You want to build/buy and finance a rented property? Then you should consider in your planning that banks and savings banks increasingly higher Creditworthiness requirements with the financing of sog. Investment property. This applies to your creditworthiness (income and assets) but also to the amount of equity you need to invest. Please do not let yourself be blinded by the hollow sayings of many sog. "Real estate coaches" who want to tell you that one can become rich with real estates also with small income and without own means.
If you want to buy and finance a rented property, you should basically meet the following requirements:
income conditions
If you want to invest in a rented property, you need the appropriate financial background. This is especially true for your income situation. Your income – for example from your employment – must be sufficient to cover vacancies and ongoing maintenance over a longer period of time. To find out whether this works, do a simple cash flow analysis for the property and see whether and for how long you can meet the expenses (loan installment incl. Repayment, operating costs, maintenance. ) even without rental income can carry. If this is not the case, you should keep your hands off the property!
Many banks have meanwhile -for good reason- minimum income requirements for capital investors (even if there are currently still no legal requirements / specifications). Accordingly, you should, for example, have a minimum annual income (usually well above 40.000 Euro for single persons or. 60.000 Euro for married persons). This minimum income means the taxable income (not the gross or net income). In addition, banks pay more attention to the so-called. Debt-equity ratio, i.e. the ratio of sustainable income and the sum of all loan obligations.
Tip: a bank or intermediary without minimum requirements for capital investors is not "particularly flexible", but if necessary. simply irresponsible. Please also note that banks always calculate with lump-sum expenses/costs that do not necessarily have anything to do with reality when checking the financial feasibility! So do not rely on any "budgetary calculations" from banks, intermediaries or even "real estate coaches, but calculate themselves with their own numbers (which should be then however also realistically!).
If you do not have a sustainable income or financial reserves of your own, you should generally refrain from buying a rented condominium, for example. Anyone who believes that they can generate such a sustainable income from a standing start today with predominantly debt-financed real estate should watch fewer YouTube videos in the future!
financial circumstances
First of all, you should have a positive balance of assets. This means that the sum of your existing assets must be greater than the sum of your existing liabilities. If this is not the case, you do not need to worry about the purchase or the. the financing of rented real estate no further thoughts make. It is also completely irrelevant whether your main job is 1.500 or 10.000 per month in your main job.
In addition to a balance sheet that is at least in equilibrium, you should also have sufficient reserves and contingency funds to cover rent defaults and, if necessary, any other risks. also be able to bear the maintenance or modernization of the property (otherwise your total disposable income must be correspondingly high). If you are not in a position, for example in the case of a rented condominium, to pay a special apportionment due from z.B. 5.000 Euro (and that is not much) "from the savings book" To be able to pay, you are now once no capital investor.
Whoever believes that a rented property automatically results in a plus in the asset balance is very much mistaken. For example, if I buy a property for 100.I can buy and finance a house with a minimum discount of 90 percent.000 euros, my balance sheet is negative (minus 10 euros).000 euros). By buying several apartments of this type at once, I can very quickly and quite thoroughly screw up my net worth and thus my entire credit rating.
Equity investment: without own capital (almost) nothing works!
If you want to buy and finance a rented property, you are by definition an investor. This term is derived from "invest capital" and thus is not only "the capital of others" (for example that of banks)" meant. As a consequence, this means that you will have to contribute a minimum amount of equity to the total financing. These are in particular the ancillary acquisition costs. If you have a good credit rating, you can finance a rented property without any equity capital at all. However, this also always means that the interest conditions are significantly worse than in a financing with equity investment.
A popular argument for wanting to use little or no equity is the issue of taxes ("For tax reasons, I want to use as little equity as necessary!"). There may well be tax constellations in which this is a real argument, but in most cases it is simply nonsense. What sense does it make to pay one Euro of interest to a bank, only to get back no more than 20-30 cents through taxes?? Exactly, none!
Small summary
Without sufficient creditworthiness, you should generally keep your hands off the purchase of rented properties. The answer to the question of whether your creditworthiness is sufficient should not be left to banks, brokers or even self-appointed "real estate coaches" leave. Switch on your head and calculate yourself, whether you can afford a rented property in the long term and want to. Real money you will earn with the real estate only in the moment, in which this is paid off.
We are happy to help you with the financing of your investment property. And perhaps you have noticed while reading this article that it is not our own business that is in focus, but your interests.