Investing in real estate is now more than ever the focus of interest for many investors. This is being driven by a global real estate boom, which is pushing up both demand and real estate prices. But how can you invest specifically in investment properties? And how can you use this dynamic form of investment to grow your money effectively?
It is necessary for interested parties to inform themselves sufficiently about the real estate business, because there is a lot to consider and think about with this type of investment. We offer you the most important facts in a nutshell and introduce you to the world of real estate investments. Our aim is that by the end of our question-and-answer session you will have gathered enough information about why real estate can be an attractive investment option for your portfolio.
Questions about FGI
In which countries is FGI primarily active?
At Flum Global Investments we are currently investing primarily in Dubai and Zanzibar – two locations that each offer unique advantages.
Dubai is characterized by its dynamic economy, strategic location as a global business center and high demand in both the residential and commercial real estate sectors. Dubai offers a high quality of life, advanced infrastructure and is known for its security and political stability. Investors are also attracted by tax incentives and the opportunity to acquire full ownership of real estate.
Zanzibar is experiencing growing interest among real estate investors thanks to its strong growth in the tourism sector and its rich culture and history. The archipelago offers pristine beaches and a growing infrastructure that makes it particularly attractive for investment in hotel and leisure properties.
The government of Zanzibar has introduced investment incentives to attract foreign capital. Together with the relatively low property prices and the increasing demand for tourist accommodation, Zanzibar is establishing itself as an attractive market for investors.
When deciding which countries to invest in, it is important to conduct comprehensive due diligence and take into account the long-term perspectives of the market. We use our extensive expertise and network to identify and exploit the best investment opportunities in these dynamic markets.
How are foreign properties managed?
FGI offers you a 360-degree service for the management of your foreign property. This includes, among other things, the rental, management and maintenance of your properties. Our goal is to provide you with a worry-free investment by taking care of all aspects of property management for you. So that you have enough time for the important things in life.
Why should I choose FLUM GLOBALE INVESTMENTS?
Flum Globale Investments stands for expertise and reliability in the real estate market. With our extensive market knowledge and our access to first-class properties, we offer our customers tailor-made investment solutions.
Whether you are looking for stable sources of income, potential for appreciation or sustainable investment projects, our goal is to exceed your financial expectations and accompany you through the entire investment process. Choose Flum Global Investments for a partner characterized by transparency, innovation and a strong focus on customer satisfaction.
Are you ready to secure your future with real estate and achieve exceptional returns? Discover your options now and start your investment journey with us.
General questions about real estate investments
Why should you invest in real estate?
Today it is no longer possible to generate wealth through the classic savings account. A different investment strategy is required. A real estate investment is attractive for several reasons, not just because of the stable and attractive returns that can be generated through rental income and appreciation. This type of investment is also considered safe because it offers an opportunity to diversify the portfolio.
Diversification explained
Diversification in this context means spreading the riskby invested in various real estate asset classes. Instead of putting all your capital into a single form of investment, you spread the real estate investment across different properties. Real estate is considered an independent asset class that often moves independently of the stock markets. By investing part of your capital in real estate, you can reduce the overall risk of your portfolio. Because not all asset classes react negatively to economic changes at the same time.Resilience of the real estate market
The resilience of the real estate market to economic fluctuations is another reason why real estate is considered a preferred form of investment. Stock markets, for example, can often react unpredictably to short-term economic news and events. Real estate markets tend to be more stable. This is because, among other things, the value of real estate is influenced not only by the current market situation, but also by long-term factors such as location, demand and infrastructure. In addition, changes in the real estate market usually take more time, which gives investors the opportunity to react to changes.What are the main advantages of real estate investing?
Real estate investments offer the chance for continuous sources of income through rental income, capital growth, tax advantages and the opportunity to have a direct influence on your investment. They represent physical security and can help diversify your investment portfolio.
- Continuous sources of income through rental income One of the biggest advantages of real estate investing is the ability to generate regular income by renting out the property. This source of income can help cover ongoing costs and also provides additional income in addition to any salaries or other income. Over time, rental income may even increase due to market developments and increasing demand.
- Capital growth Real estate has the potential to increase in value, which is known as capital growth. This increase in value can be influenced by various factors such as the development of infrastructure in the area, increasing demand and general market trends. Over the long term, real estate has historically shown positive performance, making it a solid investment for investors.
- Tax benefits Real estate investments offer various tax advantages that may vary from country to country. Expenses related to owning and managing the property, such as interest on real estate loans, maintenance and operating costs, can often be deducted from tax. In addition, in some countries there are depreciation options that can be used to reduce taxable income.
