Why do you invest in property??

176 posts in this topic

16 hours ago, KimKim said:

The day i retire is the day i will die.

Some are born to retire, some achieve retirement, some have retirement thrust upon them.

If I were you, I'd stay healthy.

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I don't think it's any of your concern what people do with their time when they retire.  Most people actually do need to have a stash of money or some kind of income when they can't (or don't want to) work in their chosen field any longer, and for some, a rental property provides needed income.  Not your thing?  Whhhaaaaatever.

 

your posts are getting tedious

 

 

 

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On 1/20/2018, 11:28:29, Petro6golf said:

 

 

My wifes father is quite the real estate guru He started out owning one home outright. He used the home he owned as leverage to get a loan from the bank to buy an apartment to rent out. basically as he sums it up, he gets a loan for 100k ish against his original home, buys an apartment for 100k and rents it out. after the mortgage is paid along with all fees and he collects his rent he profits about 250 euro a month. He does this again and again until he owns 8-10 apartments and profits about 2000-2500 a month. He says the money is not in one apartment but in owning a dozen

 

I'd be curious to know if he holds them in his name or in a Vermoegensverwaltende GmbH or Asset Mangement GmbH. The reason is once you own more than 3 or 4 units the tax rules change it becomes less advantageous to hold them in your own name. 

 

 

 

 

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1 hour ago, Tim Hortons Man said:

I'd be curious to know if he holds them in his name or in a Vermoegensverwaltende GmbH or Asset Mangement GmbH. The reason is once you own more than 3 or 4 units the tax rules change it becomes less advantageous to hold them in your own name. 

 

Nope, only when you sell more than 3 objects within a 5 year period: http://www.finanztip.de/gewerblicher-grundstueckshandel/

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19 hours ago, KimKim said:

What do you do all day long when you retire?

Tend to the garden? hobbies? reading?

 

Anything we want. I spend time in the U.S. visiting family, hibernate for a while in Munich when the weather is crap and then spend 6 or 7 months on our boat in the Adriatic. I also get to go visit friends in the Pacific Northwest ever couple of years. Himself goes on motorcycle tours with friends and music meetups with like minded accordion players. A pretty full life in my opinion.

 

Couldn't do much of that without having saved all of our lives for retirement and our little rental apartment which, as I said, pays our marina fees for our boat.

 

I'm always happy to hear when people have jobs that they love so much that they don't want to stop working. I think that is ideal.

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1 minute ago, fraufruit said:

 

Anything we want. I spend time in the U.S. visiting family, hibernate for a while in Munich when the weather is crap and then spend 6 or 7 months on our boat in the Adriatic. I also get to go visit friends in the Pacific Northwest ever couple of years. Himself goes on motorcycle tours with friends and music meetups with like minded accordion players. A pretty full life in my opinion.

 

Couldn't do much of that without having saved all of our lives for retirement and our little rental apartment which, as I said, pays our marina fees for our boat.

 

I'm always happy to hear when people have jobs that they love so much that they don't want to stop working. I think that is ideal.

Wonderful post!  I enjoyed my profession in Health care immensely, and it took me some time to adjust to retirement. But now I can do what I want- or not! 

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18 minutes ago, fraufruit said:

I'm always happy to hear when people have jobs that they love so much that they don't want to stop working. I think that is ideal.

 

Yup, I think it's brilliant that KimKim enjoys working so much that retirement is not a goal, but your version on the boat also sounds idyllic.

 

I have an oldie who is a widow, her kids and grandkids live away, and she continues with her music teaching part time - for her this is what gives life purpose. She is well over 70, and gets marvellous enjoyment from her work which she loves. 

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1 hour ago, Tim Hortons Man said:

 

I'd be curious to know if he holds them in his name or in a Vermoegensverwaltende GmbH or Asset Mangement GmbH. The reason is once you own more than 3 or 4 units the tax rules change it becomes less advantageous to hold them in your own name. 

 

 

 

 

 

I dont know the answer to that. He is a tax person here (forget the name in german) so im gonna guess he knows all the ins and outs of how to get the most out of his tax situation. He owns them here in Germany in the Frankfurt area. 

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4 hours ago, PandaMunich said:

 

Nope, only when you sell more than 3 objects within a 5 year period: http://www.finanztip.de/gewerblicher-grundstueckshandel/

Edit: Pandamunich you must be a mind reader I was half way through posting this comment (half finished)

 

Thanks, I meant to write, "my understanding is", anyways what is the reason behind holding property in a GmbH. I've asked around but I've been getting conflicting answers on this one. In Understanding German Real Estate Markets, they devote a whole chapter taxation of a asset management GmbH but they don't explain the reasons behind it.

 

 

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15 minutes ago, Tim Hortons Man said:

 

Thanks, I meant to write, my understanding is, anyways what is the reason behind holding property in a GmbH. I've asked around but I've been getting conflicting answers on this one. In Understanding German Real Estate Markets, they devote a whole chapter taxation of a asset management GmbH but they don't explain the reasons behind it.

