Real Estate Investment: Five Criteria For Choosing Your Real Estate Investment. Real estate – also known as “concrete gold” – is a popular alternative. They attract with attributes like security and lasting value. Due to the low-interest rates, loans from the bank can be taken out on very favourable terms to buy houses or residential property.
However, it doesn’t necessarily have to be your own home: stocks, bonds, funds and crowd-investing platforms are also a way of entering the real estate market. As great as the chances are, the pitfalls are just as significant—a guide through the jungle of real estate investments. Here, there are five criteria for you to choose your real estate investment!
“Do not put your all eggs in only one basket!” |THE RISK DISTRIBUTION IS THE MOST IMPORTANT OF ALL.
“Don’t put it all on one card” is one of the essential strategies you can use to minimize the risk of losing your money investing. If you put all your capital into just one project, there is a so-called “lump risk” – if the basket falls to the ground, all the eggs will be broken. It is therefore essential to avoid such a cluster risk when choosing real estate investments and to pay attention to risk diversification.
50 or 5,000 euros? Pay attention to the minimum investment.
Which real estate investment you decide on usually also depends on how much capital you have available. Less than € 50 is enough to participate in a crowd-investing project, at least € 5,000 is required to enter a closed real estate fund – and when buying a house, you usually have to raise all of your savings and also take out a loan.
What is gone first? | STRONG CAPITAL COMMITMENT MAKES YOU INFLEXIBLE
It would help if you thought attentively about how long you can go without your money because investments have different terms – i.e. different periods before the money is paid back.
Avoidance is cool! | MINIMIZE COSTS AND EFFORT
Pay money and put your feet up? Most of the time, the investment alone is not enough. With certain real estate investments, you have to pay for brokerage, brokerage, administration and later for the maintenance and modernization of the property. The investment is not always “free”.
Wait and drink tea or keep the reins in hand? Keep your agency.
Different real estate investments offer an extra level of participation: Do I want to choose the real estate projects in which I invest myself? Or do I leave that to a professional manager? Depending on how specifically you want to decide on the details of the real estate investment, there is a suitable investment.