KARODI - Real Estate Broker In Germany

As a real estate broker specializing in investment properties, KARODI knows what it takes to sell and what a potential buyer wants in terms of information to make solid buying decisions, namely, facts and figures, analytical data and statistics. As a real estate broker we know that the approach of a potential buyer in a real estate deal is different from that in buying an owner-occupied property such as a house. The decision for an investment property is usually made rationally to ensure the highest positive results are sustainable through not being based on emotional reasons.

Market value analysis by the real estate broker

In the ideal case, KARODI emerges as a real estate agent performing sales of property through market appraisal from which all relevant facts in addition to the current market value are derived:

• Property titles and deeds
• Corridor map
• Layouts
• Drawings and descriptions
• New photos
• Old photos (as well as those of any previous damage)
• Rent roll, rent levels of commercial space and/or living space with payments, date of last rent increase, rent levels before the last increase
• Living area calculations
• Preparation of the model year and the extent of major repairs and upgrades
• Levy overview
• Affected sites
• Conservation
• Easement information
• Information on development
• Calculation of the gross enclosed space or contents of rooms

1. The Principles Of Real Estate Investment

• Cash flow

  Positive cash flow is the most important criterion in connection with a real estate deal. The cash flow or the rental income must always remain the main focus during the real estate selection process. The property-related cash flow makes the difference between object deposits (mainly rent and incidental expenses, advance payments to cover current payments for operation and management of the property) and property payments (financing costs, administrative costs, operating costs, maintenance costs and eventual refurbishment costs). The rental income helps to determine the value of an investment property. The higher the rental income, the higher the market value. The lower the rental income, the less a buyer is willing to pay for the property. In the financing of large investment properties with many more units, the cash-flow opportunities should be considered at first, not the creditworthiness of an investor.

• Gross Initial Income

  The gross initial income is an easy-to-return ratio with high practical relevance. It is associated with the rental agreement in relation to the purchase price, i.e. any extraordinary income or losses; increases are not included.

• Gross Multiplier

  The gross multiplier represents the reciprocal value of the gross initial income. This is obviously relevant in practice; profitability ratio is the simplest form of a copy, because it determines only the ratio of price to annual rent contract, i.e. any extraordinary income or losses; increments’ are not included.

• Net Initial Income

  The net initial income relates to the increment of gross initial income. The net initial income takes into account the additional non-recoverable operating costs and transaction costs which are usually composed of real estate transfer tax, notary and court costs and broker’s commissions, i.e. any extraordinary income or losses; increments are not included.

• Net Multiplier

  The net multiplier is the expansion of the gross multiplier. The net multiplier takes into account the additional non-recoverable operating costs and transaction costs which are usually composed of real estate transfer tax, notary and courts costs and broker commissions, i.e. any extraordinary income or losses; increments are not included.

• Cash-on-Cash Return

  The cash-on-cash return is the velocity of the equity of the investment. The cash flow coming from the invested capital is brought into consideration. The cash-on-cash return expresses how long the time period is recorded until the cash flow capital is employed again. This is so that an investor can always invest in new real estate properties. Whatever you use in equity is again available much earlier and can be used for other real estate equity and new additional positive cash flow can be generated. The cash-on-cash return can be defined as the sum of the real estate from an investment in a particular period as a percentage of capital invested.

• Capitalization Rate (Cap Rate)

  The cap rate is a commonly used international profitability ratio, which is comparable to the net initial yield of the net income in relation to the purchase price. However, the transaction costs are not included. For this reason, the cap rate is always higher than the net initial yield. The higher the cap rate, the stronger the economic performance of the property, but also generally the greater the increase in risk.

• Return on Equity – ROE

  Return on equity, the net income of a property, is net calculated based on financing costs and the result in relation to equity. The code is of high importance in real estate analysis, because the ratio reflects the interest against the allocated equity. A constant net income return on equity with additional debt can increase due to the use of leverage.

• Net Operating Income – NOI

  Net operating income represents the net earnings of a property: the sum of all income from rents and leases net of non-recoverable operating costs. There are no costs included for interest and amortization, or taxes.

2. The Real Estate Broker Creates A SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

The SWOT analysis is an effective tool in business. Every property has its own strength, weakness, opportunities and threats. As a specialized real estate broker in Germany, we know that it takes time to identify and analyze them before making a purchase decision. It is important to note that this is a subjective analysis. We find no right or wrong answers. Many factors are connected in between.

3. The Real Estate Broker Understands Real Estate Investment Trends

From the chart analysis of securities comes a saying: "The trend is your friend." This applies equally to real estate investments. As a real estate broker in investment properties, we observe trends and try to immediately recognize new ones that influence the real estate market. For example, many years ago, German residents moved out of towns into the quieter and cleaner suburbs. Nowadays, due to the steadily rising cost of fuel and the many recreational amenities that a city offers, people are moving into the centres. The urban centres experience a massive demand for property. The example shows that an investor is currently well advised to invest in urban centres and not in the country where the demand for real estate is very low. Our real estate brokers follow the daily market events and study the market analysis, journals and newspapers. Attention is paid to any factors that might affect the real estate market, so that we are always able to offer you professional guidance to secure your investment.

4. The Real Estate Broker Prepares Real Estate Demographics

The demographics of the location of real estate should be included in the property analysis. There are always numerous recent studies of cities in which you might want to invest funds. The demographics reflect a snapshot of the population of a city, and includes income, industries, major employers and other key economic and financial information.