East German property outside Berlin

  • Thread starter Enda Storey
  • Start date
I agree with a lot of what you have said. There are a lot of caveats to market entry. I don't think you will get yields of 15-20%, in the range 8-12% is likely but when making your calculations you should calculate with 75% occupancy even if its 100% occupied when you buy as vacency rates are high.

Entry costs are usually estimated at 10% but the way things are right now you can automatically knock 10% off the any asking price and negotiate with the agent on his commision (usually 3%), unfortunately the legal fee seems standard as of course is the stamp duty.

German rental culture is a + and a -. Plus because folks tend to stay longer but minus you are very restricted with what you can do with the rent unless they move out. I agree with you its a minus in terms of liquidity.

Also there is a "Hausmeister" concept which doesn't really exist here but I think is very useful if you have a good Hausmeister and he will keep things ticking along (small repairs and maintenence) although you will need an agent as well (usually 10% of rental income). Also what is different to here is that it is standard practice for all your incidental expenses to be charged on to the occupiers (eg insurance, hausmeister, reading of meters, garden maintenence, any municipal charges etc) so your only extra cost is the agent. Having said all that, any one big repair job could wipe you out so a good survey of the heating, roof etc is critical.

Re: appreciation. Thats anyone's guess. Whats for sure is that the market has been heading south for some time. I've seen an example of someone wanting to get out with 25 % losses (title deeds), paid DEM 800k in 1995, now wants EUR 300k).

The usual other positives apply, inspite of what others here might suggest. Stable legal, political situation. Strict planning and commercial laws. Infrastructure of high standard. Demographics vary from city to city but mass emigration has stopped and since 2000 seems to be stabilising. Birth rates are low, demographics won't push this market.

I am interested to know the city by city situation. I have the impression that Berlin is being carpetbagged already so I find it interesting to keep tabs on the other major cities.
 
To Theo:
The German population is shrinking, by about 1% per year. Similar to the other non-catholic populations on the European continent.
Investment propertys exist in Germany only in the case of modern new buildings and- in a smaller context- in fully renovated market orientated buildings. Buying "Schrottimmobilien" is not called investment but "Kapitalvernichtung", that translates to "capital destruction"-meant is wasting of money. There is a difference between investment and speculation.

The German gouvernment is spending billions(!!) on scrapping houses/entire "Stadtviertel" to get rid of ghettos. No one wants these "cheap" flats. Contact any "Makler" about the issue or simply buy the magazine of the " Verband Deutscher Wohnungs-und Immobilienbesitzer", check the web.A membership of this organisation is not very much in terms of money compared to evtl. losses.
 
Last edited by a moderator:
Folks-try to keep this civil or the topic will be locked.

You can use the 'ignore' option to do exactly that if you don't like/agree with what others are saying.

Thanks.
 
Thank you for this edit CCOVICH.

Unfortunately, I had already read the offensive parts of that last post.

Enda Storey
 
Heinbloed im quite dismayed by your incesesnat negitivity when commenting on almost all topics pertaining to germany. While I have experienced this deep routed negitivity and constant suspicion in SOME Germans yours does indeed take it to a new level. Im not trying to have a go at you here but would rather like to point out the injustice that you are doing to your country and fellow country men. Some of the points you have raised are valid albeit a little exaggerated by yourself.

There is always risk there is danger and there is gloom however many of our greatest ideas companies investors and business men achieved what they have by being contratians and not adhering to the predictions of gloom and detractors I think Richard bransons biography is a text book in this regard.

My point is as such if you always adhere to everything the nee sayers preach you will never see the sun from the clouds risk and reward come hand in hand. Germany is long term has its problems but when compared to buying an apt beside a ski slope built in a desert in dubai I know where i would prefer my money to be just my two DM!.
 
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