ᐅ Multi-family residential building as an investment property in a city with an aging population
Created on: 2 Oct 2016 12:08
M
MaxPower90
Hello everyone, my concern is not directly related to building a house, but maybe some of you will find it interesting and want to join the discussion, which I would appreciate. Given the low interest rates and the fact that I have saved some equity, I am planning to buy 3 to 4 smaller condominiums to rent out, or even better, a small multi-family building.
I come from the Ruhr area and want to buy in this region as well. Of course, with a property, just like with a nice vacation, I want good value for money. At first glance, for example in Herne, you can find properties without maintenance backlog yielding around 7% net annual rental return. In my opinion, this high return is linked to the fact that Herne is not an attractive city for any age group. I have reviewed all the population forecasts I could find online, and Herne is aging faster than average and is projected to lose up to 10% of its inhabitants by 2040.
My question to you is: Is investing in a city like this likely to be a losing strategy due to falling property prices and probable vacancies? Or could it also be an opportunity if the micro-location is good (shopping facilities, public transport, parks, etc.) and the building could potentially be converted to be barrier-free in the medium term? Especially considering the attractive rental yield and the fact that retirees, whom I imagine to be “good” tenants, might be the main target group.
I have never bought residential property before and find it really difficult to assess. I look forward to your opinions!
I come from the Ruhr area and want to buy in this region as well. Of course, with a property, just like with a nice vacation, I want good value for money. At first glance, for example in Herne, you can find properties without maintenance backlog yielding around 7% net annual rental return. In my opinion, this high return is linked to the fact that Herne is not an attractive city for any age group. I have reviewed all the population forecasts I could find online, and Herne is aging faster than average and is projected to lose up to 10% of its inhabitants by 2040.
My question to you is: Is investing in a city like this likely to be a losing strategy due to falling property prices and probable vacancies? Or could it also be an opportunity if the micro-location is good (shopping facilities, public transport, parks, etc.) and the building could potentially be converted to be barrier-free in the medium term? Especially considering the attractive rental yield and the fact that retirees, whom I imagine to be “good” tenants, might be the main target group.
I have never bought residential property before and find it really difficult to assess. I look forward to your opinions!
Robby schrieb:
Question: Would I do it again?
Never in my life!!!!!!!!!!!!!
I should have invested that money in a stock portfolio instead. MaxPower90 schrieb:
Great that you had the courage back then to go through with everything. And despite the hassle and time involved, it seems to have paid off financially for you in the end [...] What don’t you understand again? @Robby clearly states that it wasn’t financially worthwhile. You are turning it around 180 degrees and presenting it as a financially profitable investment.
There is no profit to be made here, quite the opposite: she paid a lot of learning costs.
Why is that? Is it simply a reading/comprehension difficulty, or is the idea fixed in your mind that real estate always yields a profit in the end, no matter what?
I have since somewhat changed my plan. Good — now the final step is still missing. Say goodbye once and for all to the (short-term) idea that you are acquiring rental property. Renting out individual units also carries risks in a multi-family building / homeowners’ association, which you simply disregard for the reasons mentioned above.
Build your house, wait 10 years, keep monitoring the market and continue educating yourself. If your tax advisor then tells you in 10 years that purchasing a multi-family building (at least 6 residential units) makes sense for you, reconsider and get a competent expert to assess the properties in question.
At the moment, in every way and in your best interest, you really should be advised against it.
Best regards
Dirk Grafe
Dirk Grafe schrieb:
... Mathematics is not a humanities subject... Incorrect!
Without having read the rest of the thread, I have to object here as a graduate mathematician:
Mathematics belongs to the humanities, not the natural sciences
(this is why one branch of high school is called "mathematics and natural sciences"; if math were a natural science, that would be redundant)
So I am a humanities scholar, not a natural scientist
(By the way, I only learned this fact in my second semester *g*)
I just had to correct this.
And: all this calculating has nothing to do with math; that is arithmetic, and physicists, economists, and elementary school teachers can usually do that better. Math is logic; we prove why something is the way it is, but we would never actually calculate it!
According to the latest definition and my current understanding, mathematics is neither classified as a humanities subject nor as a natural science.
Which makes sense, because what does art history have to do with mathematics?
