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Real Estate As An Investment

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Real Estate As An Investment. Young people often think about the future and hesitate about having plans and dreams. Maybe you are also thinking about where your professional path should go and how you can create a great life with family, travel, hobbies and more. If you enjoy making plans, you should also think about the distant future.

Provision Is Particularly Important For Young People

As we all know from the world, the most frightening topic is poverty in old age. Millions of people in this country get into financial problems as soon as they have reached retirement age. A situation that can affect anyone, including you after a long professional life and what we try to say is; private provision is essential. So you are actively investing in your future and can look forward to a quiet and financially secure old age. But what are suitable products with which you can provide in the course of your life? Insurance companies mainly offer some classics. These are life insurances or supplementary pensions; banks also offer you savings plans. You are undoubtedly familiar with the traditional home loan and savings contract and similar forms of investment. However, all of these forms of retirement provision have disadvantages that young people are not aware of.

Known Problems With Traditional Systems

The financial industry changes over the years. This creates problems for forms of investment such as supplementary pensions or building society contracts that were not in effect a few decades ago. There are three problems in particular:

1. Low returns

We have been in a phase of low-interest rates for years. Banks and credit institutions only pay interest on your invested money with a very low-interest rate. This applies to overnight money and fixed-term deposits, as well as to classic life insurance and similar pension products. Of course, there are very high-risk products on the financial market that, if successful, offer you a great return. But it would help if you didn’t take ever more significant risks for your retirement planning.

2. Loss from inflation

Our money slowly but surely loses value over the years. In recent years, the rate of price increases has been between 1.0 and 2.0 per cent per year. Unfortunately, this also applies to the contributions paid into an insurance product and the purchasing power that your life insurance or supplementary pension will offer you in a few decades.

3. Taxation

As if the value of your retirement provision weren’t reducing enough due to inflation, the state still earns money with many products. The interest that you earn while investing is taxed. And this in times when the interest rates themselves are no longer high.

BUILDING WEALTH WITH REAL ESTATE

Property as a sensible financial provision

In addition to all of the products above for old-age provision, there is an alternative with which you do not have to fear the disadvantages and problems mentioned.

A property is meant as an investment, often also called an investment property. So you buy a house or a condominium that is protected as a real asset from all currency fluctuations and similar crises.

Of course, you want the property you buy to be profitable over the next few years. It could be possible if you decide to rent. For example, you buy a condominium and rent it out immediately. With the rental income, you will quickly repay the monthly loan instalment. You will also quickly make a monthly profit with expenses relating to your property.

After a few years, you can think about how you want to deal with your property. Maybe you sell them and get an attractive profit in one fell swoop. Or you would like to live in your financed property yourself, and so you can spend your retirement years without expensive rent payments.

Competition or addition to the classic system?

Of course, you do not have to terminate all existing pension contracts if you decide on an investment property. Many experts advise citizens to use a diverse strategy when it comes to provision and investment. Nevertheless, it becomes clear that investing in real estate offers many substantial advantages that are likely to remain in the same place over the next few years and decades. If you have already done something for your retirement provision in old age, you should see investment property as a contemporary addition. It is advisable to start with preventive care early in life. Especially in the case of real estate as an investment, this offers you a return before you reach the statutory retirement age.

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