Is leasing better than buying a home
Who is real estate leasing for? Explains Kai Ostermann, Managing Director of AGV Anlagen- und Grundstücksvermietungsgesellschaft.
SZ: What is real estate leasing?
Ostermann: The principle is similar to leasing a car. A lessor concludes a long-term contract with a lessee for the use of an object. The business is based on the idea of "use instead of ownership". A special feature of real estate leasing is that a separate rental company is set up for each property. This is owned by the lessor and contract partner for the implementation.
SZ: Almost like normal rent.
Ostermann: But it is not quite. The investment decision is not made by the landlord, but by the lessee. In contrast to the rental business, this largely acts like an owner, i.e. also pays for maintenance, for example. More and more lessors are therefore offering real estate services. If you want, you can use additional offers such as construction management via the leasing company. A medium-sized entrepreneur in particular usually has neither experience nor time in this.
SZ: Who is real estate leasing for?
Ostermann: Real estate leasing is at home in the commercial sector. But more and more cities and municipalities are also adopting this financing model.
SZ: Is that also an option for private builders?
Ostermann: No. In view of the complex contractual relationships and the given fixed costs, a leasing transaction only pays off with a property value of around three million euros. In addition, the typical advantages of real estate leasing do not apply to private individuals.
SZ: Which are they?
Ostermann: Because the lessee spreads his expenses over a long period of time, he strengthens his liquidity. In addition, leasing has no impact on the balance sheet and has a positive effect on the rating.
SZ: Even so, the number of business deals in the industry has been falling sharply for two years. Why?
Ostermann: The volume of new business is strongly related to the construction industry. However, our company has grown against the market, also because we offer a wide variety of leasing options.
In addition to leasing new buildings, companies or municipalities can lease existing properties. Lessees can also sell owned real estate to the lessor and then lease it back from him.
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