JM - Whether tenanted properties are the way to go or not is down to investor priorities.
Firstly rents can be raised - not to the point where they are going to set the investors heart pulsing - but they can. It is a little complicated and must be within the rules laid down.
If this is to be done it must be done with eyes wide open though. The rents in Berlin nowadays are not electrifying - those days are long gone. I have an apartment block yielding 27% (my own) This is absolutely the exception to the rule nowadays.
The tenant is cosseted and protected in a way which disappeared in the UK during the Thatcher era. This should not necessarily be seen as a negative. I own apartments where the sitting tenants have been there for years. Meanwhile my safe and steady small percentage just keeps dripping into my pot. This suits me - It may not suit others with less realistic expectations. I am not continuously having to direct my management company to advertize my properties.
If you are purchasing in the German cities you must also be aware of the glut of rentals available. If you push your luck with the rental raise you may well find your tenant moving on and your yield is down to minus x% because fees for these flats don't go away just because they are empty. Treat your tenants fairly and they will stay for a long time - mistreat them and lose money - a no brainer really.
I operate in Germany and I would struggle to safely make more than 7% net. 4-5% is about the norm. Higher can be made but as you point out have a caveat warning attached to them.
There are areas where if you wish to be something other than a slum landlord you are probably wiser avoiding. Most of Neukoeln would fit that description. Parts of Wedding are also less than salubrious.
I stick to Charlottenburg, Wilmersdorf,Spandau,Prenzlauerberg,Schoneberg(most of) There are also outlying areas worthy of consideration, Blankenfelde, Marienfelde, some areas of Teltow,Potsdam.Dallgow-Doberitz.
Berlin is an exciting place to live. It is not necessarily the most exciting place to invest if your mindset is short term (If it is - stick to BTL in Upper Tearemapartrovia)
Mid to long term is the name of the game throughout Germany.
Where Berlin (and the other large cities of the North - Dresden/Leipzig etc) excels is the potential for long term capital growth and it is about as safe as anything is likely to get in the minefield of real estate investment regardless of what the latest BTL/Creative financing guru may wish to tell you as he/she is boarding the plane to the next, as yet, unheard of "Hot spot" Leaving you and thousands of others with a broken dream and a property you cannot now sell.
Like you I do not display my own company credentials here. Any one can contact us and talk openly about meagre rental returns and the protection of the tenant, I would invite them to consider that this is not the full story of this wonderful country and the canny investor may wish to consider things other than risky, dreamlike yields. Gamblers can stay out of Germany - Many sophisticated investors appreciate Germany for what it is - absolutely safe (unless you come across the rogue snake-oil men JM is so right to warn you about)
Also ask the agent about the capital gains situation in Germany - interesting given the potential for growth!
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