I generally consider calculations unnecessary in cases like this, but I do them anyway to highlight the error. What is happening here is the incorrect interpretation of a word problem—terms are misunderstood and therefore converted into mathematically incorrect operations. By the time this is explained in a forum, the contradiction has usually been calculated three times, and anyone who still sees a positive number in -5 can only be helped with art history.
So, I am completely in agreement!
Which makes sense, because what does art history have to do with mathematics?
I generally consider calculations unnecessary in cases like this, but I do them anyway to highlight the error. What is happening here is the incorrect interpretation of a word problem—terms are misunderstood and therefore converted into mathematically incorrect operations. By the time this is explained in a forum, the contradiction has usually been calculated three times, and anyone who still sees a positive number in -5 can only be helped with art history.
So, I am completely in agreement!
Hmm, I studied in Munich, and there:
3w.mathematik.uni-muenchen.de/festschrift/node4.HTML [Link edited by Mod Dirk Grafe]
Mathematics is probably found more often in the humanities there.
It is definitely not considered a natural science because natural sciences are defined based on observations, measurements, and experiments. This does not apply to mathematics.
I did some reading and came across the term "structural science," which in my opinion fits well:
The question of which category of sciences mathematics belongs to has been debated for a long time.
Many mathematical questions and concepts are motivated by natural science issues, for example from physics or engineering, and mathematics is used as an auxiliary science in almost all natural sciences. However, it is not itself a natural science in the strict sense, since its statements do not depend on experiments or observations. Nevertheless, recent philosophy of mathematics assumes that the methodology of mathematics increasingly corresponds to that of natural sciences. Following Imre Lakatos, a "renaissance of empiricism" is suspected, according to which mathematicians also formulate hypotheses and seek confirmations for them.
Mathematics shares methodological and substantive similarities with philosophy; for example, logic is an overlapping area of both disciplines. Therefore, mathematics could be classified as a humanities discipline, but the classification of philosophy itself is also controversial.
For these reasons, some classify mathematics—alongside other disciplines such as computer science—as a structural science or formal science.
At German universities, mathematics usually belongs to the same faculty as the natural sciences, and after a PhD mathematicians generally receive the academic degree Dr. rer. nat. (Doctor of Natural Sciences). In contrast, in the English-speaking world university graduates receive the titles Bachelor of Arts or Master of Arts, which are actually awarded to humanities graduates.
(From Wikipedia)
I found this summary here the best; other articles would go beyond the scope here.
3w.mathematik.uni-muenchen.de/festschrift/node4.HTML [Link edited by Mod Dirk Grafe]
Mathematics is probably found more often in the humanities there.
It is definitely not considered a natural science because natural sciences are defined based on observations, measurements, and experiments. This does not apply to mathematics.
I did some reading and came across the term "structural science," which in my opinion fits well:
The question of which category of sciences mathematics belongs to has been debated for a long time.
Many mathematical questions and concepts are motivated by natural science issues, for example from physics or engineering, and mathematics is used as an auxiliary science in almost all natural sciences. However, it is not itself a natural science in the strict sense, since its statements do not depend on experiments or observations. Nevertheless, recent philosophy of mathematics assumes that the methodology of mathematics increasingly corresponds to that of natural sciences. Following Imre Lakatos, a "renaissance of empiricism" is suspected, according to which mathematicians also formulate hypotheses and seek confirmations for them.
Mathematics shares methodological and substantive similarities with philosophy; for example, logic is an overlapping area of both disciplines. Therefore, mathematics could be classified as a humanities discipline, but the classification of philosophy itself is also controversial.
For these reasons, some classify mathematics—alongside other disciplines such as computer science—as a structural science or formal science.
At German universities, mathematics usually belongs to the same faculty as the natural sciences, and after a PhD mathematicians generally receive the academic degree Dr. rer. nat. (Doctor of Natural Sciences). In contrast, in the English-speaking world university graduates receive the titles Bachelor of Arts or Master of Arts, which are actually awarded to humanities graduates.
(From Wikipedia)
I found this summary here the best; other articles would go beyond the scope here.
Dirk Grafe schrieb:
Which also makes sense (sic!), since what does art history have to do with mathematics?
But philosophy has a lot to do with it!!!
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