Real Estate vs. Stocks in Germany — Which Wins?

本站添加: 2026-05-28

[00:00:00]If you had 20,000 euros saved up right now and you wanted to build wealth and equity, what would you actually do with it? Stocks or ETFs or real estate? Today I'm sitting down with SN from SN Finance to finally give you straight answer with real numbers, honest opinions and no it depends. So let's get into it. My name is Hans, I own 15 apartments across Southern Germany and I help expats invest in German real estate through my platform German Realty. And sitting with me today is SN from SN Finance, the number one channel for expats in Germany covering stocks, ETFs, taxes and wealth building. SN, great to have you here.

[00:00:34]Welcome. Hi, thanks for having me.

[00:00:36]So SN, let's start simple. You cover finance for expats in Germany, right? I think you upload one or two videos a week on YouTube. For my viewers, by the way, make sure to follow him on YouTube.

[00:00:46]Make sure to also check out his videos.

[00:00:49]But um SN, in your opinion, what is the number one question you get from people who have just arrived in Germany and are starting to think about building wealth here in Germany? Mostly um the biggest problem or the biggest concern that they have is should they start investing in real estate directly when they come to Germany or should they start in ETFs or individual stocks? So this is one of the biggest or um main pain points expats in Germany have uh when it comes to my audience. And uh how does that work usually? Do they just contact you via I think you offer also a couple of programs, right? Um how do they get in touch with you usually?

[00:01:26]So the main channel is or the main source of people contacting me is my YouTube so they usually write down comments. I try to answer them as quickly as possible through the comment section and then I also have certain coaching programs. Uh people can contact me or or they do contact me through that coaching program and then uh we go through a specific plan based on their own specific needs. So in those coaching sessions, people always ask me, "Okay, I'm new to Germany. What should I do?

[00:01:53]Should I invest in real estate? Should I invest in stocks, maybe gold or even ETFs. So, we go through their own uh whole situation, their their finances, and general coaching session general coaching session, and then we go through specifics of what might be good for them. But, in most cases, as I said, they are new, and as a new newbie, I would say nine out of 10 cases would be that they would should start with investing in ETFs or individual stocks.

[00:02:22]Because real estate, as you know, it's a little bit or in Germany, there's nothing that's little bit complicated. It's quite complicated for beginners.

[00:02:31]>> Yeah. Yeah, definitely.

[00:02:33]Uh I think that's a very interesting topic, and we'll dive deeper into this sort of specific question, stocks or ETFs or real estate here in a second as well.

[00:02:40]Um but, thanks, of course, for that insight. Now, a lot of expats I speak to feel like investing in Germany, especially, let's say, in real estate is somewhat not for them. They say it's of course, as you also just mentioned, it's too complicated, way too foreign, of course, too much German. Uh do you think expats underestimate how accessible investing here actually is?

[00:03:02]>> I would say it has more to do with psychology than with uh understanding the system.

[00:03:09]Because usually expats come from a whole different system, and Germany, even though it's not that unique compared to other countries, but the process of doing things is quite sequential here. So, you need document X, and without document X, you cannot proceed. And from my experience with people from different countries, it doesn't usually work like that. You can do multiple things in parallel, and even X if X document is not there, you could pause this section or this process and continue with another thing. And in Germany, you cannot process anything if X document is stopped. So, they they usually get stuck with that kind of a thing. So, as I said, it's it's Germany, it's it's a structural kind of a thing. So, this is something that they don't really understand. And again, the the biggest problem with expats is or the biggest challenge is the language.

[00:04:05]Uh there are English options available, but not for everyone. So, even as you know that if you were to speak mostly you prefer to speak in German or as a German. So, it's it's it's a it's a street where it's quite a difficult kind of a thing for newbies. Yeah. And but then there's an another section to the this story. If someone has been in Germany for a while, those things are understood to them. So, they they are easier to um follow the German process.

[00:04:36]>> Mhm. Yeah, definitely.

[00:04:38]Um so, as you know, I give advice to expats as well regarding Yeah, them wanting to buy real estate here in Germany, right? And of course, language barrier is a big topic, right?

[00:04:49]If you come from a different country, you don't speak [clears throat] the language, it's very difficult to both invest in stocks here in my opinion, but also especially real estate because the process with real estate is a lot more a lot deeper, a lot more Yeah, complex, I would say, right? And it's difficult to sort of get transparency into this whole process of how you can actually invest in real estate as well. Um what I noticed over the last couple of years is that all of my mentees in the past, they were able to buy real estate even even if they don't speak the language, right? So, it's doable, but of course, it's a little bit more complex. Just to give you another idea, I mean, even for me as a German starting with real estate, it was very difficult to sort of get an overview of how this all works, right? Um as I say, there are some some documents you've never seen before in German, very legal terms and so on. So, it's even I'd say even for Germans, it's very difficult. Um but it's doable for expats if they really want to get into it and possibly also have somebody who can guide you through this process.

