Voting For GermanReal.Estate Security Token
GermanReal.Estate was started so expats could invest in properties in Germany in the easiest way possible. Now you can vote on which property we are buying and tokenize.
Table of contents
- Introduction: Vote For The First GermanReal.Estate Community Token
- Q1: Strategy Of Our Community Real Estate Security Token
- Q2: Will Our GermanReal.Estate Community Token Pay Passive Income?
- Q3: Type Of Passive Income Our GermanReal.Estate Community Token Pays
- Q4: How Often Would You Like To Receive Passive Income?
- Q5: Your Investment Amount In Our GermanReal.Estate Community Token
- Bonus For Everyone Participating In Our Community Voting
Introduction: Vote For The First GermanReal.Estate Community Token
With our GermanReal.Estate security token we are introducing a new possibility to invest in rental properties in Germany on the blockchain. As this makes investing in German real estate easier and cheaper than any other existing investment option so far, it will be possible to start investing for just 1€. The entire project was started in order to create a new exciting investment option for expats living in Germany. So you should also have the ultimate power to decide which investment property we will buy first.
For that, we created a Google Form that allows you to vote how our first GermanReal.Estate security token will look in detail. With 5 easy questions, you can determine all settings of our real estate security token from the investing strategy to passive income. For your participation in our community voting, you will also receive a bonus once the community token is ready to invest in.
Follow along with the article for deep insights and further explanations of what you can vote on exactly to create the very first GermanReal.Estate security token.
Q1: Strategy Of Our Community Real Estate Security Token
The start of a solid financial planning process is always to determine the right strategy first. That is why question 1 of our community voting to create the first GermanReal.Estate security token is to ask you which real estate investing strategy we should pursue. When participating in the community voting, you have the ultimate power to shape the future of the traditional German real estate market.
One of the biggest real estate trends in Germany is to invest in the ageing German population with nursing homes, institutions for elderly living, or seniority homes. While it is generally never possible in the investing world to predict the future, this real estate investing strategy separates itself from the rest. Because everyone who is 60 years of age right now, will be 70 years old in 10 years from now.
According to statistics from the German Statistical Office, the percentage of the retired population living in Germany is 19,5% right now. That percentage will grow to 22,8% in 2030, 26,0% in 2040, and 27,4% in the year 2060. This real estate investing strategy is relatively obvious as all these elderly people need to live somewhere. Consequently, this security token strategy is not just safe as we can predict the future. This strategy is also profitable as the cost of elderly living is rising consistently.
See example rental properties of this real estate investing strategy here:
Aside from investing in (newly-built) seniority homes, there is option 2 to invest in newly-constructed buildings in general. Young properties tend to have fewer renovation costs for the investor. Especially given the fact that the property developer has to pay for all renovations in the first 5 years after finishing constructing the property (“Gewährleistungspflicht“).
While these are some benefits of investing in new rental properties, the purchasing price is usually a lot higher compared to already existing buildings. Additionally, the finish date of the construction can only be estimated in advance and is unclearly at the moment of purchasing the investment property. Consequently, investors that want to receive passive cash flow from rental income will get it in 2-3 years only once the property is built and ready to move in.
See example rental properties of this real estate investing strategy here:
The third strategy option for our real estate community token is to invest in already existing properties that need renovations. The idea behind that value strategy of investing in rental properties is to buy at a cheap price before the renovations are done. When renovating a property after the purchase, the investor can deduct the renovation costs from his taxes. After the modernization is complete, the property can be rented out at a higher price as it is freshly renovated.
While it seems nice to make the German government pay (at least) partly for your property renovations as you can deduct the costs from your taxes, it makes more sense to follow this real estate investing strategy as a private person. The legal issuer of our community token will be the company German Real Estate Token 1 GmbH. As this company will enjoy a tax rate of 15% only, deducting renovations will also return a 15% benefit only (compared to up to 45% in income tax as a private person).
See example rental properties of this real estate investing strategy here:
Instead of renovating properties in order to rent them out at a higher square meter price afterward, we can also engage in Fix & Flip with our GermanReal.Estate security token. Fix & flip is all about buying properties that need renovations quickly, doing the modernization while deducting all costs from taxes, and immediately selling the property after the renovations are done at a higher price (not building a property portfolio like the value investing strategy above).
