The return on an apartment building

The return is very important if you want to invest in real estate. How to calculate the return of a house and whether the multi-family home can be worthwhile to achieve high returns, you will learn in this article.

The return - what's that?

Basically, the return expresses the relationship between the outgoings and the deposits of your apartment building. It can be easily calculated by dividing the profit of an investment by the invested capital. In relation to a multi-family dwelling, this means that the value of the house must rise in order to generate a return over a certain period of time.

In the following example, this calculation will be clarified once more: You initially invest 500,000 euros in a multiple dwelling, within the next five years, the value of this property rises to 600,000 euros. Now you have to divide the profit (100,000 euros) by the stake (500,000 euros), as a result, you get 0.2. The return of this house is thus for the period of five years 20%.

The return on an apartment building: return

The apartment building - good for yield?

As mentioned above, increasing the value of your apartment building is essential to achieve ROI. The problem: In most parts of Germany, the increase in the value of real estate is so low that the possible return on investment is minimal. If you really want to achieve a return on your apartment building, you need a good location: In inner cities and central areas of big cities such as Munich, your property will most likely be worth more.

However, not only is the multi-family dwelling, but also almost all other types are affected by this small increase in value; The multi-family house is even relatively good at yield. If you are looking for a high return today, you need to be willing to take some risk-taking: stocks, funds, bonds or other forms of investment have great potential here.

Tips & Tricks

Inquire on the Internet with other owners of apartment buildings for experience that affects the return. This will give you an idea of ​​where the return is high and where there may even be a loss of value.

Video Board: How To Invest in Apartment Buildings