 

 

I’ve been meaning to ask, how many properties do you/have you actually own in Germany? Did you write your book out of experience?

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1 hour ago, PandaMunich said:

It can mean less inheritance/gift tax if you leave/gift them (if that GmbH fulfills certain conditions): http://www.roedl.de/themen/erbschaftsteuer/erbst-reform-wohnungsunternehmen-profitieren

Thanks, the reason this interests me is this quote from the book Understanding German Real Estate Markets caught my attention "The German tax environment for inbound German real estate investments offers considerable opportunities for international investors". Where I was confused on was the fact you pay a 15% tax at the corporate level and another 25% if you take the money out as dividends (plus solidarity tax). Doesn't seem like much of a bargain. 

 

An interesting tidbit from Garth's latest column. He was commenting about the insanity in the Australian property market and how it compares to Canada. The big reason why it's so insane is nobody cares if you make money and losing money is actually better as, negative gearing as he calls it " Investors can deduct unrestricted losses from other sources of income, including employment, rents or investment returns" he goes on to say, "In Canada, by the way, investors can write off expenses associated with owning a property from the revenue it produces, but not from wages. Rental activities are considered to be “passive”, and a loss on a passive activity isn’t deductible against non-passive income, like your salary. " Have to say this surprised me as I had always assumed you could do it that way in Canada, after all why else buy property! 

 

BTW My understanding is that in Germany losses, like profits affect the taxes you pay. Had many discussions around this with my steuerbreater but never specifically asked him this. Always assumed yes. 

 

1 hour ago, mtbiking said:

I’ve been meaning to ask, how many properties do you/have you actually own in Germany? Did you write your book out of experience?

 

I became an accidental landlord 12 years ago when we got relocated to Spain. My wife and I had just bought a place, literally there less than a year and didn't want to sell it so we rented it out. When we moved back we decided to buy two more units as it worked out so well. The second reason was seeing too many comments like this, which I think represent the tip of the iceberg

 

Quote

 

Hi

If anyone can help me, it would be great. I bought an apartment in Berlin a few years ago. For various reasons (not understanding how short term lettings work, nor how the electricity and water are charged, as well as paying interest) my expenses have exceeded the income

 

 

It's not complicated but it is very different here. The hardest part of the book has been taxation, getting the right balance of offering pointers while not offering advice (not a steuerbreater) is proving challenging. That and you want to avoid mistakes like my comment above, hence so many questions here and elsewhere. BTW I've got two short books coming out shortly, one 75 tips for landlords and other a guide to renting in Germany, both will be 99 cent books on Amazon. The main book about 6 weeks after that. 

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@KimKimwe actually took mortgage with zero down for the rental property, so it’s possible. Just ask your bank about it. If you earn well, have some assets (your new business could be one), have supportive Hausbank, why not. I might suggest lock the mortgage interests for 10 years though, we never know how long this low rate will last, may as well make the best out of it.

@Tim Hortons Manyes Riester and some index funds are checked off too. I might get another rental if this one works well, we’ll see. 

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On 21.1.2018, 00:27:20, KimKim said:

What do you do all day long when you retire?

Tend to the garden? hobbies? reading?

 

Yes, yes and yes and instead of playing the markets for someone else, I do it for myself. I "retired" quite some time ago, I can choose whether to spend X number of hours per day / week / month / year " working" or not.

Currently I am overseeing the renovation of two properties, watching and playing the markets and dual overseeing our extended family. End of May ( roundabouts ) I dissapear on a small motorsailer to Shetland, Faroes, Iceland Jan Mayen, Bjornoya, Spitzbergen and back . If all goes well, between 2-5 months depending on what we cut out or add under way.

 

Retiring doesn't mean sitting doing the knitting or twiddling your thumbs, although it can do if you want it too

On 21.1.2018, 00:27:20, KimKim said:

i like working very much, i love it

 

So do I , the good part about "retirement " though is being able to choose to or choose not to. It rather removes the major part of the I must / have to work

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I'd be curious to know if any of you early retirees have children. We are slightly under 40 and could more or less retire now and live simply as we've accumulated a lot of wealth in the last 10-15 years of work. With two small children in the household  it is out of question, though.

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3 minutes ago, mtbiking said:

I'd be curious to know if any of you early retirees have children. We are slightly under 40 and could more or less retire now and live simply as we've accumulated a lot of wealth in the last 10-15 years of work. With two small children in the household  it is out of question, though.

 

Yes. quite a few from both sides, youngest is 15 though &  all the rest are 17 and over

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I have one grown son.

 

Could one of you retire and watch the kids and save the daycare money? Being American, the biggest expense with kids was saving up for their educations but that is free here.

 

(Unfortunately, neither one of my sons chose to go to university. More for us^_^)

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Yeah, one of us could stop working. But our current plan is to work normally for the next 10-12 years, invest the extra money along the way and then reduce the work hours drastically, or at least be able to. 

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