ScottHall Posted January 6, 2017 Posted January 6, 2017 If you have access to financing and are a local I'd definitely recommend direct ownership in premium areas of cities. I've done only a cursory look at the reits so I'm not comfortable in recommending names at this point. I guess I'll make a post before or after I pull the trigger on specific names. I am not, unfortunately. I'm from way NorCal. It's hard to complain, though; beautiful up here!
Jurgis Posted January 6, 2017 Posted January 6, 2017 If you have access to financing and are a local I'd definitely recommend direct ownership in premium areas of cities. Couple caveats about direct ownership that I heard from a German friend of mine: If you buy anything that is not up to code, you have to bring it up to code immediately and from your pocket. No grandfathering like in US. Yeah, friends had to put in new pipes into brick/concrete walls. Have fun. ;) You have to pay RE taxes for ?? (20?) years at time of purchase. Other side of the coin is that you don't pay RE taxes afterwards. Anyway, both of these were told to me as reasons not to buy (or if you have bought to never sell and buy something else). YYMV, this is anecdotal, does not apply to REITs, do your own DD, etc.
frommi Posted January 6, 2017 Posted January 6, 2017 If you have access to financing and are a local I'd definitely recommend direct ownership in premium areas of cities. I've done only a cursory look at the reits so I'm not comfortable in recommending names at this point. I guess I'll make a post before or after I pull the trigger on specific names. I am german and looking for a new home since around 2 years now. I can't find anything above a 3-3.5% annual rent/price yield with closing costs of >10%. This is in a medium sized city in NRW. The buying side is pretty crowded right now, so even if i can get low finance rates i just don't see how that is attractive right now.
whiterose Posted January 6, 2017 Posted January 6, 2017 Sorry to burst your bubble but I'm german and a bit RE-knowledgeable: If you buy anything that is not up to code, you have to bring it up to code immediately and from your pocket. No grandfathering like in US. Yeah, friends had to put in new pipes into brick/concrete walls. Have fun. ;) This is only true in so far if the relevant bureaucracy gets wind of it. You have to pay RE taxes for ?? (20?) years at time of purchase. Other side of the coin is that you don't pay RE taxes afterwards. That's not true, you pay a one-time transaction-tax of around 5-6.5%, then there are quarterly RE-taxes based on the "value" of the house. These are relatively low because the relevant values-table is from 1935. I am german and looking for a new home since around 2 years now. I can't find anything above a 3-3.5% annual rent/price yield with closing costs of >10%. This is in a medium sized city in NRW. The buying side is pretty crowded right now, so even if i can get low finance rates i just don't see how that is attractive right now. This is absolutely true, the prices have already risen since 08/09, so the yields even in B-cities/locations are way too low considering the risks (and rental-laws in favour of the renter). Rents have risen also, but incomes not so much on the other hand. I can't really see how RE-prices can go higher from where we are when interest rates are on their way of going up and rent as share of income is higher as ever. In any case, you should be a seller of RE in germany today, not a buyer.
Jurgis Posted January 6, 2017 Posted January 6, 2017 You have to pay RE taxes for ?? (20?) years at time of purchase. Other side of the coin is that you don't pay RE taxes afterwards. That's not true, you pay a one-time transaction-tax of around 5-6.5%, then there are quarterly RE-taxes based on the "value" of the house. These are relatively low because the relevant values-table is from 1935. I guess the interpretation was wrong, but numbers were kinda right. 5-6.5% transaction tax is pretty discouraging for flipping or even normal sale-to-buy-something-else after couple of years.
whiterose Posted January 6, 2017 Posted January 6, 2017 On a side note: the average german is not that financially savvy. Although they can budget and live within their means with a comparable high savings rate (in aggregate), the cash is mainly just sitting there in the bank getting 1%. There are multiple studies of this irrational risk-aversion. Stocks are at a 8-12% allocation, with maybe 80% owning no stocks/etfs at all. So all the cash is idle and piling up, then people say RE is save and steady and yields sth.. "think about your family/kids..", "to rent is throwing money away" etc. So all the regular Joes are buying RE at (recently) inflated prices since 09. The market is also crowded on the institutional front, where REITs, RE-funds, insurance companies (many german clients/assets), pension funds, trusts etc. have to invest in yielding assets. The bond market is not that attractive anymore and the ECB is competing there with the bond buying program. Stocks are considered too risky or from a regulatory perspective not allowed. So many are forced to turn to alternatives ->RE.
