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REAL ESTATE INVESTMENT COMPARISON - GERMANY
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INVESTMENT PARAMETERS
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Total Investment€500,000€500,000
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Structure2 properties @ €250k each1 property @ €500k
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Initial Monthly Rent€2,000 (€1,000 × 2)€1,900
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Initial Annual Rent€24,000€22,800
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Mortgage Terms100% financing, 4% interest, 1% repayment100% financing, 4% interest, 1% repayment
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Depreciation MethodLinear 2% (50 years)Degressive 5% (§7(5a) EStG)
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KEY METRICS COMPARISONType 1: Two Old PropertiesType 2: One New PropertyDifference
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AFTER 10 YEARS
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Cumulative Net Cash Flow€19,520€43,166€-23,646
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Property Value€609,497€609,497€0
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Remaining Debt€439,969€439,969€0
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Equity (Value - Debt)€169,528€169,528€0
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TOTAL POSITION€189,048€212,694€-23,646
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AFTER 15 YEARS
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Cumulative Net Cash Flow€36,456€61,685€-25,229
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Property Value€672,934€672,934€0
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Remaining Debt€399,882€399,882€0
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Equity (Value - Debt)€273,052€273,052€0
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TOTAL POSITION€309,508€334,737€-25,229
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AFTER 20 YEARS
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Cumulative Net Cash Flow€57,573€78,766€-21,192
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Property Value€742,974€742,974€0
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Remaining Debt€351,110€351,110€0
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Equity (Value - Debt)€391,864€391,864€0
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TOTAL POSITION€449,437€470,630€-21,192
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TAX BENEFIT ANALYSIS (Year 1)
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Type 1: Two OldType 2: One NewDifference
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Annual Depreciation€10,000€25,000€15,000
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Interest Payment€20,000€20,000€0
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Taxable Rental Income€-6,000€-22,200€-16,200
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Additional Tax€-2,078€-7,035€-4,958
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