- Direct influence on the investment Unlike other forms of investment such as stocks or bonds, a real estate investment allows investors to have a direct influence on the value and return on their investment. Owners can actively contribute to increasing the value of the property through renovations, conversions or changes to the tenancy agreement.
- Physical Security Real estate represents a physical and tangible asset that is perceived as particularly secure in contrast to virtual or paper-based assets. Investing in “real” values offers many investors a feeling of security.
- Diversification of the portfolio Including real estate in an investment portfolio can help spread risk. Because real estate markets often react differently to economic changes than stock or bond markets, a real estate investment can help reduce the overall risk of the portfolio.
What are the first steps to invest in a property?
Before you invest in real estate and thus enter the real estate industry, you should do thorough market research perform. This includes analyzing investment areas to identify places with high growth potential and strong demand. A basic understanding of local market dynamics, such as supply and demand, as well as future development plans of the region are also important.
After market research, you should check your financing options for buying a property and make one Carry out comparison. These include traditional bank loans, building savings contracts or the use of equity capital. A solid financial plan that takes into account your investment goals, timeline and budget is the ideal strategy for success. It is also advisable to familiarize yourself with the basics of real estate law and, if necessary, seek professional advice.
How much money do I need to invest in real estate?
The amount of capital required for a real estate investment varies considerably and depends on several factors. Among other things, it depends on the type and location of the property as well as your individual investment strategy. Some investors get into real estate crowdfunding or REITs (Real Estate Investment Trusts) with a smaller amount.
Others, however, usually require higher initial capital. In addition to the purchase price, initial costs such as notary fees, property transfer tax and possible renovation costs must also be taken into account. Solid financial planning and consideration of all costs involved should form the basis for avoiding unpleasant financial surprises.
What types of real estate investments are there?
Real estate investments cover a wide range of options: from direct investments in residential or commercial properties to indirect forms of investment such as real estate funds or REITs, there is something suitable for every buyer. Direct investments offer the opportunity to become the owner of a physical property, be it a single-family home, an apartment, an office building or a retail store .
Indirect real estate investments, on the other hand, allow investors to invest in real estate portfolios without having to worry directly about buying, managing or selling the property. Each type of investment has its own risks and rewards, and the choice depends on your financial goals, risk tolerance and commitment to property management.
Should I invest in residential or commercial real estate?
Deciding between residential and commercial real estate also depends on your investment goals, risk tolerance and available capital. Residential properties, such as houses and apartments, typically offer more stable sources of income through long-term rental agreements and are easier to manage.
Commercial real estate, including office buildings, retail spaces or warehouses, can offer higher returns but require a deeper understanding of the market, larger initial investments and are often more dependent on the depending on the economic situation. Both options have their advantages and require careful assessment of your personal situation and market research.
How do I finance a property abroad?
Financing a property abroad can be complex. It requires, among other things, understanding and navigating the financing options and requirements in another country. Options include local bank loans in the destination country, use of lines of credit from your home country or international financing solutions.
It is important that you understand the meaning of interest rates, the loan terms and possible tax implications. It is therefore essential to plan carefully and, if necessary, consult with a financial advisor who has experience with international real estate investments. This will help you develop the best financing strategy for your needs.
Where to invest in real estate - in which country?
The choice of country for your real estate investment depends on various factors such as the real estate market, political stability, economic situation and expected return. Countries with a strong real estate boom, solid growth forecasts and favorable tax conditions are often attractive destinations for investors.
How does the situation affect real estate investments?
The importance of location for real estate investment cannot be overemphasized. It is often the most important criterion that can determine the success or failure of an investment. An advantageous location not only offers high development potential.
It also offers access to important infrastructure such as transport links, shopping facilities, medical facilities and educational institutions. These factors play a decisive role in the quality of life and therefore in the attractiveness of the property for potential tenants or buyers.
- Development potential Areas that benefit from urban development plans or where new infrastructure projects are planned can see a significant increase in value. Investments in such emerging areas can achieve high returns in the long term.
- Access to infrastructure Good transport connections, be it to public transport or main roads, significantly increases the attractiveness of a property. Equally important are the proximity to shopping, leisure activities and medical facilities, which contribute to the overall quality of life.
- Proximity to workplaces Areas near business centers or industrial parks are particularly attractive to working people, which can increase demand for housing and therefore rental and sales prices.
- Educational institutions Proximity to good schools and colleges is an important factor for families and can significantly influence property values. Properties in school districts with good reputations are often more desirable and fetch higher prices.
Are real estate investments risky?
As with any investment, real estate investing involves risks, but these can be minimized through careful planning and market research. Risks include market fluctuations, unexpected repair costs, risks due to vacancies and losses in value. Therefore, a well-considered selection of properties and solid financing are fundamental to reducing risks.
