In Germany, real estate is one of the most popular forms of investment. The current trend among real estate investors is the acquisition of holiday real estate. The properties are rented for a short time, over typical periods of one to 14 days. Today we would like to inform you about what is attractive about investing in holiday properties and what hurdles lurking in the financing.
For holiday properties attract above-average returns
The increased interest in holiday real estate that serves as an investment is not surprising. Given the current low interest rates, rented buildings are already attractive with attractive returns – and for holiday properties, yields may be even higher.
Reason for this is the short-term rental. Although the objects may be empty most of the time. But in the time they are let, above-average revenue is generated. Compared to a conventional / long-term rental, rental income can be 50 to 100 percent higher.
At the same time, it has become easier to find tenants for holiday homes. Online portals help to present objects to a large target group. Correspondingly, good capacity utilization is attractive as long as the building and equipment meet the increased demands of the tenants.
Crack point financing
Considering the attracting returns, one would think that holiday properties are highly favored by investors. However, this is only partially true. As described in the introduction, although the objects are again in the trend, nevertheless, many a prospective customer of his project looks again.
The most common reason for this is the challenges facing real estate financing. When financing investment properties of this kind, finding the right financing partner is not easy. Many banks deliberately abstain, they deliberately do not finance holiday real estate.
Many banks are simply too risky. In a classic and thus long-term rental income is safe. The short-term rental of an object involves other risks. There is a higher likelihood that the holiday home or apartment will not be let for a few weeks, thus avoiding significant rental income.
In addition, the landlord is not always able to take care of the object intensively. Often he lives further away, which is why some banks also draw radius. This means that a financing commitment is only possible if the property is within certain distance from the residence of the owner (eg 50 km).
Find the right financing partner
Fortunately, the financing market has changed noticeably in recent years. On the one hand, there are more banks offering private mortgage lending, on the other hand financial institutions have become more flexible with their financing offers. This has improved the chances of obtaining a loan.
Nevertheless, the financing market is not so easy to survey. That’s exactly why our service is so poor: we’re here to help prospective buyers and follow-on financiers. On the one hand, we help to design the financing, ie the loan is matched in detail to the respective requirements. On the other hand, we are looking for financing partners who are looking for a financing commitment. We then analyze the financing offers in detail, so that our customers also benefit from low interest rates.
Do you want to buy a holiday home? We support you in the coordination of your real estate financing and the search for loans with a low interest rate. Our service is free and without obligation. So you do not enter any liability and decide in the end whether and by whom you want to finance. We look forward to your inquiry!