Capital investment real estate – how do I invest my money sensibly today?

The question of which capital investment is the most lucrative cannot be answered in general terms. Depending on the investment volume and personal goals, the search for the best investments can be more or less difficult. Fact is however that the correct investment with a suitable net yield brings a worthwhile increase in value with itself and has many advantages for the investor. Find out everything about capital investment and which one is suitable for your individual capital.

Investment money sensibly – which investments are really worthwhile themselves

Many things can be considered as capital investments, but most of them are only profitable for a certain amount of capital invested. From real estate and life insurance to gold and diamonds, there is a wide range of investment projects suitable for investors.

Real estate as capital investment – houses and properties in the comparison

Using real estate as a capital investment is currently a trend and for good reason. Interest rates are currently at an all-time low, which has a negative impact not only on the profitability of traditional investments such as government bonds or equities, but also on the conditions for loans. These are very attractive due to the low interest rates, which means that home buyers can take out loans at very advantageous conditions from banks. But also the development of the real estate market speaks for the investment in a real estate. The prices for investment real estates rise constantly, particularly in announced areas, like Berlin, Hamburg or Munich which is reflected in a high net yield.

Real estate as a capital investment can be used in three different ways. First of all by the self-use. A real estate is bought and the owner lives even in this, saves thus renting costs and uses its investment. Of course, the property can also be rented. Thus the capital investment is used to take monthly rents and to increase so its own capital funds. In addition, the money can also be invested indirectly in real estate through real estate shares or funds. A lucrative method for investors of smaller capital or such, which shy the administrative expenditure of their own real estate. However, it should be clearly mentioned that a property is a long-term investment and is not suitable or profitable for short-term investments.

The 9 most important key figures – real estate as investments

  • Purchase price – The purchase price should always be set in relation to the annual cold rent. Check here whether the ratio is usual for the location. A factor of 20-25 tends to be favourable and common in most locations, but from a factor of 30 it gets expensive.
  • Ancillary costs – In your calculation, pay attention in any case to the land transfer tax, the notary costs and the broker commission, as these can make up a considerable amount
  • Lifetime – A property is a long-term investment. The desired useful life should always be known in advance, also in order to evaluate the lucrativeness of the property.
  • Income – What is the range of square metre costs in your region? And what rental income can be expected? Consider also the case, if the real estate stands empty and a new tenant must be found and associated rent losses.
  • Administrative costs – What are the administrative costs of the property?
  • Maintenance effort – How old is the property and is it possible to incur future costs for renovation, refurbishment, etc.?
  • Taxes – How high is the depreciation and the marginal tax rate and what effects can this have on the property as an investment?
  • Financing – Do you need financing to acquire the property as an investment? Pay attention to the monthly repayment rates and whether a property as an investment is still worthwhile for you.
  • Resale – What influences the performance of your property and how can you sell it profitably in the future?

One-family house as capital investment – rental, owner-occupation or as holiday home

Investing in a detached house has many advantages. For the investment in a house a considerable capital is presupposed first of all natural. By letting the invested capital can grow however and the real estate pays off in the long term. A single-family house offers the advantages compared with other investment properties that it can be offered depending on location and quality at a high rent rate and the investment pays off after a shorter time and produces success. Single-family homes are also very popular with young families in particular. Of course, a single-family house can also be used for one’s own purposes or made available to one’s own children or family members. Single-family houses are also suitable as holiday homes in the right areas and can be rented as such temporarily.

land as investment – clever businessmen attentive

The acquisition of land as an investment can be very profitable if certain things are taken into account. On the one hand, due to steadily rising population rates, it can be assumed that land will no longer lose value in the future. In addition, buyers have the advantage that the additional proceeds that arise after the sale of the property become tax-free after a holding period of at least 10 years. During the holding period, the capital employed can also be increased by rental or leasing income. An additional possibility is the rental of very small rental spaces, such as garages, parking spaces, parking lots, storage containers, but also the rental of space for advertising, vending machines or clothing collection boxes is possible. A trick that clever businessmen use again and again is the purchase of very large areas of arable land. This land is then divided into smaller sections and resold for the construction of detached houses, for example. Large plots are usually relatively inexpensive compared to smaller plots, which makes the sale of several divided small plots profitable.

Investing in land also has some advantages over investing in real estate. The holding costs are comparatively lower. In addition, a property has a lower risk of damage to the building or rental nomads, for example.

