Investing in a rented apartment can still be a favorable choice even in the current environment of high-interest rates in Germany. Here are a few compelling reasons to consider investing in a rented apartment instead of using it for personal purposes:

1. Rental Income Potential: Despite higher interest rates, the demand for rental properties remains strong. By investing in a rented apartment, you have the opportunity to generate a consistent rental income that can help offset the higher interest costs. The rental income can contribute to covering your mortgage payments and potentially generate a positive cash flow.
2. Long-Term Investment: Real estate investments are typically considered long-term assets. While high-interest rates may increase borrowing costs, they can also act as a deterrent for other potential buyers, potentially lowering property prices. This situation can create favorable opportunities for investors to acquire properties at comparatively lower prices and benefit from future appreciation when interest rates stabilize.
3. Inflation Hedge: Real estate investments can act as an effective hedge against inflation. As the value of properties tends to rise with inflation over time, investing in a rented apartment can provide a degree of protection against the erosion of purchasing power caused by rising prices. This can be particularly beneficial during periods of high inflation.
4. Tax Advantages: Despite higher interest rates, owning a rental property still offers potential tax advantages. You can deduct various expenses, including mortgage interest, property management fees, repairs, and depreciation, from your rental income. These deductions can help lower your taxable rental profit and result in significant tax savings.
5. Portfolio Diversification: Investing in a rented apartment adds diversification to your investment portfolio. Real estate is a tangible asset class that tends to have a lower correlation with traditional investment vehicles such as stocks and bonds. This diversification can help reduce overall investment risk and enhance the stability of your portfolio.

Ultimately, the decision to invest in a rented apartment or use it for personal purposes depends on your individual financial goals, risk tolerance, and personal circumstances.

It’s advisable to carefully evaluate the potential returns, risks, and market conditions before making an informed decision. Consulting with a financial advisor or real estate professional can provide valuable insights and guidance specific to your situation.

However, understanding the financial and personal impacts of your choices is crucial. If you are already searching for a property or have found one, we are here to provide support.

We have strong partnerships with over 450 banks and can assist you in finding the best interest rate for your financing needs.

Feel free to schedule a free meeting with us for personalized guidance.

Disclaimer: Please note that the information provided in this blog is based on personal research and collected data. It is always advisable to conduct your own thorough research and seek professional advice before making any investment decisions or taking any actions.