[00:05:48]So, yeah, very interesting. One thing I've noticed in my close personal friend circle here in Germany is it's quite difficult to get started with real estate. But, like I would say 50% of those people who bought real estate or any any investment maybe for themselves or as a to let property, they either bought a second property or are actively looking to buy a second one. So, I don't know if there are psychological or maybe they find that okay, it is not that difficult and they just start pursuing the next property and the next option.

[00:06:24]>> Yes. So, I don't know what that is.

[00:06:26]>> Yeah, it's probably the latter, definitely. Because I think yeah, once you've been through this whole process once, it becomes easier. As you sort of know what you need to do in order to buy a property, right? And then you can just repeat it and do the same with the second property. So, once you sort of made that experience once, I think it's way easier to to do it a second time.

[00:06:46]Hassan, maybe let's let's now compare the different advantages and disadvantages of like stocks and ETFs versus real estate. I think real estate has a massive advantage that most experts don't know about and the big one is taxes, of course, right? Let's say you rent you own a rental property in Germany and by owning that property, you can basically deduct all kinds of expenses related to that property.

[00:07:12]For example, mortgage interest, depreciation, maintenance costs and many other costs, right? So, by that you can create a taxable loss which reduces your overall income tax. For example, me personally, I was able to save around 15 to 20,000 euros just on these deductions. Most cases, depreciation on the property. Is that a big advantage in your point of view compared to stocks or can stocks even do anything like that at all? So, with stocks there is uh this one savers allowance, which is 1,000 euros per person. So, if you are uh married and file a joint tax tax return, you have 2,000 euros as a couple.

[00:07:52]So, this is the main advantage of um like yearly tax tax allowance. Other than that, there is no such advantage in terms of direct tax benefits.

[00:08:04]But, when it comes to investing in stocks and ETFs, it's [snorts] the starting, which is quite easy. You don't need any like complicated documents. You don't need any complicated understanding. You just need 5 minutes, probably, to open a brokerage account, uh look at a very simple video.

[00:08:23]You don't have to look at mine. There are hundreds of videos out there.

[00:08:26]Find an ETF that you find useful. Start investing. So, from starting to think about investing to actually investing, it it could take you more than not more than 10 months. So, I think this is the biggest advantage of investing in stocks and ETFs. And then you can even start with just 1 euros. So, that that's uh what I think would be the biggest advantage of investing in the stock market. Definitely, yeah. I do agree. Um the entry barrier, as you said, is way lower compared to real estate. Um and you can, as you say, start with a lower amount of money, which is, of course, interesting. When it comes to like um how passive the investment is, what do you think uh is is the the winner in this case? Uh so so it it varies, I think, in my opinion. So, for an absolute beginner, ETFs and stocks are like by far the most passive thing you could do.

[00:09:17]But, let's say let's play the devil's advocate for for real estate for a moment. If you have this um real estate mindset, you if you have had experience back home in your home country, and you've had certain properties and you're you are aware of um the real estate system back home, then you come here, you invest, and then you have had experience for for a long time. You know the systems. Then it could be I would say 20% more difficult than stocks.

[00:09:49]But even then it would be stocks and ETFs which which would be more passive.

[00:09:53]Because with stocks you just buy and forget.

[00:09:57]Not individual stocks. That's a different story, right? So with ETFs you can buy and forget.

[00:10:02]With individual stocks you have to follow the revenue, the quarterly reports, how the market is behaving, how the total sentiment of the whole market is.

[00:10:12]Because sometimes even if a company is performing quite well with the in terms of its revenue the market says ah we don't like this and the stock value goes down. So there's a huge distinguishing factor between ETFs and individual stocks. So I would say ETFs probably 1% effort required. Stocks is probably like 50% effort effort required. And starting with real estate I would say 100% effort required and with time it reduces to I would say 50% but I would never say that real estate would be a passive kind of a thing even if you have a lot of companies working everything for you. Even then maybe you would agree it's never a passive kind of a thing.