Two-family & multiple dwelling as an investment – much responsibility for investors

First and foremost, two-family houses or apartment buildings have the advantage that they generate regular rental income from several tenants instead of just one rental income per month, as is the case with single-family houses. The security of the capital increase is therefore comparatively high with multi-family houses, whereby it must also be noted that the capital contribution must also be higher than with a single-family house or a property. A further risk is possible loss of rent or expensive repairs that have to be carried out on the house. Investing in a multi-family house involves a lot of responsibility and in the worst case can mean a lot of work, but the capital investment can also be very profitable and have many advantages.

Condominium apartment as capital investment – small starting capital, high capital maximization

A condominium as a capital investment offers great opportunities to maximize the capital invested. The possibilities are somewhat limited compared to a house as an investment, but the risk is lower. The rental of the condominium brings a monthly rent, which expands the invested capital. As a condition however a lower starting capital is necessary than with purchase of a house, which is extremely advantageous for many buyers. The risk of loss of rent also exists with this capital investment, but the risk of damage is much lower than with a house. The condominium can also be used as a holiday home and can be rented to tenants for a short period of time or used for one’s own purposes.

New building VS old building – care and maintenance of the investment

The question of a new building or an old building is not always easy, because both captivate with their own advantages. A new building has the decisive advantage that the property can be designed entirely according to the wishes of the client. This applies both to the property itself and to the choice of location. If a house is newly built, the latest technology is always used. Both in terms of security and theft protection as well as energy efficiency. The latest insulation and thermal insulation not only helps the environment, but also reduces heating costs. But a building also has one or two disadvantages. Building a house can be very strenuous and exhausting, as the client always has to keep control over the building site and the work required. In case of problems with the developer, the client always gets the short end of the stick, as the money invested is usually lost. In addition, construction errors are only noticed very late in a new building, usually after a few years. In addition, a new building is more expensive than an old one because everything has to be made new. With an old building, on the other hand, the stressful planning and construction phase is eliminated and the move-in can be started immediately. The old building also has the advantage that it can be inspected and checked for construction errors in advance. Since there are no costs for the public development, old buildings are usually cheaper than a new building, even if with an old building often still renovation and redevelopment costs result. In order to avoid these costs as much as possible, a detailed appraisal of the building should be made in advance to avoid any negative surprises. A further disadvantage of the old building is that conversion measures are often only limitedly possible due to the building structure or a monument protection.

5 Tipps for buyers – a real estate as investment

  • Tip 1: Clarify budget early
    The amount of equity capital is the most important indicator that future real estate owners should deal with. This key figure is not only important for the calculation, but also for the repayment of the possible loan and interest. How much budget is available is therefore decisive for the purchase decision process and has the greatest influence on it.
  • Tip 2: erase as high as possible
    The initial redemption should be at least two percent, so that you also have something of your property in the long term. This plays an important role, especially in periods of low interest rates, as the repayment portion of the rate increases more slowly with low interest rates than with high ones.
  • Tip 3: Estimate prices correctly
    In order not to buy a property above the market price, important parameters should always be compared in advance. Points such as location, price development, environment and equipment or the size of the house should be compared with the individual market of the environment.
  • Tip 4: Hedging interest rates
    Choosing a long borrowing rate commitment is essential for real estate buyers, because if the market interest rate has risen at the end of the borrowing rate commitment, the credit rates automatically become expensive. A low-interest phase should therefore be exploited in order to secure the best interest rates for the entire term if possible. Full planning security is provided by full repayment loans that are fully paid off at the end of the fixed interest period.
  • Tip 5: Always keep calm
    Even if market pressure prevails, the decision to invest in real estate should not be made prematurely. It means keeping calm and always rethinking the decision well. Always consider the rental income in relation to the yields of other investments when making this decision.

Savings deposits as capital investment – little effort and hardly any obligations

In the case of savings algae, the capital is held in a savings account on which interest is calculated. The amount of interest income depends on the situation on the current financial market, which is subject to constant fluctuations. Even if the savings account was opened at a time with advantageously high interest rates, these can slide in the next months to lowest values. The savings deposits are invested for an indefinite period and cannot be used for normal payment transactions during this period. In order to dispose of the money, the savings account must be presented at the bank and a limited amount can thus be paid out per month. Savings deposits are usually subject to three months’ notice. However, the interest earned is not credited to the account until 31.12. of the calendar year. A capital investment in the form of a savings deposit therefore has many advantages. This type of investment is very easy for the investor, as there are hardly any obligations and the money multiplies by itself. Unfortunately the disadvantages are not to be forgotten, since the quantity of the capital growth is very inaccurate due to interest fluctuations and depending upon situation more or less lucrative.

