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

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

Here is the transcript of episode 28 to read through:

Can I pay for the property in cash? No, that is not possible. For reasons of anti-money laundering, it is prohibited in Germany to pay for a property in cash. That would naturally give rise to a suspicion of money laundering. Therefore, it is usually the case, and virtually always the case, that even if you have the purchase price in cash, you will naturally make the payment by bank transfer. Because once the notary announces that the caution has been entered 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, you will definitely not do that in cash, but by bank transfer.

All joking aside. You are asking whether, if you have enough money, you must necessarily finance a property or whether you can also pay for the property investment using your own funds. Of course, you can also do that, but the better leverage is if you then finance at least a part of it. Because if you put in a lot of equity, you get particularly favourable loan terms and can have the loan paid back by the tenant and the tax office.

And if you have that calculated precisely, you will very often come to the decision that even if you could pay for the property in cash, you wouldn't do it, but would probably prefer to buy two properties, pay for both in half and have the tenant and the tax office take care of the other half through the repayment of the proportionate financing. But fundamentally, there's nothing to be said against paying for a property from your own funds either, though please do so by bank transfer for anti-money laundering reasons.

Keywords:
property, pay in cash, money laundering, bank transfer, equity, buy-to-let property, loan, tenant, tax office, repayment