We convey real estate investments in shares as an important brick for a diversified investment. Real estate has the advantage that the land register offers a high degree of security, and that the price formation often shows long-lasting upward movements. On the other side, one cannot carry away a realty in times of crisis, and prices are the subject of speculation and political influence.
Three proven options are available to the investing public. They all are suitable for long-term investments only.
The house builders’ model
This is understood as a civil law form of utilization of tax advantages and of obtaining subsidies, in which several clients join for the purpose of establishing and financing a residential or commercial property.
Specialized enterprises provide for purchase, development, permits, construction management, financing, promotion, etc. and invite investors to contribute to the project with a certain amount. The term is many years, in the end, the investor has earned his house share about half the money.
The investor gets his entry into the land register with his proportional share, thus not with a linking to a certain dwelling.
By this one understands an investment object, which brings long-term profit by renting. It is unsuitable for own use. Through proven financing options, the acquisition of a retirement home is possible even with low equity capital. The buyer is entered in the land register and generates regular income through inflation-secured rents. Ideally, the apartment is in a new building project, since it allows the purchase free from VAT directly from the developer.
Real estate funds, real estate shares
Real estate funds enable investors to invest in relatively small amounts of real estate. There are open-ended real estate funds, which include a real estate portfolio that changes or generally grows through acquisitions, and closed-end real estate funds, which have a fixed portfolio and are often project-based.
Real estate shares are shares of stock corporations whose business purpose is the trading and management of real estate.
Trading usually takes place at a stock exchange; a registration of the investor in the land register does not take place.