Hi there,

I am thinking of investing in a small property in Germany, Berlin. Could you please let me know if, even though the current global economy is weak, this is still a sensible idea?

I was thinking of buying around Berlin Mitte which is one of the busier and trendy areas.

I would appreciate any kind of thoughts or helpful websites I could check out.

Also, what kind of property yield is average and which would be a good one?

Thanks in advance
Regards

Hello Sophie,

You could do worse, though Berlin is quite a regulated though sometimes frustrating market, and has missed out on spectacular capital growth, I think it is just about the safest market to invest in during the current traumatic times.
I bought 3 apartments (my first BTLs) and I am generally very happy, because I found a sourcing company which found me incredibly well priced high quality apartments in desirable areas.
I also found a really brilliant solicitor who did far more than her immediate call of duty, and without her I think the deals may not have been done.
I am just back from Berlin, and I am told, even with the euro appreciation it is still comfortably the cheapest major capital city in europe.
My e-mail is charlesbeadle@tiscali.co.uk and I will happily tell you whom I used although I cannot post it

Hi Sophie

I'd say that before you can decide whether Berlin is a 'sensible' investment you need to address the question of why you are investing and over what time frame.
If it's for capital growth in the medium term, then there are almost certainly better places, in my view.
If it's for yield, long term, then maybe, but are your yield expectations realistic?
Can you secure finance and on what terms?
And so on..

cheers

Hi Robin,

The idea would be for a longterm investment...and the amount would not be too high - in the area of 50000 to 80000 Euros for a small flat. Half of which would be financed through a bank. I thought of letting the flat on short let contracts through an agent at some stage.

Brgds

Hi Sophie,

That is a fair chunk of equity - up to €40K.

I reckon you need to go back to the original question - basically, what do you expect of that money?

Do you want to see capital growth or an attractive net yield? The fact is you are unlikely to see both in any market.

If you are after yield, then Berlin is often touted as a great location - but our findings have been otherwise.

I would urge you to have a look at our report here http: / /www .propertysecrets .net /product _viewer /germany _property _market _profile /37 .html

If you're after capital growth, are there better alternatives with the same or a better risk profile?

The way to package up these questions is, I suppose, to say: why are you interested in Berlin?

Best regards

Sophie
Hi. Need to think carefully re Germany in general and v carefully if Berlin. Tenancy arrangements (eg rent control) are still poor for landlords in some areas but locals tell me its getting better.

Although its a generalisation, Germans are so cautious on debt that, despite some early growth, its hard to see the market take off as its has elsewhere. A visit is a must.

BTW, many 'West' Germans dont regard Berlin as the real 'Capital', rather its the centre of government. They tend to think Berlin is the place where all their taxes get sunk into.....
Munich and Frankfurt are the main commercial centres. I dont see this changing.

Still, yields can be good and it can be seen as 'safe' (solid established rental market) so maybe in the long run it will be OK.

David