MaxPower90
2018-04-02 13:13:14
- #1
Hello dear people and a happy Easter Monday!
Last year I financed some small apartments as an investment at 80 - 90%. For several years now, as we all know, we have been in an environment of rising real estate prices, at least in urban areas.
When I look at the real estate price trends in the USA around the 2008 crisis, I notice that prices fell relatively abruptly (within 1 year) by up to 50%. Now there could be another crisis in the coming years (no one can really rule that out) and real estate prices can fall quickly.
My financing is structured so that I pay off about 5% per year. If, for example, all properties suddenly lose 30% of their value next year, my existing loans are higher than the entire value of the property. Of course, I will still be able to service the loans through the rental income.
But: Can the bank in such a case demand additional collateral? For example, that I assign a [Tagesgeldkonto] to the bank? If they can, will they probably do so? Does anyone of you perhaps even have experience from 2008?
Thank you all for your answers!
Christian
Last year I financed some small apartments as an investment at 80 - 90%. For several years now, as we all know, we have been in an environment of rising real estate prices, at least in urban areas.
When I look at the real estate price trends in the USA around the 2008 crisis, I notice that prices fell relatively abruptly (within 1 year) by up to 50%. Now there could be another crisis in the coming years (no one can really rule that out) and real estate prices can fall quickly.
My financing is structured so that I pay off about 5% per year. If, for example, all properties suddenly lose 30% of their value next year, my existing loans are higher than the entire value of the property. Of course, I will still be able to service the loans through the rental income.
But: Can the bank in such a case demand additional collateral? For example, that I assign a [Tagesgeldkonto] to the bank? If they can, will they probably do so? Does anyone of you perhaps even have experience from 2008?
Thank you all for your answers!
Christian