that costs 210k with 850 rental monthly is a good deal or not
are there other factors I should look into when deciding if it's a good deal or not ?
You are right. There are a lot of factors influencing the decision if a property is a good deal or not. It's the property itself + the financing you get for this specific property + your personal financial situation. If those 3 things are aligned, you have all signs for a successful investment.
Can someome find a halal/Islamic bank with similar interest rates in Germany?