Wednesday, September 8, 2021

The Index Idea

 There is a term being thrown around this week in Germany....Supermietendeckel.

What it means?  Basically, super-rent-cap.

How it'd work?  The Greens say, a rent-index would be created over your property (as a owner), and the past twenty years would be laid out as a basis.

Based on the Focus example.....normally, before any rent-cap would fall into play....your rent (say in Berlin) would be 10.62 Euro per square meter.  Under the 20-year rent-index idea....your rent would be 7.09 Euro per square meter (roughly 30 percent less).

The person screwed (royally)?  The owner.

Devaluing the property?  Oh yeah.

Investing into rental property therefore....would make zero sense.  A whole element of society would go into massive collapse in a matter of weeks, if this index idea were to be applied.

The shift?  These companies that own housing (rental apartments) would find people dumping the stock overnight....with probably most of the stock ending up at 50-percent or more of the original value).  I, myself....would see no reason to invest in any apartment 'fund'.

The odds of this happening?  This came up this week if the SPD-Green-Linke coalition were to take place.  

Basically....if you were ever going to short-a-stock, and predict a dramatic loss....the results of the 26th (the election) would be that moment where you ought to throw 10,000 Euro into shorting some apartment stocks....if the left-coalition were to occur.  

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