
Real estate as an investment: Is it really worth it?
What is the current situation on the housing market?
Unlike many other investment options such as stocks or bonds, real estate seems to be less susceptible to short-term market fluctuations. Landlords benefit from regular rental income and rising property values.
During the low-interest phase, many people paid hardly any interest on their real estate loans. This situation has changed significantly with the interest rate turnaround in 2022. Since then, financing has become more expensive, while real estate prices have fallen overall. As a result, the supply of condominiums has increased since then. This situation could change again soon. However, now seems to be a particularly favorable time, especially for smaller apartments.
What are the advantages of real estate as an investment?
- Stable appreciation: Real estate tends to increase in value, especially in sought-after locations. This ensures potential profits when selling at a later date.
- Regular income: Renting out the property can generate regular rental income, which serves as additional income.
- Inflation protection: Real estate values and rental income often rise with inflation, which means that the investment retains its value.
- Tax advantages: Costs such as interest, renovations, and depreciation can be claimed for tax purposes.
- Tangible asset security: Unlike stocks or funds, real estate is a physical asset that is less susceptible to market fluctuations.
- retirement provision: Real estate can provide a secure source of income in retirement, whether through rental income or debt-free home ownership.
What challenges and risks should be taken into account?
Real estate as an investment comes with a number of challenges, such as high capital requirements and ongoing maintenance costs. If you own several properties, you have to manage them, which is time-consuming and costly. Renting, rental agreements, and repairs require organization. In addition, market fluctuations and economic crises pose risks, and rent defaults can lead to financial bottlenecks.
Conclusion
Investing in real estate continues to be considered worthwhile and profitable. It offers not only financial returns, but also security and stability. However, anyone planning to purchase real estate as an investment should not underestimate the obligations involved. A professional real estate agent can help you make the right choice.
Are you looking to purchase a property as an investment? Contact us! We will be happy to advise you.
Notes:
For reasons of better readability, the generic masculine form is used in this text. Female and other gender identities are expressly included insofar as this is necessary for the statement.
Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific case.
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