ᐅ Is Building and Renting a Semi-Detached House a Viable Investment?

You cannot get rich from real estate, only richer. A novice first needs some disposable money to cope with the setbacks they encounter with seemingly good deals. At auctions, you must be able to pay immediately, meaning the financing should actually already be arranged before you attend.

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nordanney schrieb:

Nonsense. With 10 units, you simply earn 10 times as much. No more, no less.

If you own an apartment and end up with a problematic tenant, the return on that property can be negative for decades. The only way to reduce this risk is through diversification: many apartments, different buildings, sizes, and locations.

By the way, I would generally recommend professional property management. Privately managed buildings almost always end up close to collapse at some point. (Oh no, heating broken, roof replaced, and two water damages in one year?! And the building is only 40 years old…)

And since you mentioned cash flow: If one tenant stops paying rent for a few months and at the same time another tenant moves out, leaving the apartment empty for three months due to renovation and searching for a new tenant, your cash flow is gone. Nothing flows! Only the bank withdrawals remain.

That is why I disagree with your claim that I am writing "nonsense."

Deliverer schrieb:
If you are a (proud) owner of an apartment and end up with a problem tenant, the return on that apartment will be negative over decades. The only way to minimize this risk is to diversify broadly. Many apartments, different buildings, sizes, locations.

I minimize the risk with my apartments by thoroughly screening tenants. If someone doesn’t like that, they can rent elsewhere.
For 20 years, I have only had short-term vacancies due to tenant turnover. There aren’t that many problem tenants anyway.

Deliverer schrieb:
By the way, I would generally have apartments managed professionally. Privately managed houses almost always end up close to collapse at some point. (Oh no, heating broken, roof replaced, and two water damages in one year?! And the house is only 40 years old...)

This is about the management of apartments, not houses. The building itself is managed anyway by the homeowners’ association. Usually, that prevents collapse because reserves have to be built up. Then, the new heating system is paid for from these reserves. That’s completely normal.

Deliverer schrieb:
And since you mentioned cash flow: You just need one tenant to miss rent for a couple of months, and at the same time another tenant moves out, leaving the apartment empty for three months due to renovation and finding a new tenant, and suddenly the cash flow is gone. Nothing is flowing! Only the bank withdrawals.

What are you trying to say? That has nothing to do with location, tenant, or number of apartments. Tenant turnover always happens.
BUT: I pay a lower purchase price and have a smaller mortgage on an apartment in a normal or budget segment compared to an expensive apartment. I’d rather buy one with a 10% yield than one in a prime location with 2%, where I don’t make any real profit and mainly rely on appreciation.

But I agree with you: anyone wanting to buy a rental property (whether a small apartment or an entire residential complex) should be aware that properties also incur ongoing costs and that unexpected expenses can arise. So, your creditworthiness must be solid.
Saving taxes with real estate only makes sense if you are paying a lot of taxes—meaning you have reached the highest tax brackets. Then I’m happy to renovate and let the government cover 42% of the costs. This also applies to temporary vacancies.

Nordanney, it seems you own several apartments. So our opinions aren’t that far apart. And if you’ve been doing this for a long time, you obviously have experience and a good touch. But this thread is also partly about preventing unrealistic expectations from inexperienced newcomers, right?

By the way, could you explain this to me too? I’d like to do that as well:

nordanney schrieb:
Then I also like to renovate and have the government cover 42% of the costs.

(feel free to message me privately, doesn’t need to be public)