In another post, I just read that people often invest leftover money in real estate properties that are supposed to generate a return through rental income. I am a complete beginner in this area. So far, we have mostly earned returns through investments in the stock market. I have often wondered how renting out properties actually works. Do you achieve returns mainly through the rental income? Or is it more because of some kind of tax savings? Does it really pay off in the end? Maybe someone here can clarify this for me?
Rumbi441 schrieb:
What kind of question is that: If your income is higher than your expenses, then you make a profit...
You can make money with property rental, but you might not as well.Aha… so it seems quite simple then...
Please explain it to me with an example: I buy (or finance) a house for 200,000 EUR and want to rent it out. How do I achieve a reasonable return?
Yes, it’s quite simple if you want to do it.
Would you like to know how to calculate it?
There are thousands of websites and books available that explain this in detail.
Try searching on Google for: rental yield calculator
Since you mentioned tax savings, it would be a good idea to consult a tax advisor. Depending on your willingness and “creative” effort, there are many options available. These range from straightforward depreciation methods to setting up a company abroad, of course assuming your tax liability in Germany is high enough to make it worthwhile.
Would you like to know how to calculate it?
There are thousands of websites and books available that explain this in detail.
Try searching on Google for: rental yield calculator
Since you mentioned tax savings, it would be a good idea to consult a tax advisor. Depending on your willingness and “creative” effort, there are many options available. These range from straightforward depreciation methods to setting up a company abroad, of course assuming your tax liability in Germany is high enough to make it worthwhile.
Okay, since it’s you … otherwise, I usually stay away from the financing section here:
Rental income, yes, that’s part of it. But it’s the combination that matters. And that also includes tax strategies, which in turn involve renovation and maintenance costs.
That’s exactly the idea behind how real estate (or property) fund agents sell rundown properties: with success stories of people who were naive and almost made it out of nowhere: “then you definitely can too!” 🙂
Oh, 200,000 EUR (about 215,000 USD): even as a worn-out old place, it won’t be very large, but maybe it’s enough to divide into small rental units for workers. Properties filled with refugees need a certain size. Simply put: no matter which segment you want to make money in as a landlord, and in which mix (renting, investing & depreciating, etc.), if you have fewer than ten residential units, you’re a small player and can only keep admiring the Bugattis for a long time ;-)
By the way, where is @nordanney? He’s probably the most knowledgeable on this topic here.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
Steffi33 schrieb:
I’ve often wondered how renting works... Do you make returns mainly through rental income? Or is it more about saving taxes somehow? Does it really pay off in the end? Maybe someone here can explain?
Rental income, yes, that’s part of it. But it’s the combination that matters. And that also includes tax strategies, which in turn involve renovation and maintenance costs.
Steffi33 schrieb:
Aha… so it seems pretty simple then...
That’s exactly the idea behind how real estate (or property) fund agents sell rundown properties: with success stories of people who were naive and almost made it out of nowhere: “then you definitely can too!” 🙂
Steffi33 schrieb:
Please explain it to me with an example: I buy (or finance) a house for 200,000 EUR and want to rent it out. How do I achieve a reasonable return?
Oh, 200,000 EUR (about 215,000 USD): even as a worn-out old place, it won’t be very large, but maybe it’s enough to divide into small rental units for workers. Properties filled with refugees need a certain size. Simply put: no matter which segment you want to make money in as a landlord, and in which mix (renting, investing & depreciating, etc.), if you have fewer than ten residential units, you’re a small player and can only keep admiring the Bugattis for a long time ;-)
By the way, where is @nordanney? He’s probably the most knowledgeable on this topic here.
https://www.instagram.com/11antgmxde/
https://www.linkedin.com/company/bauen-jetzt/
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