Buying real estate on credit is no problem for most investors. It’s different with stocks. If you link it correctly, a Porsche can even jump out.
When it comes to paying for rented property, most investors have little fear of debt. It looks very different with stocks. Here investors have the feeling that they are entering into a pact with the devil if they resort to credit. I can only explain the matter with the different evaluation of the two types of investment. A property is considered safe and 1,100 shares are considered unsafe, and little thought is given to linking the contracts – that is, property plus credit and shares. Can I use the following example to show you how high the return on this trio is?
Please imagine an investor who is 55 years old and has 500,000 euros in the account. The cash is to be invested for 15 years, and the first choice is a property that costs one million euros. Of this, around 300,000 euros go to the property, around 600,000 euros to the building and around 100,000 euros to ancillary costs. The value of the property is to increase by 1 percent every year, so that the property can be sold for around 1,045,000 euros in 15 years. The yield is 4 percent a year or 3,000 euros a month, and rents are also expected to increase by 1 percent every year.