Berlin Investment Sample

What do you all think of the following sample of what can be bought in Berlin:

www.daft.ie/760790

14 No. 2-bedroom Apartments - .. E1,020,000
+ Acquisition Costs - ................. E 112,200
Total Cost .............................. E1,132,200

Germany is a renting society and therefore voids are minimal and not even worth considering - it is not uncommon for a German apartment to be rented to the same person/family for a period of 15+ years. This means that one of the fourteen apartments would probably become empty each year and would be filled in a couple of weeks.

The rent is E74,706 which gives a yield of 7.32% compared to the 3-4% available in Ireland. This 7.32% is also alot better than a 7.32% yield in Ireland given the VERY low void periods.

You can obtain a mortgage in Ireland for a property here. I'd definately consider a building like this if I was in a financial position to do so. However, the barrier stopping me is the fact that you need a 20% deposit AND 11% towards acquisition costs (legal, etc.). This includes a 6.5% estate agents fee (in Germany, the buyer pays the estate agent as opposed to the seller.

Visited Berlin recently. Very attractive and prosperous looking city.

On the tour bus the guide mentioned that there was a huge oversupply of rented accomodation with many buildings standing idle. This is obviously completely anecdotal and could be way off the mark.

Any Berliners care to offer their opinion as, on the face of it and without this tidbit of info, it looks a reasonably attractive proposition...

If you search the Property Investment forum for 'Berlin' or Germany, you will see we have one poster (who I believe may be German) who has strong views on German property (I'm not saying they are right or wrong) that may be worth a look.

Location, location ,location!

Know your market, I'm not getting the sense you do!

Germany in my view is a gamble worth taking, as things, including German psychy has to change going forward.
Cities as Berlin, Munich, Hamburg, Duesseldorf, Frankfurt, Cologne etc. are in my view in particular attractive and hold good potential. Do invest into your research as it will help you to make better decisions and even more important, avoid the really bad ones.

By the way, my money is in Cologne, based on research and bias.

cologneboy

cologneboy said:

Germany in my view is a gamble worth taking, as things, including German psychy has to change going forward.
Cities as Berlin, Munich, Hamburg, Duesseldorf, Frankfurt, Cologne etc. are in my view in particular attractive and hold good potential.

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I agree with your opinion. What do you think of Stuttgart as a place to buy?

It looks like the German property seminars have arrived:
[broken link removed]

have a look at this i have mentioned it before and i am contemplating investing..
www.cmccapital.ie

the only thing i would like to add is that when German opens it's doors for free movement from the last EU ascension states that the rental market should pick up as obviously these people will need places to live but that will really depend on where the jobs for these people are in Germany..unemployment was down last week and the economic signs appeared good in the latest report

just another quick thought.. have you thought of forming your own syndicate,raise the 20% and fees ... should be easy to get the balance on a morgtate with those occupancy rates

that scares me!!......a group forming their own syndicate and sucking money in to a property without due diligence.
For what it is worth would prefer a syndicate ran by institution with track record etc..

apologies i wasn't intimating looking for others to form a syndicate on here and certainly not without doing due dilligance..if you did happen to be in a certain profession where colleagues were interested or had a group of friends to form a partnership.then it could be a good investment

Shnaek,

I haven't looked into Stuttgart, so I do not have an informed opinion on it. I would imagineso, that it should be attractive given the the geographic location in the south-west of germany and the big guns being attached to the area, ie daimler.
investing into a survey (approx.€300,-) should be invested to make sure your only paying for what your buying.

good luck!

cologneboy

Germany is practically in recession, their economy isnt growing and they have massive problems with labour law, market reforms etc A lot is expected of the new goverment, dunno if they are upto the job. They are still having problems integrating east germany, and their plans of relocating industry to that part to regenerate have hit an obstacle with the new entrants into the eu i.e even cheaper labour. There is practically nothing in berlin except coca cola and the goverment at the moment, this may well change. Hence prices are lower compared to other euro cities. The only exception to this is bavaria (munich), which is buoyant but prices are high there.

Cologneboy,

Can you share with us the basis for your predilection for Cologne. What are the yields, desirable areas and occupancy rates? If you have some links to good info, that would be great.

Bilbo777 said:

Hence prices are lower compared to other euro cities.

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Prices seem incrediably low. I'm no expert on the subject, but I was searching Daft last week for relatively cheap investment properities in europe... up pops Turkey, Poland, Bulgaria, all under €100k... then Berlin at just over €30k appears on my screen. It seems astonishing.

Two which caught my eye:
€30,000+ and €33,900+

Now, i'm very young and currently have no job... infact i'm currently sitting my Leaving Cert this week!... but I could actually afford to buy one of those with a 20yr year mortgage (thanks to earnings from a website business I run) and pay the deposit in cash. That's not even considering the 5.6% guaranteed rental yield.

I am realistically considering perhaps buying a foreign leaseback property with either my parents or a friend (he speaks great german!) whilst i'm in college; obviously far more reserach is needed... but the starting price points abroad, even in southern france (where vat is refundable) and of course Germany are so low compared to here. It seems a no-brainer.

I really have not investigated anything much yet (I have an L.C. to focus on); just thought you'd find them of interest. I shall be doing far better research when I actually have to part with cash!

Askar,

my research on Cologne is helped by the fact that I'm from Cologne and know the area, including the suburbs pretty well.
Just bought an appartment in Köln-Riehl, 5.8 % yield.
Have a look at www.s-corpus.de and in particular at [broken link removed]


Good luck,

Cologneboy