NewbieD Posted January 6, 2017 Posted January 6, 2017 Storytel - dominating audiobooks, growing 100%+ outside home market, majority of revenues abroad + expect hindi launchwhich will attract other investors. cutting costs at legacy book publishing arm not understood A City Media - digital signage roll-up, dominating small market with good ceo Inission - good operators + allocators, way too cheap Smart Eye - unexpensive. betting on hype when the market realises they are in a few coming premium cars for 7+ years and Autoliv will see them in many more Moberg Pharma - continued profitable growth + bingo option for new nail fungus treatment
kh812000 Posted January 9, 2017 Posted January 9, 2017 CNDT. New spin out of XRX. Trades at 0.6X book. 3 Board members are Icahn reps. 50% of rev decline due to runoff of unprofitable business. EBITDA margins of 10% vs industry at 15%. Fixing internal bloat and focusing on right opportunities gives good upside....
constructive Posted January 9, 2017 Posted January 9, 2017 CNDT. New spin out of XRX. Trades at 0.6X book. 3 Board members are Icahn reps. 50% of rev decline due to runoff of unprofitable business. EBITDA margins of 10% vs industry at 15%. Fixing internal bloat and focusing on right opportunities gives good upside.... I don't think BV is a useful metric here. TBV is negative. With revenue and income declining over the past few years, it seems like they may need to take an impairment on intangibles.
bbarberayr Posted January 10, 2017 Posted January 10, 2017 CNDT. New spin out of XRX. Trades at 0.6X book. 3 Board members are Icahn reps. 50% of rev decline due to runoff of unprofitable business. EBITDA margins of 10% vs industry at 15%. Fixing internal bloat and focusing on right opportunities gives good upside.... Been looking at this too. Most of BV is intangible, GAAP earnings are very low, but I agree there is a lot of room for improvement. Plus stock is selling off as XRX shareholders who don't want are dumping, so may get a bounce soon. Who are other "industry" companies that you see the 15% margins in? Seems a lot of their services are fairly low tech, so would not want to compare to high end consulting firms.
Spekulatius Posted January 11, 2017 Posted January 11, 2017 As others, I don't have very high conviction after the recent rally. Two ideas that I think will work are BUD and German real estate. This is interesting, why do you think this will be a great investment? Germany historically has had low ownership rates and stable prices. So number one there is a large rental market. 2. RE is quite cheap in German cities. 3. Due to the interest rate situation ownership rates and prices have started to tick up in recent years. I think situation will continue. 4. Cap rates are pretty good by themselves so you don't need a lot of price appreciation. 5. There are some reits that are trading around book. Also they don't take a chunk of money out for their private "administration company" which is nice. WExboy wrote a couple of blog posts on German real estate ideas https://wexboy.wordpress.com/2013/11/21/german-residential-property-an-update/ I bought Sedlmayr back a few years ago and had my Mom do the same. I recently sold as it doubled. I think the time to get inot German RE plays was couple of years ago, now commercial RE looks fairly priced and residential RE becomes overvalued. I actually think there are better opportunities in the US now. ( German transplant here, don't claim to be expert in either German nor US real estate.)
whiterose Posted January 12, 2017 Posted January 12, 2017 https://www.bloomberg.com/view/articles/2017-01-10/high-inflation-low-rates-are-a-threat-to-merkel The savers' plight is pushing them toward alternative investments, but Germany doesn't have much of a stock market culture. Households seek simplicity. That drives up housing prices. Though, according to the Organization for Economic Cooperation and Development, German residential housing is still undervalued compared with the country's income level, and the nation's home ownership level is still low at just 53 percent, the country -- especially its top metropolitan areas -- are experiencing an acute housing shortage which new construction is not covering. This is hardly a real housing bubble at this point -- German real estate is still cheap compared to other European countries with a comparable living standard -- but investors' search for yield keeps pushing the prices up about 10 percent a year in the big cities. At the same time, conservative banks are finding it hard to believe in the current market prices, which means they are willing to finance a decreasing share of actual deal value. That makes it more difficult for buyers to take advantage of low interest rates. Those with the money to buy housing in Berlin, Frankfurt or Munich are a minority, of course. But the lack of other comfortable investment options for them makes life harder for everybody else. Rents are growing at about 3 percent a year, faster in more desirable areas. That is a separate, though related, political danger for the ruling parties. Merkel's strongest card to play in the campaign is that, as she put it in November, "people have never had it so good." He makes some good points, but the "undervaluation" is I guess to be seen as relative (to norway/sweden maybe), not absolute. The level of homeownership is due cultural reasons bound at 50% (for a century?)
awindenberger Posted January 25, 2017 Posted January 25, 2017 http://raritancapital.com/wp-content/uploads/2016/11/MixT.pdf Mix Telematics Interesting business and valuation. Are the fully-audited financial statements somewhere online? I don't see the full statements on Edgar. Go to the company's website.
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