Investment Property - Berlin

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cerebral

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Hi All,

I'm interested in looking into possible rental property's in Germany, but have no idea how to go about it. Any body have any advise on how one would go about this?

Thanks,
 
Hi,
German property very different to what Irish and other overseas markets look like. There are a lot of renters in Germany with a very low percentage of owner occupiers. Property prices are cheap but so also are rents. Having said that yields can be in the region of 8% to 10%. What budget had you in mind. Is it single apartments/flats or Blocks or commercial property that your interested in.
I have a couple of investment properties in Berlin and while they are proforming well with regard to vacancies and rental yield, capital value wouldn't have incresed since I bought them in 2005/2006. Having said that they wouldn't have decresed in value either which bearing in mind what has gone on in the property markets worldwide its not bad.
East Germany will have cheaper property and higher yields on paper but you could have problems with finding and keeping tenents. Southern Germany will be more stable but more expensive to purchase.
Anyway if you can post a bit more info maybe I can point you in the right direction or PM if you want to go into more detail.
Galwayboy
 
Hi GalwayBoy,

Thanks for your reply. The budget would be in and around 150,000 - 200,000. I have been looking at Central Berlin, Kreuzberg area. Do you have agencies looking after your rental properties? Is it difficult to go through the mortgage process with German banks. Do you know of agencies that assist with this? What other costs are involved, solictor fees/taxes? Are there any other difficulties that come up that would not exist here in Ireland?

Thanks
 
I brought 2 apartment blocks and another which is a mix of offices and apartments. The properties are managed by a German woman who I must say does an excellent job. She looks after everything to do with the properties and I mean everything. She finds tenents, makes sure the rents are paid, deals with tenents problems and organises all repairs and refurishments etc. She also pays any bills such as the running costs, mortgage payments etc. She charges around 25 euro + Vat per unit per month. This is the going rate.

You should still be able to get around 70 to 75% LTV. It really depends on the rent roll from the apartments.
You need approx 12 to 13% on top of the purchase price to cover all other costs. A broad outline of these is
Transfer tax 4.5% (in berlin, 3.5% else where)
Agents fee usuall 6% + VAT at 19% = 7.14%
About 1% will cover notary costs
Maybe need 0.5% arrangement fee for the mortgage depending on the bank.

When I was dealing with the banks it was in different times so I'm not sure how difficult it is now. There is no point in going to the banks though unless you have bid on a property. Its not like Ireland where you can get approved for a mortgage in principle. Also you dont normally pay a depoist - you just go straight to the notary for signing subject to him checking all things out. At this stage you go and arrange the finance.
Are you looking to invest 150 to 200 of your own money or is this figure inclusive of any mortgage. Is it a single flat of an apartment block that your looking at.
 
Hi GalwayBoy,

Thanks for all that, that's really useful information. The sum would be made up of 70k of a deposit, the rest a mortgage. I would be looking at a 2 or 3 bed flat. I lived in Germany for a year during college, so it is somewhat familiar to me. And it seems like Berlin is a good place to invest in right now, as you say teh majority of people rent so it's a good renatl market. I have a younger brother currently living in Berlin (doing the music thing!) so either he could live in it or look after getting it rented out.

I'm just gathering information at the moment, so I do not have a particular property in mind. Are you aware of any locations that you feel would be particularly good to invest in right now?
 
Cerebral
Have a look at this link [broken link removed].
It can give useful information at times and not so useful at other times. Right at the end they have a link I think to a mortgage broker. Toytown can throw up other interesting pieces of information on Berlin in general.
As you probadly already know Prenzlauer Burg is the so called real "hot" place at the moment. But you will pay according.
Really wouldn't be an expert on the local area's enough to recommend for you to buy in any particular area. Just do the figures, crunch the numbers and take it from there. If you do decide on a particular apartment and want a second opinion in the future you can PM me. Hope this information is of use to you.
Galway boy
 
I have a nice property available in Kreuzberg if your are interested and we can cut out auctioneers fees.Send me an email if you are interested. pringle_an@yahoo.com
 
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