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FAQ
What exactly does a capital investment property entail?
You purchase a property and your tenants pay it off. You acquire the property, but not with saved assets. Instead, you primarily use borrowed capital in the form of a low-interest loan from a bank. Interest rates are currently at an all-time low, and with a fixed interest rate, you can secure the favourable conditions for the entire term of your loan.
In order to ensure that you, the owner, do not have any problems with the property, Immvest organises an audited condominium management for you. The management company handles rent payments, rentals, utility bills and minor repairs.
What are the risks involved in capital investment properties?
Just like all financial investments, real estate is not completely without risks. The risks primarily include vacancy of the property, rental nomads or damage and price erosion.
On average, property prices have seen a steady increase over the past decades. Even if the property has a prime location, you should be able to allow for a short-term vacancy and budget for it.
You can take out insurance to cover possible loss of rent and rent nomads.
What does the term "off-market property" mean?
Off-market properties are not accessible to everyone and are not offered on the mainstream property portals. We collaborate with property developers and offer you the properties directly. For you as a buyer and investor, off-market properties are available without any commissions, as the seller of the property assumes the costs.
Why the location is so important in a capital investment property?
A good location for the property is extremely important. However, this does not depend on where your personal life is based. The development of the property's value is far more important. This trend turns out to be particularly positive in the cities, where housing is in short supply. The demand is not as great and the appreciation is lower in rural regions.
Immvest only holds properties in its portfolio in very good locations within the city or with direct access to the city.
Why are capital investment immobilities suitable for pension plans?
It is common knowledge that the state pension alone will not be enough to maintain the standard of living in retirement.
When you conclude a private pension insurance policy, you pay monthly contributions which, depending on the product, are subsidised by the state as a pension. When you retire, you can then opt for either an annuity payment or a lump-sum payment.
When you choose real estate as an investment, you also accumulate assets for retirement. But the principle works in a different way: You do not save on a monthly basis. Instead, you obtain financing for the purchase of a property. The loan is repaid monthly to the bank, and the majority of it is paid by your tenants. When you start retirement, you will then be the owner of a paid-off and rented condominium.
The key aspect of the principle is that the property was largely paid off not by you, but rather by your tenants.
Capital investment properties as a pension plan for everyone?
In essence, yes, because the current low interest rate level means that financing is available at favourable rates. As a result, even normal earners can supplement their pension plans with a property.
However, you should not calculate things too narrowly. Banks focus on a positive domestic budget and the ability to service the debt, i.e. there should be equity capital for the ancillary expenses of the purchase, among other things. You should have a net income of over 2,000 euros. If you are planning to invest as a family, you should have a net income exceeding 3,500 euros.
What do I have to do to purchase a property to secure a pension plan?
1) Initial meeting
A get-to-know-you meeting when we explain what we can offer you and you tell us if and how we can work together. The initial meeting can take place in person, by telephone or by video conference.
2) Financial check
You fill out a financial check form for us and we check which investment volume best suits you. This provides us with a basis for finding just the right solution for you.
3) Concept meeting
You specify your needs and expectations. We conduct a sample calculation for you for a flat in the price segment that best meets your needs. Among other things, we clarify how much rent you can collect, how high the tax benefits might be, and what the running costs are.
4) Business case meeting
We will show you the property that is most suitable for you and discuss the specific facts and figures in detail. We will present you with all the specific data so that you can make the most informed decision possible.
5) Support with the purchase transaction
What happens now? If the figures match your requirements, we will arrange an appointment to inspect the property. We would also organise the appropriate financing at the same time. We will then accompany you to the notary appointment.
6) Long-term support
Our business relationship does not end with the notary appointment. Immvest also provides you with the right property and special rental management services. The latter is tasked with the maintenance of the property and handles communication with the tenants.
How much expenditure do I have to anticipate for a capital investment property?
You naturally have to invest a certain level of expenditure until you are allowed to call the property your own: You have to visit the property, organise the financing and visit the notary. From the time ownership is transferred, you can decide how much more expenditure you are comfortable with. You can either take care of everything, or you can hire a management company.
In apartment buildings, the owners' association always appoints a property management company. The key tasks of property management include facility management and providing other service providers, electricity/gas/heating oil, managing the reserve account, insurance, telephone/cable connection and issuing tenders for repairs/renovations of common property.
A normal property management company does NOT manage your flat. We can recommend a special property management (SPM) for such purposes. The tasks of the SPM include ensuring the acceptance and handover of the flat when tenants change, checking the receipt of rent payments, settling the service charge account for the tenants and taking care of minor repairs in your flat. The SPM represents you in dealings with the tenant, so you have no organisational work to do. This is extremely practical if your property is not right next door.
Can I also save taxes with a property?
Immvest focuses on the acquisition of a sustainable property that preserves liquidity and not primarily on tax savings. You can of course also save taxes when investing in real estate. It is best to discuss your individual situation with your tax consultant.
