Tips for the final purchase decision!
In today's edition of our video blog you will learn tips for the final purchase decision!
Start the video here:
Frequently, capital investors ask themselves
- How important is it to find a perfect compromise in your real estate search?
- Why is it fatal to wait two years for a supposedly better object?
- What are the financial implications of not generating rental income for two years?
- Why is it crucial that time works for you and the tenant pays back the property monthly?
- Is there a property where everything fits 100 %
We answer these and many other questions in our video blog editions.
Here is the transcript of episode 23 to read:
If everything is professionally clarified and you have selected a property on the basis of the checklist, by having professional advisors at your side and everything fits and is calculated, the day comes when you have to make a final decision. I have made the experience that there is no property in the world where everything fits to 110 %. You will always have to compromise. The task is to find the smallest possible compromise.
Here's an example I've had many times in my own real estate purchases: I have a great location, a profitable property, where everything is wonderful - story, property, numbers, everything fits. And then I sell 20 apartments in that location in that property, and at some point a client tells me, "Martin, everything fits... But the apartment only has a north-facing balcony." In such cases, I have often handled it in such a way that I buy the apartment myself if the customer does not take it because of the balcony. In my life, this has always worked out, because there is no such thing as a "perfect match." You will never find a property where everything fits 110 %. You will always have to compromise.
The most important thing in life and in real estate is that you get the horsepower on the road, that time works for you and that the tenant pays back the property for you every month. So if you have the right property, but the balcony faces north or anything small is still missing, you should not underestimate it. It would be fatal to wait two years to supposedly find a better property.
Because in these two years, the purchase prices have already increased due to inflation. This means you have missed 24 months in which the tenant would have paid off the property for you month after month.
Let's assume that the tenant pays 750 € rent per month, i.e. 9,000 € per year net, and you have missed two years, then 18,000 € rental income is missing! You have to make up for this later. That means the financing will take longer. You will be finished later and older when the property is paid off. Therefore, look for a perfect and great property, but don't look for a property where more than the necessary is right, where it fits 110 %. That will never happen in life. You will always have to compromise a little as well. And if you do that, you can be well on your way.
Property,Compromise, Checklist, Rental income, Time, Balcony, Financing