As fixing & flipping rental properties is considered a commercial activity by the German Finanzamt, we will lose our 15% tax advantage with this token investing strategy. Instead of paying just 15% corporate tax only, a company that is commercially active will pay roughly 15% commercial tax as well which results in the regular German company tax rate of 30%. Companies that are holding assets only (like in the first 3 token strategy investing options) can be exempt from commercial tax.
Independent of the tax rate, feel free to choose which real estate investing strategy you find more desirable for our first GermanReal.Estate security token. Over time, there will be more security tokens with different investing strategies available. Our community tokens will be complemented with project development tokens from external professional property developers that will raise money with our security tokens (e.g. FiveRocks Development SE).
Q2: Will Our GermanReal.Estate Community Token Pay Passive Income?
After determining the right investing strategy for our real estate security token, you can vote if you would like passive income. Because we will generate rental income from at least 3 out of the 4 real estate investing strategies mentioned above in question 1. Instead of us determining the use of rental income, you can decide if it should be paid out to you or if we shall reinvest it to make the property portfolio grow as much as possible.
Reinvesting rental income will allow us to buy more properties with the cash flow being generated. This will result in an increased security token price that investors will benefit from as soon as the secondary market on GermanReal.Estate is live which will allow you to trade your security tokens. Investors will also enjoy the highest tax benefits with this option as security tokens can be sold tax-free when holding them for +1 year. Passive income from security tokens is subject to tax.
Paying out rental income will allow investors to diversify their portfolio even more, given they have other investment options on what to do with their passive income. As more cash is paid out to investors with this option, the security token price will rise less ad fewer rental properties will be bought over time. This might not be the most tax-efficient option, but we know that you guys absolutely love passive income. 😉
Before rendering your decision, let us state very clearly at this point that the generated profits within the German Real Estate Token 1 GmbH (legal owner of the property portfolio and issuer of the community token) will stay in the company. Profits are either paid out to investors as passive income or will be reinvested in order to make the property portfolio grow.
Q3: Type Of Passive Income Our GermanReal.Estate Community Token Pays
If you vote that you would like to receive passive income from our very first GermanReal.Estate community token, what type of passive income would you like to receive? Participants that voted in question 2 earlier on that they would like us to reinvest the generated rental income in order to make the property portfolio grow, can skip this question.
Paying a fixed interest rate as passive income to investors will result in the exact same payment in perpetuity until you are selling your security token. As security tokens are regulated and supervised by the German Federal Financial Supervisory Authority (“BaFin“) an interest rate would need to be fixed at the moment of issuing the security token. This fixed interest rate cannot be changed anymore afterward.
Alternatively, passive income could be paid out in the form of profit share. Once a year the German Real Estate Token 1 GmbH will publish its financial statement like any other company in Germany. Once this annual financial statement is done and we know exactly how much profit was generated (after interest payments for mortgage, etc), it can also be paid out to investors. Profit share functions very similarly to publicly traded companies paying out dividends to their shareholders.
Q4: How Often Would You Like To Receive Passive Income?
In case you voted in question 2 of our community poll that you would like to receive passive income from our GermanReal.Estate security token either in the form of a fixed interest rate or a profit share, how often would you like to receive your payout? 🤔
You can choose 3 different timing options to receive a certain payout or choose again that all profits should be reinvested in order to make the underlying property portfolio of the community token grow as much as possible.
Q5: Your Investment Amount In Our GermanReal.Estate Community Token
Before we come to the bonus we prepared for everyone that participates in the community voting for our security token, we would like to know how much you plan to invest. Your answers will help us to find the rental property in the right investment size to kickstart the portfolio of our first GermanReal.Estate community token.
Bonus For Everyone Participating In Our Community Voting
PerFinEx was built on the support of you guys, our community that has shown us tremendous support over the last 5+ years. That is why we always try to find ways to show our appreciation by finding benefits for you. Once our first community token is live and ready to invest in, we will share an exclusive discount code with anyone that participated in the community voting to create our GermanReal.Estate security token.
To receive that exclusive discount code, simply type in your email address in the last field of the Google Form. We will use that email address only for this one email to send you the exclusive discount code and no other (spam) emails. So make sure to type in the email address that you will use later on to register your investor account in GermanReal.Estate.
Pingback: Real Estate In Germany For 1€
Pingback: Real Estate Market in Germany - Future Developments
Pingback: Investing in Real Estate - 5 Affordable Ways