Warning!!
I looked into the German market in depth (especially east) and was not encouraged by what I found. Yes there are cheap properties around and yes there is some decent countryside, but here are a few of the downsides:
1) Council Tax is payable in full even if the property is totally derelict.
2) When B2 letting you have to pay all of the bills and then try to claim it back from the tenants. (Not always easy!)
3) If your tenants have a problem, for example a small water leak or some kind of maintenance issue they will not call you to let you know. The first you will know is a solicitors' letter with threats of litigation and withheld rents.
4) When providing a 'warm' flat you can only charge each flat for a percentage of the heating costs. If you have five flats and four are occupied it's not so bad but if a few people move out you have astronomical running costs. The two flats occupied will only pay two fifths of the heating costs leaving you a substantial bill as the winters are long and hard and can often drop below minus 20 degrees.
There are also more properties than people because of a massive depopulation problem in the East. The market is saturated. The economic induced migration is forecasted to last for another generation so tenant prospects are poor and rent potentials very poor.
5) There are massive taxes if you try to sell quickly and make a profit. You have to hold for at least ten years to avoid this and there are rumours that even this will be abolished with a taper system introduced.
6) If you have an electricity supply, you have to pay every month a fairly high standing charge whether any electricity is used or not. They haven't got the equivalent of our nil service charge facility. If you disconnect then there are hefty fees to reconnect.
7) Management companies are very expensive.
8) Labour costs are very expensive, at least the price of the Brits. That's why so many Brits have worked over there for better money than they get in the Uk. Poles and Czechs are not legally allowed to work. Renovation costs are far higher than new build.
9) Listed buildings (Denkmalgeshutzes) are a real money pit. The red tape is much thicker than on listed buildings in the UK and the skilled tradesmen are much more expensive.
10) Not many people in the east speak English. Unless you speak deutsche this can be a real problem.
11) The German economy upturned a little last year but is still in dire straits. The country is literally on the verge of bankruptcy and Angela Merkel is raising taxes to keep afloat. In the next two years there is going to be a major change to the way that property dealers/investors (immobilien maklers) are taxed on their returns. The government wants a much bigger chunk!
All in all Germany is really not worth it. Much better prospects can be found next door in either Poland or the Czech rep. Their economies are massively outgrowing Germany and there are major investments happening. The capital appreciation in these countries has far more potential. The yields are already higher and growing.
I wouldn't go for Bulgaria now as the boat has been missed. Romania is worth looking at but still lacks a lot of infrastructure. Parts of Morocco still offer excellent prospects.
Good luck wherever you choose.
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