1. There is no danger of inflation
Real estate doesn’t lose its value. Investing in real estate will ensure that investors’ money is protected.
Inflation has devalued money time and again. Inflation is a term that refers to an increase in consumer prices. It comes from economics. An increase in price can be caused by an increase in the exchange ratio between goods and money supply. If the money supply grows without production increasing at the same pace, inflation may occur.
2. Property Value Increases
Germany’s main pillar of tax-free asset accumulation is real estate ownership.
Apart from the traditional home, rented real property such a residential property, condominiums, and apartment buildings, are all excellent investments.
Only real estate is a network that offers high levels of security, protection from inflation, tax benefits, yield, and income source in old age.
This is a wise investment that will not only yield a great return on the rental income but also increase your property’s value.
The German property market saw a sharp rise in value last year. The IMX realty index for new buildings, which was 110.4 for condominiums a year back, is now at 115.7 in November. Prices for existing properties increased less from 100.9 to 101.9.
Another important factor is the ability to recover real estate. Real estate is a classic asset that can withstand all kinds of crises. Land has been valuable for centuries. People have been talking for years about the highest prices in the property market. These maximum prices continue to rise.
3. You can inherit tangible assets
Real estate can be passed to your heirs so you have the peace of mind that you have an inheritance that is worth the money and your descendants will enjoy the benefits.
It is desirable to be able pass real estate assets on to your children. The state has contributed to the realization that real estate assets can be preserved by heirs.
4. Tax Advantages
The State can steer investments in its favor by using fixed tax concessions. These are clearly defined in the Income Tax Act.
This opens up a world of possibilities for real estate investors to allow the state to participate in your asset accumulation.
When it comes to investing properties, saving taxes with real property is really appealing. This area offers many opportunities for investors to deduct taxes from real estate.
Many expenses can be claimed as deductibles in the case of a leased home. The purchase price and construction cost are the most important. However, compensation payments for damaged furniture, repairs to an old building, and preparation of the garden are also eligible as deductible costs. The purchase price and catering costs for the craftsmen during the topping-out ceremony is also included.
5. Direct Interest and Rental Income
Real estate investments offer regular rental income and direct interest.
The bank does not provide money to the investor when he invests in real estate. Instead, he rents the apartment out and gets his money back from the tenant. This allows him to be independent from the bank’s decisions.
Your passive income is the monthly rental of your property. You should avoid buying a house or condominium. Rents in certain areas can be higher over time, but only for those regions that have the right conditions.
A real estate agent can help you as well. Expert knowledge is essential to make the right decision when purchasing a property.
An investor who invests in a savings account will not get a replacement for inflation. The risk of inflation increases with a higher interest rate.
An investor can get both a high rental income return and low risk when investing in real estate.
6. Retirement Benefits
Real estate investments are the best retirement plan.
You can avoid debt by investing in real estate early on and you won’t have to rent a property. This relieves a lot of pressure from your bank account. In old age, there may be a gap in your retirement savings that you can bridge by investing in real estate.
Recurrent regrouping capital investments can lead to lower returns. This can be partly explained by transaction costs, and partly because it is difficult to find the right time to enter or exit a market. Stock exchanges have a saying: “Back and forth empty pockets.”
Real estate investments should be considered long-term or medium-term. You should coordinate your financial goals with your time horizons.
7. Independence from Monetary Policy
Real estate investments allow you to sleep peacefully because you don’t have to worry about politics.
You’ve probably invested in securities. If you’ve ever done so, you know how devastating even the smallest decisions can be. You can lose half your assets if a decision-maker just expresses an opinion.
The European Central Bank’s relaxed monetary policy continues to be a favorable factor for apartment and house buyers. The central bank is limited in its ability to raise interest rates in 2015 because of the lower interest rates and the weakening south European states.
8. Your Apartment is yours to own
You probably know the expression “Everyone pays for an entire apartment over the course of their lives”, but not everyone pays for theirs.
You can feel good about a real estate investment because the money flows into your home and you are creating a lasting value through the monthly installments.
The purchase of assets can be secured and built up by favourable interest rates, moderate real estate prices and a favorable exchange rate.
An owner-occupier can make a property a smart capital investment. This is because it offers significant additional benefits compared to other investment options. Apartments offer both the benefit of living in your capital investment while also saving you rent, unlike shares, federal treasury bond or gold.