Can I pay for the property in cash and from my own funds?

Episode 28:

Can I pay for the property in cash and from my own funds?

In today's edition of our video blog you will learn whether you can pay for the property in cash and from your own funds.

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Frequently, capital investors ask themselves

  • Why is it forbidden to pay cash for a property in Germany?
  • What are the advantages of financing part of the investment property?
  • When is it recommended to pay for a property from your own funds?
  • What is the role of remittance in the payment of a property?
  • Why does it make sense to allow the tenant and the tax office to repay the pro-rata financing?

We answer these and many other questions in our video blog editions.

Here is the transcript of episode 28 to read:

Can I pay for the property in cash? No, that is not possible. This is because it is forbidden in Germany to pay for a property in cash for money laundering reasons. Then, of course, there is a suspicion of money laundering. That is why it is usually so and actually always so that even if you have the purchase price cash, you will of course do it by a bank transfer. Because if the notary informs you that the priority notice of conveyance is registered in the land register and the land register is free of encumbrances for you and the notary and you have the security to pay the purchase price safely, then you will not do it in cash in any case, but by a bank transfer.

But joking aside. You ask whether you have to finance a property if you have enough money, or whether you can also pay for the investment property from your own funds. Of course you can do that too, but the better leverage is if you finance at least a part of it. Because if you bring in a lot of equity, you get particularly favorable loan conditions and can have the loan repaid by the tenant and the tax office.

And if you do the math, you will very often come to the decision that even if you could pay for the property in cash, you would not do it, but probably prefer to buy two properties, pay half of both and the other half of the tenant and the tax office about the repayment of the pro rata financing settled. But in principle, there is nothing against also paying for a property from your own funds, but please do it by bank transfer for money laundering reasons.

Real estate, pay cash, money laundering, transfer, own funds, investment property, loan, tenant, tax office, repayment