Life insurances as investment – long running time and a secured profit

Life insurance serves to save money and at the same time to increase and for the future, mostly to provide for the pension. When taking out a endowment life insurance policy, a fixed amount is paid in by the insured person monthly or annually over a certain period of usually 12 years. From these payments, the insurance company charges a fee for administration and risk protection. The remaining amount is invested by the insurance company in other forms of investment, such as real estate, shares or bonds. The insurance company has a guaranteed interest rate, which it must adhere to, which is usually 0.9 percent. The insured person thus receives at least 0.9 percent more money back at the end of the contract term than he has paid in over the years. At the end of the contract term, the insured receives the money that he has paid in over the entire term again and additionally the surpluses that the insurance has earned over the years. Depending on this, one receives more or less money through interest again, but at least 0.9 percent interest income.

This possibility of the investments is very uncomplicated, since the investor does not have to do much. However the investor with a life insurance buys the cat in the Sack′ so to speak, because the exact net yield becomes really apparent only at the end of the contract running time. The expenditure is very small for it, since only the contribution must be paid and at the end more money waits for the investor, than it deposited.

shares as investment – high chances of profit on risk

Shares represent shares in a company that has issued them and trades on the stock exchange. Depending on the value and number of shares, the buyer is co-owner of a certain percentage of the company and participates in the company’s success. The company sells certain company shares in order to increase its equity. If the company generates profits, the value of the share increases and the share buyers also receive a portion of the profit. In such a case one speaks of the dividend. In the best case the share buyer profits from a rising share value and the dividend and thus increases the invested capital. The risk, however, is to buy the stock of a company that does not make a profit. In this case, the share loses value and there is no dividend for the share buyer.

A share as an investment therefore carries a high risk, as the success of the own capital is linked to the success of the company. Even in crisis-proof companies, there is always a risk that can lead to losses. A scandal, an accident, a bad decision by the company management or similar are sufficient to turn a safe share into a risk share. On the other hand, however, shares can also experience high flights of fancy and provide the share buyer with undreamt-of high returns. Shares as an investment are therefore particularly suitable for investors who are familiar with the sector and can financially cope with possible losses. It is important not to bet everything on one horse, but to invest in shares of several potential companies and to keep the chances of profit as high as possible.

Apartment viewing tips: How to convince + what to bring to the new landlord? 

Tips for visiting apartments are so varied! But what does it really matter when you stand in front of your potential new landlord for the first time? Whether you are a real estate agent or a landlord, with a few good tips you can increase the chances of your dream home. Today we will tell you our ultimate 7 tips for your next visit. No matter whether apartment, terraced house or semi-detached house, landlords pay attention to solvent, serious and long-term tenants. Therefore you should consider the following points already in the preparation for the apartment inspection:

Write an e-mail instead of just a “visit request”

Can you imagine how many requests a real estate agent receives for a single property? Particularly in the large conurbations such as Frankfurt am Main or Berlin, applicants pile up for individual apartments and, of course, for houses. There is a very simple tip that you can follow right from the start, when writing your first letter to your future potential landlord or the real estate agent.

Most of the large real estate portals offer their users automated, mandatory writing. This is usually a single sentence, for example:

I would like to arrange a viewing appointment

Of course, you can now imagine that a broker receives a lot of such standardized notifications every day. This is why you can stand out as an applicant for an apartment if you write a personal, individual text to the estate agent or landlord. You don’t need to formulate a big cover letter, just a few personal sentences and statements are enough.

First of all, you should make sure that you address the potential new landlord by name. In 98% of all real estate advertisements you have a personal contact person or a name of the broker. Especially with large real estate companies, you should also pay attention to the respective object ID or the real estate number or street or even floor to indicate so that you are guaranteed to get a visit for the right apartment. As already described, you should not only trust in the standard text but also clearly show your own interest in the apartment. If you already have a friendly cover letter, think of a friendly wording at the end of your e-mail when saying goodbye.

