German Property Experiences

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gnf_ireland

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Hi,
I am wondering has anyone actually purchased a property in Germany in the last year and if so, what were your experiences like - with agents, legal, banks etc ?

I have been looking into Germany for a while (been away in South Africa) for the last 9 months so had to delay it. However I am planning to travel over to Germany in the next week and any contacts (agents and financial) in particular would be more than welcome.

I am happy to share what I learn with people here :)

thanks
 
am surprised you are thinking of germany instead of South Africa-- have just been speaking to someone who has bought 4 properties in sth africa in the past 3 years--great rents, no probs.J'burg.
 
cibby

I am delighted for the person who made such a killing in South Africa. By any chance did they fail to mention the falling rand, which has falled by about 30% this year alone (2nd Jan - 7.4891 v 28th Sept 9.7305) ? The currency fell by 5% in Sept and 5% in Ausust and is showing no sign to ease off or recover

Coupled with this, the properties I saw (both viewed and lived in) were normally of quite a poor building standard and very often has issues with plumbing etc. I think there will definately be some long-term maintenance issues.

The SA government is also 'discussing' putting a block on foriegners purchasing property and I am sure it is a debate that will go on for a while. SA also has very complex 'squatter' laws which can be difficult to overcome, should the need arise. The government is also very capable of issuing 'seizure' on overseas property holdings - the same way as Zimbabwe has gone for white farms (yes I know this is a political opinion - but it is a slight possibility). No one knows what will happen in the next election or when Mandella dies. Jacob Zuma for example, if elected, has to reward his supporters some way.

Yes, I agree that SA may be a reasonable option to purchase but the uncertain currency issue is enough to put me off personally.
 
Not sure if this is the sort of thing you want but
http://www.immobilien.de/
is a German approximation of daft.

Click on Regiomap and then the region and the city or town you want and then haus is house and wohnung is apartment. There are rental properties as well so you can get an indication of yields. And estate agents are listed as well, if you want to contact them. In the larger cities at least they should mostly speak some English.
 
I've been looking at 100's of blocks in Berlin since summer 2005. Bought already but looking for more, however, keep being outbid for most of the good ones. People (foreigners) starting to pay mad prices of some stuff now. It's only worth (buying blocks) if the yield is reasonable, unless you're buying a single apartment, then yields are lower but also less risk and hassle.

I'm in Berlin again next week (9-11 Oct), if you fancy meeting for a coffee and chat, I'm happy to answer any questions. I know the Berlin market very well, incl. issues such as renovations, mortgages, etc etc.

Happy to help.
 
Happy to recommend a good mortgage broker if you want to. He gets you a better deal than banks directly. Well, he certainly has in my case.

If you just want to browse listings, see
http://www.immobilienscout24.de/

It's the largest site with listings, for further info on any of the properties you need to send a mail (or the form on the site) to the agent marketing it. Most of the listings are put on by agents, some also by owners.
 
Don't just look at big cities, look in certain regions where there is a strong student population or working groups. For example Osnabruck, Heidelberg, Marburg. In the latter I'd bought and sold many years ago, but in March one of my old workmates bought (in a village that's a 2min bus ride from a mainline station - 2 stops from Marburg and 5 from Frankfurt) a 150m2 semi-detached with garage for a little under €150,000. He rented in June and it's paying his mortgage with a bonus. Just a suggestion.
 
Does anyone know of any websites in English that list German properties?
 
Has anyone here used or looked at [broken link removed]?

If so what were your opinions off them with reference to:
  • service,
  • prices of apartments in comparison to whats available if you travelled to Germany yourself
Thanks.
 
The prices in Germany certainly appear to be very tempting with yields in the region of 7% (less 12% purchase cost, ongoing prop. mngt fee)
Can anyone please explain;
- why does the BUYER have to pay for an Estate Agent hired by the seller? ... (and is this likely to change in 10 years time?)
- why is the E.A. rate an extraordinary 6%. All the seller would have to do is to put in an internet site in Ireland? Perhaps they do provide services that I'm not aware of?

and if you have time ...
- why aren't the Germans buying them (we know they have the money)
- are there particular issues with buying in East Germany. i.e. legal issues with establishing who the owner is after the wall fell?
- what are the hidden costs of owning a building? Local authority fees etc, different rates for residential / commerical ?
- why are some buildings not fully rented but the sellers claim that it will be easy to rent. If I was selling, I would be sure to get it fully rented.
 