How can I minimize the risk when investing in real estate?
A thorough market analysis, Diversification of the portfolio, investment in quality and solid financing can minimize the risk. In addition, choosing the right property based on location, condition and potential for value appreciation is crucial. Professional management of your property can also help reduce risk.
How do open and closed real estate funds differ?
Open-ended real estate funds allow investors to buy and sell shares in real estate at current market prices. Closed real estate funds, on the other hand, can offer higher returns in certain market phases.
Open-ended real estate funds
Open-ended real estate funds offer high flexibility and liquidity. Investors can buy or sell shares in these funds at any time. The price of the shares is usually based on the net asset value (NAV) of the fund on a daily basis. These funds invest in a wide range of real estate and enable the Investors to enter the real estate market with relatively low capital investment. Diversification within the fund can spread the risk, but the return opportunities are often linked to the general market and can fluctuate in volatile market phases .Closed real estate funds
Closed real estate funds, on the other hand, are aimed at specific projects or real estate investments. You have a predetermined investment amount as well as a limited number of shares . After all shares have been sold, the fund will be closed and no further shares will be issued. Investors typically commit to a fixed termwhich means that their capital investment is less liquid. The advantage, however, lies in the possibility of investing specifically in selected projects that potentially promise higher returns, especially if these projects are successful developed and managed. The return on closed-end funds depends heavily on the success of the individual project, which brings with it both opportunities and risks. Both types of funds enable private individuals to invest in real estate markets without having to purchase a property directly. The choice between an open and a closed real estate fund should be made based on individual investment goals, desired liquidity and risk tolerance. Open-ended funds can therefore be a good option for investors looking for flexibility and broad diversification. Closed funds, on the other hand, offer the opportunity to invest specifically in specific projects with potentially higher returns – albeit with higher risk and lower liquidity.What is the “Fix and Flip” Approach to Real Estate Investing?
“Fix and Flip” refers to a strategy in which investors purchase properties with the aim of renovating them and then quickly selling them for a profit. This method requires market knowledge, a good understanding of renovation costs and the right timing for resale to be successful.
“Fix and Flip” approach to real estate investing has been introduced, among others, by popular television shows such as “Top or Flop”, hosted by Tarek El Moussa and Christina Anstead, and “House Flipping” achieved widespread fame with Tarek El Moussa. These shows show how investors buy run-down properties, renovate them, and then sell them for a quick profit.
Viewers gain a small insight into the challenges and successes associated with the fix and flip approach. Above all, about the need to have market knowledge, accurately calculate renovation costs and choose the perfect time for resale. Careful planning and budgeting when investing in real estate contribute to success, as do creative solutions and hard work. So that a dilapidated property becomes a desirable home that can be sold profitably.
The success of these shows has inspired many to get into the fix and flip business themselves. But it also highlights the risks and the need to be well informed and prepared.
How important are legal and tax aspects in real estate investments?
When investing in real estate, legal and tax aspects are of central importance. Our broad network allows us to provide you with an overview of the general legal framework and tax considerations that play a role when investing in real estate. However, if you have specific questions, we always recommend consulting a subject matter expert.
Additional purchase costs - What additional costs are incurred when buying a property?
When purchasing a property, in addition to the actual purchase price, various additional costs must be taken into account, which can significantly influence the overall price of the investment. These additional purchase costs vary depending on the country, region and the type of property, but typically include:
- Real estate transfer tax: This tax is levied on the purchase of land and real estate and varies greatly depending on the country or even region within a country. It is often a significant percentage of the purchase price.
- Notary and land register costs: Notary costs are incurred for notarizing the purchase contract and entering it in the land register. The land registry costs cover the fees for the official registration of the change of ownership.
- Fees for the valuation of the property: A property valuation may be necessary, especially when financing with a mortgage to determine the value of the property. The costs for this are usually borne by the buyer.
- Construction and renovation costs: If renovation work is planned immediately after purchase, these costs must also be taken into account. It is advisable to obtain offers in advance and to plan a buffer for unexpected expenses.
- Insurance: Various insurance policies, such as building insurance or liability insurance, may be required or recommended to protect the new property .
Can you make money with real estate and what is a good return on real estate investments?
As a small guide to assessing the profitability of real estate investments: A good return depends on the type of property, the location and the current market conditions. In general, returns between 4-6% are considered solid.
However, higher returns are possible in certain markets or with specific investment strategies. It is important that the return covers your costs and provides a reasonable profit margin. For foreign properties, returns of between 5-10% can be expected, depending on the location and quality of the property.
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