In a nutshell:

  • Use the direct form of address if the name of the landlord or provider is in the advertisement
  • Always name the apartment or object ID
  • formulate interest in the apartment, use not only the automatically generated text of the real estate portals
  • Write a few sentences about yourself (see tip 2 for details)
  • Request a viewing appointment, if you do not have much time, name time window directly possible for a viewing
  • Don’t forget the farewell greeting, like “kind regards”

What exactly should a cover letter say? What should I write and what should I leave out?

Talk about yourself, who are you (occupation, hobby, honorary office)?

In our second tip, note 2 things, tell as much as possible but only as much as necessary. What the landlord is interested in are solvent, serious and long-term tenants. Therefore, go into your profession, tell a little about your activity. You can also talk about your hobbies, so for example you can briefly mention that you are very athletic.

So draw a positive picture of yourself, show that you are solvent and that you think long-term.

If you have a small pet, such as a budgie or hamster, don’t talk about it. If you smoke a cigarette occasionally, leave it out. The first cover letter is mainly about the fact that the landlord has a serious and solvent impression of you as an applicant for a flat.

Tip! Do you have an honorary position?

Millions of people are involved in voluntary work in Germany. If you’re one of those people, mention it! With an honorary position you can also have a very positive effect on the future landlord. Even if it is a matter close to your heart and you are not making for the glory, it is worth mentioning briefly for the dream apartment that you are volunteering and what your job is.

You must always be serious before the landlord

Your cover letter has been formulated and the correct sentences and contents have been found for the potential landlord. In the next tip, we would like to point out that you also pay attention to the correct sender! If your e-mail address does not look serious, you should change it beforehand. For example, a few serious e-mail addresses look like this


Instead, choose a reputable email address without frills. For example, a reputable email address looks like this:


If your desired name is no longer free, simply add .flat, like here:


As well as the e-mail address, your e-mail signature should also be reputable. Ideally, you should make sure that your name appears in the e-mail signature, if possible perhaps even your profession and your contact details. But also here we have another tip for you, also the origin of the name plays a role for many landlords. So, if you are honest, you have to stress that for example Arabic first names have less chances to visit an apartment, which has already been proven by various studies. Therefore we would like to give you two tips here, if you have a surname, where you might have disadvantages when viewing the apartment or awarding the contract, use the name of your partner, if he or she has a more domestic name.

You can also abbreviate your name, for example by adding a dot to your first name. Then there is also the possibility to upgrade your own name. For example, studies have shown that a second first name or an abbreviated second first name has a similar effect to an academic title. Instead of

Hamat Khalifa Al-Tahni

You may prefer to use it for your signature:

H. Al-Thani
or H. K. Al-Thani

So make sure in your cover letter that who signs it is also noted.

If you consider all these tips already in your cover letter for your apartment or new house, the chance of a viewing appointment increases. Once you have done this, we will come to the other tips for your viewing appointment.

You did it, congratulations! You have received the invitation to your viewing appointment. In most cases, however, not only do you get an appointment, but also 40 or 50 applicants. The landlord or real estate agent wants to keep as many potential candidates as possible open to find the perfect candidate. Now you have to convince! But how does that work? Here we have all the important tips and advice for you, from our experts.

Courtesy rules are important for the impression

Punctual, honest, don’t talk badly about others. Everyone knows the absolute basics of courtesy. Of course, courtesy is also very important when viewing an apartment, because the landlord pays attention to it. Not only for yourself, of course there are also neighbours in multi-family houses. And since the landlord also wants to have a quiet environment for himself by having to take care of as few problems as possible, you should also pay attention to the most important virtues right from the start. This of course includes punctuality, which means that it is better to be on site 5 minutes before the appointment instead of five minutes too late. Added to this is honesty. If you claim to make a lot of money, but then turn up in simple sneakers, the landlord will directly become skeptical. In the next step you should talk positively about yourself, not negatively about the others! Anyone who blasphemes will, of course, stand out directly and negatively. Likewise the landlord could have immediately in the back of his mind that one could talk also about him or her in such a way!

If you remember basic courtesies, you can earn a lot of bonus points. Be it a simple friendly greeting or just the classic punctuality. Landlords and real estate agents will only rate such positive behaviour as positive.

Tip! Clothing makes people

Show yourself from your best side at the viewing appointment! Leave casual wear and sweatpants at home on this day. Because, of course, people also pay attention to clothes. Therefore, wear good shoes, jeans instead of jogging trousers and of course pay attention to well-kept hair and a generally well-kept appearance.

