Due to the low market interest rates, investors have a hard time. Especially as there is still the danger of a crash of the euro. Given these circumstances, it is no surprise that many individuals are considering buying real estate. They want to invest in real assets, because they enjoy the reputation to offer particularly good inflation protection.
But it’s not always about saving money safely. Because of the low mortgage rates, real estate is also invested, even though capital is scarce. The attractive interest rates make it possible to borrow even larger amounts of money without increasing the financing costs too much.
However, such an environment can be very tempting. Even households with very low savings start investing in real estate. However, such projects can be very risky – despite low interest rates, there is a risk that substantial loan installments will be due.
Often, the rates are covered by the rental income without any problems, but it must not get the rental loss. If this happens, it is possible that every owner will be able to continue to use his real estate loan.
Especially since the market prices should not be misjudged. In many regions, real estate prices have already risen sharply due to high demand. Possibly now is bought expensive – who wants to sell in a few years may have to sell at a lower price.
Real estate investments should therefore be made only if one is really sure of his or her framework conditions consistently. If you only jump on a trend, you take a risk whose effects should not be underestimated. When in doubt, it is always better to make a little more capital and buy it later.
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