The investment property market is very different from the market for owner-occupiers. What do you have to watch out for? What are the special features?
Investment property - what distinguishes capital investors from owner-occupiers?
A well-founded calculation of net and gross yields, target and actual rental income, non-apportionable costs and investment requirements ensure a well-founded sales price. Less experienced owners meet professional investors.
Especially in the area of capital investments, a lot has happened due to the low interest rate level, low number of offers and the high demand for condominiums.
As an owner, you face a different clientele in this market than in classic owner-occupied real estate.
Only those who know the market and their own property well can be sure to get what is currently possible for their assets.
Under investment real estate we understand the real estate, with which the net yield stands in the foreground. As a capital investment or by exploiting potential in project development.
Who are the participants in this market and what is important to them?
Rationality instead of emotionality.
Facts Facts Facts
In contrast to the classic owner-occupier, emotions play only a subordinate role here when buying real estate. What counts are facts:
The gross and net returns currently achieved, the investment requirements and the potential of the property. Sellers should always have all the figures well prepared here. Moreover, valuation plays an even greater role in this area than in the case of single-family houses or apartments. Where emotions play only a subordinate role, one should know the value and the investment expenditure exactly. Otherwise, one can quickly lose out financially and be annoyed afterwards not to have achieved the optimum. The object documents should have therefore absolutely also the important data and facts. Ideally, they should be geared directly to the main target group.
Net yield, gross yield, rental income (TARGET and ACTUAL, cold rent, apportionable operating costs and non-apportionable operating costs), investment requirements.
Not emotions, but the calculator decides with the investment property.
The condition of the property
In addition, you should be able to provide information about the condition of the individual residential units and the house, the renovation and modernization measures that have been carried out.
What costs reduce the profit and return on the investment property?
In addition, of course, the important loanable documents must not be missing. In particular, you should have the relevant building permits for areas that are often critical (especially roofs, balconies, conservatories).
Time is money. Where calculations are made, comprehensive information is expected more quickly. Investment properties have a different clientele.
Tends to be more in the area of smaller investments. From condominiums to apartment buildings with a manageable number of units.
For some, there is also the ulterior motive of later owner occupation.
Tax advisors and banks take a close look to see if it pays off.
Funds, insurance companies, capital investors on a grand scale
Clearly focused on returns. Mostly grateful if as little as possible has to be done and the expected returns can be easily calculated.
These enjoy existing potential. Be it through later conversion, expansion or modernization.
Of the three capital investors, the private capital investors are still the group that brings in the most emotion.
But here, too, the following applies: An investor will not buy without it being profitable.
In this group there are investors who only want to have finished real estate but also those who definitely enjoy a long-term development of the real estate.
Investment Real Estate Cologne
Buying or selling a plot of land, apartment, house or apartment building in Cologne?
Would you like a competent partner for your real estate sale or property purchase in Cologne?
Whether land, apartment, house or apartment building.
Clearly locally focused on Cologne.