Thanks…. When John McGlade contacted me and explained he was pulling together this investor summit…..he asked would I like to take on the CHALLENGE of speaking about investing in property, in some of the media advertising running up to this event he described me as COURAGEUOS for waving the Property investment flag! He conceded he wasn’t considering having a speaker for Property investment. So, I feel somewhat of a gate crasher here today! This is understandable given the spectacular decline of the Irish real estate market at all levels over recent years. But, Property Investing will always continue to be the most important part of Irish investors portfolios, the key is to identify how investment strategies have changed in recent years and where the opportunities lie for you over the next few years.
Share in Germany’s No.1 Residential Property Portfolio 2012
WHY PUT ALL YOUR MONEY INTO ONE PROPERTY when you can join together with like minded investors and purchase the whole building at a lower price with higher returns.
Agenda Share in Germany’s No.1 Residential Property Portfolio 2012
Where an individual investor could purchase one apartment in Germany for €140,000 with a rental yield of 5.5% and with a 60% mortgage, Propfund Germany would bring all these investors together to purchase the entire building resulting in the same apartment being purchased for €100,000 with a rental yield of 8% with an 80% mortgage. With this model Propfund investors make a lot more money with little or no involvement compared to investing privately themselves. The idea is very simple… Share in Germany’s No.1 Residential Property Portfolio 2012
Forecasted dividend of 7-10% per year. 170% return in 10 years time Invest €50K in Germany and Make 170% ROI Your Exit Amount: €135,000 Returns 2012 Share in Germany’s No.1 Residential Property Portfolio
No.1 residential property investment market in the world
Germany – The Worlds most stable property economy Share in Germany’s No.1 Residential Property Portfolio 2012
“ German residential sector is regarded as a secure investment” CBRE What the media says in 2012… Share in Germany’s No.1 Residential Property Portfolio “ Apartment costs up by around 8% in 2011” GSW Immobilien “ The most dynamic rent market is in Berlin, where prices rose by 9%” Jones Lang LaSalle “ Housing prices rose by 5.5% last year— more than twice as much as in 2010.” TD International “ Analysts expect prices for German real estate company shares to rise by 5-15% over the next twelve months” Dr. Zitelmann 2012
Housing price development is healthy Share in Germany’s No.1 Residential Property Portfolio
DB Research expects a further rise in the price of housing in Germany. Prices for houses should rise by 3% annually until 2015, condominiums by even more. No talk of a bubble: “Historically and in terms of disposable income, housing remains attractively valued and thus, even with price increases of 5% per year through 2015, there is no threat of overheating.”
Over the long term, prices are not likely to go through the roof because of both the regulatory environment, which has a moderating effect on rent, and the demographic trend, which, “in less than ten years,” will have a negative influence on prices.
Berlin housing market Share in Germany’s No.1 Residential Property Portfolio
Properties are valued as a multiple of the rental yield
Property Prices and Rents are low in Berlin and rising
Berlin is a population of tenants – 84% of Berliners rent
Germany’s capital city has huge potential for growth!
Apartment block for sale €1,000,000 (10 apartments at €100,000/apt)
If purchased individually €140,000/apt
Annual rental income: €76,900 (13 times annual rent)
Investment based on a purchase price of €1,000,000 plus 10% closing costs.
80% bank financing + 20% private equity
Stage 2: Manage the portfolio each year
Collect the annual rent: €76,000 (increase by approx 2%-3% per annum - €100,000 after 10 years)
Manage all the annual costs: €59,000
Generate the annual cash surplus: €21,000 (grows as rent increases per annum)
Shareholder payout each year = €21,000 - 7% of the €300,000 private equity
Stage 3: Resell the property after 10 years
2%-3% increase in rent pa = 20%-30% increase in Property value over 10 years
Mortgage balance reduced by approx. 20% over 10 years
Property resale value: €1,300,000
Profit from sale of the portfolio: €300,000 after all closing costs
Investment Model Share in Germany’s No.1 Residential Property Portfolio 100% ROI in 10 yrs Purchase Factor 13 7% ROI Each year (€ 210,000 over 10 years = 70% ROI) 2012 + ( € 300,000 = 100% ROI) = ( € 510,000 = 170% ROI)
Creating wealth for investors Share in Germany’s No.1 Residential Property Portfolio
Earn an average dividend of €3,500 per year for 10 years. (7%pa)
Read a copy of the investment prospectus. Decide the amount you would like to invest.
Complete the Investment Instruction and return this to your advisor.
The Trustee signs the necessary documents and returns copies of these to the investor.
Once you have received the documents you need to transfer the funds to the Propfund bank account.
Receipt of funds is first confirmed by email. Once the 14 days “cooling off” period has expired, confirmation of funds along with a share certificate is sent to you by post, this completes the investment process .
Getting Started 2012 Share in Germany’s No.1 Residential Property Portfolio
Thank You Propfund Germany, GmbH & Co. KG KG, Friedrichstraße 82, 10117 Berlin-Mitte T: +49 304 9905 0950 E: email@example.com 2012 Share in Germany’s No.1 Residential Property Portfolio