Tijarat Investments offers the best and secure passive income in this Convid-19 scenario through rental income.
In the home base investment, you finally have the chance to reconcile your working day with your organic rhythm and private life.
If you want to invest your money, you often buy a rental property. But not every investment property is automatically lucrative and reliably generates high rental income. Many factors are crucial for a good return.
Tijarat helps you earn 10-15% annually of your invested value while you staying at home
In the best case, an investment property can open up a long-term, lucrative source of income. In the worst case, however, it turns out to be a dime tomb.
The following are just some of the steps we take to help you get your promised passive income.
Tijarat is very keen on finding the right investment property:
We help you buy an investment property, in a location with a future – where unemployment is low and the population does not shrink. we do pay close attention to the micro-locations: a dilapidated property on a disreputable street is not a really good deal for us. Conversely, an investment property in an average location can be a good choice if other factors fit like: Good condition, contemporary floor plans or good transport connections which suggests that the property could be interesting for many tenants.
The question of whether major renovations will be carried out in the future also determines the attractiveness of an investment property: outdated building technology or even structural damage can cause considerable follow-up costs; in the worst case, total renovation can even cost more than a new building. In addition: The Energy Saving Ordinance (EnEV) even prescribes certain renovations. We always consider that the costs incurred for this should also be taken into account.
Unusually high ancillary costs for tenants can also speak against a certain investment property. The energy performance certificate shows whether a property is well insulated and therefore uses little energy, or whether a lot of money has to be spent on oil or gas.
Even an intrinsically interesting property can be a problematic investment. Namely, when there are problem tenants in the house. Rent arrears, lawsuits as well as subsequent evictions or devastated apartments can really cost money. Therefore, we carefully check the tenant structure in the house: It is particularly interesting in this context whether there have been rental arrears, irregular rental payments or legal disputes with tenants in the past.
Is the property overpriced or cheap? – The rental multiplier provides information
Tijarat examines economic viability very closely once we find an interesting property. The rental multiplier provides a first indication of whether a property tends to be cheap or expensive. The key figure can be easily calculated:
Multiplier = purchase price / annual rent
A property that costs 500,000 euros and brings in rent of 25,000 euros annually has a multiplier of 20 because the purchase price would have been earned with 20 annual rent. A multiplier of 40 would result in a rental income of 12,500 euros, a multiplier of 12.5 in rental income of 40,000 euros.
For investment properties in prime locations with likely rent increases, the multiplier of an apartment building can be 40. In cities with high unemployment, a declining population and growing vacancies, there are also properties whose multiplier is less than ten. The rental multiplier is therefore not an absolute figure that immediately provides information as to whether a property is cheap or expensive. Rather, the following applies: the more promising and future-proof a property appears, the higher this key figure may be.
Return and value of investment property
If the actual return on a property is to be calculated, net key figures are more suitable than the multiplier. The formula for the net return is:
Net yield (in%) = (annual rent – management costs) * 100 / (purchase price + incidental purchase costs)
In order to generally determine whether the purchase price of an investment property is appropriate, the earnings value method is suitable. With this, for example, the property value without the property or the remaining expected useful life are also taken into account.
It should also be taken into account that encumbrances on an investment property can reduce value. This includes, for example, easements such as rights of way, housing rights or a social bond for tenants. If the property is on a hereditary building plot, this also reduces the value.
Contact Tijarat today to invest in the most promising land of passive income which is Sweden. Sweden is one of the countries with low public debt, good demographic development and a solid currency. The general conditions are therefore good. Of course, we are experts in finding the best location of the property to get stable passive income for you.
Stay Safe, Stay home, Trust Tijarat – we got your Future.