Smokers should also be careful not to smoke a cigarette 10-15 minutes before their appointment. Of course, non-smokers are usually not very positive if the new tenant is a heavy smoker. Chewing gum should therefore be mandatory if you appear as a smoker at a viewing appointment!

Tip! Bag full of documents means businessman / businesswoman

A good tip, especially for busy metropolises like Frankfurt or Berlin – take a bag full of documents with you! Anyone who has a good job and earns good money usually has a lot to do. If you take out your prepared documents and there are other documents in them at the same time, this is usually interpreted to your advantage. On the one hand you seem organised and on the other hand you have many tasks to master. That speaks for organization and of course also for a certain solvency.

Ask the landlord the right questions

If you have the chance to talk to the broker or landlord, what questions should you ask? Always remember, put yourself in the landlord’s shoes! Would you like to talk about potential shortcomings? Possible renovations? No! Therefore, ask questions about the neighbourhood or the general environment. How are the bus connections nearby, how are the neighbours? These are questions you should ask during the interview! Avoid questions about defects or potential cost sources for the landlord. Remember that you may be invited to a meeting with 30-40 potential applicants and have only 20 minutes to convince yourself. This means that everyone has 20 or 30 seconds to briefly introduce themselves and hand in their documents. That’s why we also have a tip for you later on: prepare your documents properly!

Tip! Tell us about the future, landlords want long rentals

Here is another tip from our practice. Tell me about the future! Why is this so important? Landlords are business people, they rent out their freestanding spaces to generate profits. The longer a contractual relationship is, the easier it is for the landlord himself to plan. He also saves time for potential new occupants of flats or houses. So if you talk about the future and build a meaningful construct that the landlord can rely on you as a long-term tenant, you will definitely score! So don’t just talk about what you’ve done so far, for example, professionally or in an honorary position, also talk about the future!

That sounds like a lot of discussion material! One should not always tell everything, we come to this in our tip number 6 for the apartment inspection.

Don’t always tell everything at the appointment

Do you smoke a lot or like to listen to metal music? Put yourself back in the position of the landlord, how would you react if you had a new tenant in a freshly painted apartment who smokes cigarette chain? What would you think if the new tenant listened to music loudly and your old tenants were harassed by it? Also leave out a few facts about yourself at the viewing appointment. After all, you’re not lying, you’re just leaving out a few pieces. Before you tell too much about which brand of cigarettes you prefer to smoke, tell about Tip 5, the future! Or mention your profession, your hobbies or your voluntary work.

In fact, you don’t have to reveal everything about yourself during an interview! As an applicant, you have the choice as to which information you would like to share and which information you would prefer to keep to yourself.

Prepare a portfolio with cover letter: Schufa to proof of income

100 faces, who stays in your head? Remember your email address, the more personal the touch, the more likely you are to have the chance to stay with the landlord or broker in mind. The presence is very important, because in the end it’s often a gut decision, who do you remember and who don’t? Those who have left a positive impression will have a better chance of finding the apartment they want. Therefore it is recommended for applicants not only to write a personal cover letter in the first e-mail but also to prepare a folder with the most important information about themselves. This does not only include a short cover letter in which you talk about yourself personally, but also forms that are required by the landlord or real estate agent. This includes, for example, tenant self-disclosure.

What should I bring to the landlord?

  • ID card
  • self-disclosure
  • Contract of employment / Proof of income
  • Schufa information
  • certificate from previous lessor
  • rental surety (if available)

If you have such a personal folder with you at your viewing appointment, the chance increases that the landlord will remember you after the viewing appointment or after the 30, 40, 50 new faces. Most applicants will only fill out the pre-fabricated standard form from the landlord when visiting apartments. Who can bring here his own information folder is clearly in the advantage.

Those were our seven tips plus a few little extras for your next apartment tour! We wish you much success with the letter of the landlord and naturally also with the following inspection date. At the end we have summarized here again briefly what you should also pay attention to character-wise, with an apartment inspection. Because the mental attitude also belongs to it. Do I assume I get the apartment and wear a smile? Or do I already assume that someone else will surely get the apartment and I don’t bother? Assume that you will get exactly this apartment today!

Extra tip: Prove character!

Here once again the most important thing for your own mental attitude during the apartment inspection and the preparation for the inspection. Tips at a glance:

  1. Leave a good first impression
  2. Appear natural and confident
  3. Bring your complete documents with
  4. Ask the right questions and give the right answers
  5. Show that you are determined to get the property
  6. Insert yourself in the landlord