[00:10:53]>> Yeah, I agree somewhat. It really depends on as you also mentioned whether you have a management company which takes care of your property or not, right? Then you also have to distinguish between the management company that takes care of the overall building anyways and your specific apartment let's say which you buy. And if they even take care of your specific apartment which means they take care of the rental management, they check whether the rent is actually coming in and rent out the apartment to a new person then there's really not much you have to do on a yearly basis let's say.

[00:11:22]You get what's called the name cost not preaching them from the management company and you sort of added it a little bit and send it over to the renter once a year but that's then basically all you need to do, right? Um but if you don't have that management company, which of course also costs money, um and you want to manage the property yourself, there may be a lot of work involved, as you say, uh as well. Uh and then it gets really, yeah, not so passive, but rather a lot of work, especially if you own several properties, of course.

[00:11:50]>> So, let me ask you, how much is the average for for such such a such kind of a company? Uh they charge >> The the cost that associated with So, this is called a a a Sonderverwaltung, a very German word, of course. Um and they charge around 40 to 50 euros per apartment. Uh and then, as I said, they take care of of everything, basically.

[00:12:10]Um you don't have to manage anything, uh except from renovations, because that's of course a more, yeah, difficult topic, uh a topic which requires a lot of time investment from their side, as well. So, that's usually not covered. Um then you would have to to uh sort of pay them an extra in order to sort of do this renovation in your name. Um but that's usually how much it costs, yeah.

[00:12:31]Okay. Mhm. Yeah, I I thought it would be based on a percentage of the the rent that you get per month.

[00:12:38]But um I think if you're getting 3 4 500 euros uh called per month, 50 60 euros is not that big of a deal if it's it's if uh it helps you like Right. remove a lot of stress from your life.

[00:12:52]>> Definitely, definitely. But there are some pros and cons as well to it, right?

[00:12:56]Um but that's a subject for another video, I'd say.

[00:13:00]So, uh Essen, let me ask you another question, maybe. Um if a typical expat comes to you, let's say, they have a busy job, maybe a young family, not much spare time, does real estate actually fit their life, or should they rather stick to stocks, let's say? It It all depends on their long-term goals. Let me go through different scenarios. So, there's one typical uh process for expats coming to Germany is that someone comes to Germany as a student or as an individual who works in a German company or whatever and they have a family back home then they bring their family right? And then they make their goal of staying in Germany for 5 6 years until they get the nationality and then move to some other country or some other place.

[00:13:50]For those kind of people, it's quite difficult to say that real estate is something that they should look into because their goal from the start is um coming here, staying for a couple of years and then moving.

[00:14:02]And in my opinion, it's not that good of a deal or not that good of a decision when you know that you're staying for a very short time. So for them, I would say I usually tell them, "Okay, it could be something that you could look into but probably not good of an idea. So stick with individual stick with stock ETFs and if you have some more time, go and look into ETFs.

[00:14:26]or stock, sorry.

[00:14:28]And then there's those kind of people who say "For us, Germany might be our like end goal. We would love to stay here forever if the country would like to have us."

[00:14:39]For them, it's quite an interesting kind of an option.

[00:14:42]So for them, I would say maybe you start looking at the whole investing thing.

[00:14:50]Uh if you have any experience prior to coming to Germany or if you have had invested in stocks, ETFs, or gold, or whatever then you should definitely look into real estate. But I never like coach anyone to first start with real estate because it's I would say it's it's a difficult tier of investing. So for them, I I usually say start with individual stocks and ETFs. Then look into a little bit about commodities, gold, and stuff like that. And then in parallel, you can definitely look into real estate. So, it's never real estate first and then the other things.

[00:15:26]Uh it's always the other way around. I would totally agree with you. Um I also get asked the the the same question basically uh in all of my consultations I give, right? Um and and most of the people who contact me right away, they already invested and have some let's say emergency fund uh in stocks or ETFs. Mhm. Uh and I think that's the way to go, right? Especially if you own a big property uh which which is worth let's say several uh thousand hundred thousands of of euros. Um then it's definitely better to have this emergency fund maybe also into stocks or ETFs.

[00:16:00]Uh and you have that experience already and then you can start with real estate.

[00:16:03]So, I definitely would agree with that.

[00:16:06]So, Asen, thanks so much for for this great conversation. Thanks for being so honest and giving a more sort of broader look into uh how experts should invest their money. Everyone watching, go check out Asen's channel. The link is also in the description. If you want to go deeper into real estate, I've got two videos right here on your screens uh that go perfectly with this one. So, make sure to check them out as well.

[00:16:28]Asen, thanks again so much and uh see you soon. Thanks for having me. Bye-bye.