Fergal said:
and if you have time ...
- why aren't the Germans buying them (we know they have the money)
- are there particular issues with buying in East Germany. i.e. legal issues with establishing who the owner is after the wall fell?
- what are the hidden costs of owning a building? Local authority fees etc, different rates for residential / commerical ?
- why are some buildings not fully rented but the sellers claim that it will be easy to rent. If I was selling, I would be sure to get it fully rented.
Click to expand...

In the state of former East Germany, there may still be legal issues associated with Jewish claims. You could probably read more about this on Wikipedia but the Federal Office for Central Services and Unresolved Property Issues (it's probably just one word in German :)) says

"Property Settlement Law of 1990 covers claims of victims who lost their property in the course of the Nazi persecution in East Germany between 1933 and 1945. The competent authority in Germany is still handling these claims."

[broken link removed]

As I understand it, the state of East Germany did not necessarily make efforts to restore, say, Jewish properties appropriated by the Nazis, so this process only started in 1990 there. Karstadt, a German supermarket firm were recently involved in a case about a building in Berlin.

As to why buildings are not fully rented - in the East at least there are very many thousands of empty apartments. Possible reasons - The population dropped after the wall came down, some of the buildings from Communist times are ugly lumps of concrete (the property equivalent of the Trabant), there was a lot of new residential property that went up in the rush of investment in the early 90's and the economy has not grown as quickly was expected.

But as you point out, expected yields are higher assuming a tenant can be found.
 
Fergal said:
and if you have time ...
- why aren't the Germans buying them (we know they have the money)
- are there particular issues with buying in East Germany. i.e. legal issues with establishing who the owner is after the wall fell?
- what are the hidden costs of owning a building? Local authority fees etc, different rates for residential / commerical ?
- why are some buildings not fully rented but the sellers claim that it will be easy to rent. If I was selling, I would be sure to get it fully rented.
Click to expand...

In terms of additional costs, if you buy an apartment, then you have to pay "hausgeld", whether it is rented or owner occupied or vacant. This is typically at least 100/month for an apartment. Some of this cost can be passed onto a sitting tenant as additional costs (nebenkosten).

These costs include waste disposal, heating (rent + nebenkosten is called "warm rent"), minor repairs, cleaning common areas etc. and there is often a fund towards larger repairs that it is necessary to contribute to.

In other words, if you don't have a tenant you will still have to pay "hausgeld".

Just thinking further about why the Germans don't buy - I know some Germans who choose to rent but drive BMWs - I guess it's a lifestyle choice thing.
 
I think I read somewhere that a lot of Germans got "burned " with property when the economy slumped & they are now reluctant to buy again.

Hopefully this will change as the economy picks up !

Vacant apartments:
It is considered better to buy an apt that doesn't have a tenant. The only time you can put rent up considerably is when you are taking on a new tenant. Some tenants have lived in their rented apts for over 30yrs, with very little increase over the years. These can actually cost the owner money. If you renovate an apt - new wiring,plumbing etc - then you can ask for a higher rent.

If you read reports there are vacant apts on the Eastern side - as well as quite a few squatters. The old West Berlin has approx 97% occupancy. Perhaps the east has more room for appreciation & parts of it are the trendy areas but the west is certainly more "old money" & steadier.

Dontaskme :
I totally agree with you. I've just bought an apt in a beautiful area of Wilmersdorf. The cars parked down the street are all BMW's, Audis & even classier sporty numbers. Yet, these apts are all rented. It's definitely a lifestyle thing as they could well afford to buy if they wanted.

German Economy :
When you visit the city it's like a massive building site at the moment. But at least the work is being done as opposed to talking about doing it. The restoration of East Berlin must have cost an absolute fortune. Can you imagine the Brandenburg Gate practically had to be rebuilt. All the museums are only beginning to open again as they needed total restoration. Most of the churches had been left by the Communists as burnt out shells & these have been redone.

When all this work is finished it's going to be such a fabulous city, which will boost tourism & also the outlay will slow dramatically.

Building management costs:
Different apt blocks have varying management fees. (This is the building management & not a Rental management company ) As Dontask me mentioned some of these charges can be added onto the rent. These building management companies accumulate a fund. If something major needs to be done, like dry lining all the walls, major plumbing or boiler work then the costs will be higher until the fund is big enough to pay for the work. If you buy in an apt block that's in really good order then that chunk off of the rent will be lower.

Perhaps I just bought an apt as an excuse to revisit the city. I absolutely love it there !
 
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