Today somebody asked my if I do own real estate, this questions in mind I wrote this post:
Actually as I mentioned in the past brokers who do not own real estate in Germany could be a big problem, especially because they do not know what problems the investor/buyer might face in the future.
Don’t get me wrong this is not about real estate ownership, its about knowledge.
Brokers often do not own one single flat, but think they can advice their clients on real estate investing.
Most of them are young and just a couple of years (or even month) in business.
Their approach is based on guessing and theory, because they have not experienced what it takes to run (their own) property investments properly. On top many brokers are foreigners and have no clue about legal issues in Germany. It just happened to one of my clients, that a non-german speaking broker sold a building to him and has not done the Due-Diligence right, because he just did not understand the papers presented to him.
But this is just the sales/buying process.
The real problem(s) with real estate occur often long after the purchase, sometimes even years after (while you try to sell it).
Most problems are of technical or legal nature, but brokers and investors often just think about returns and how the area might improve (capital gains/capital appreciation).
A technical or legal problem can generate bills in the region of thousands of Euros and if you put your income of the property against it, its clear that in this and maybe in the upcoming years your yield is zero or even negative.
But back to your question:
Do I personally own real estate ?
No, I don not own any real estate personally.
That has to do with my personal refinancing method, tax structure and especially with the situation that I am an entrepreneur with a family of four.
To protect my assets and my company from legal and tax issues I own real estate through companies.
But more important than that is that I have 20 years experience when it comes to real estate investments in Germany.
That is important, you could own 20 buildings, but as long as they are managed by somebody else you will not get as much experience as working on your own real estate.
I work on my own property and on my clients property.
Because we advice and supervise the assets of our clients after the purchase.
And this generates massive knowledge and practice what can happen in real estate investing.
We can give references any time, just ask.
And we will introduce serviceproviders that know their business and have tons of experience in real estate,
as there are real estate lawyers, real estate accountants, notary offices.