German Property

[Andrew - Alpha]

Dear Dr Q,

Thanks for the post. Yes these areas certainly do have potential and this is where a large section of the growth in Berlin has already been seen. These areas in the central west are the very top end of the market.

The problem with these areas is that yields have been compressed due to recent gains. Remember you can only raise rents once every 15 months, so yields trail behind capital appreciation by approximately a year and a half. So the problem you have is finding a property with sufficient rental income to wash its own face. This is still achievable if buying in bulk e.g. a whole block. But this is quite unlikely when looking for single apartments.

The last thing you want to be doing as a property investor is paying monthly to keep you property running.

We currently have an apartment block on the market in Charlottenburg very near to the palace for 2.45m euros (23 units) this has a yield (net except management costs) of 5.55% and should be an excellent investment for strong capital growth. Not every investor has the flexibility of budget to look at this kind of project. If you can it should certainly be worth while.

Anymore questions please feel free to fire away,

Kind regards,

Andrew

[sunmoon]

Hi Andrew,

Can you please let me know what is LTV is because am new in the forum

[Andrew - Alpha]

Hi,

Yeh not a problem at all LTV stands for loan to value. So if you were buying a property for 100K and borrowed 60K of it that would be a 60% LTV mortgage.

Regards,

[Rambo]

Hi everyone here,

As a acquisition manager with years experience in Germany but on properties of 5 Mio. upwards only, I would like to see how private investors are getting along with the market.

I know what I am saying might not be to the liking of some guys here, but my opinion is that you cannot compare Berlin (P.S. I dont think that besides Aglos and Ammos anyone goes wild about Berlin, there are many problems there which is why many local investors simply avoid it after burning fingers in the past.....) to London and Dublin.

The big Funds (Fortress etc.) are fed up and want to pull out (read FT about it) of the residential in Germany, Goldman Sachs screams aloud : THE GAME IS OVER.....

If a private investor with - say - 250 K wants to invest, I would say just look for a syndicate of Pros or look somewhere else. You dont know the lingo, you dont know the culture, the red tape and you will be a good target to be screwed up by some crooks (the market in Germany is full of scoundrels looking for a quick buck and charging you up to 6% for it...)

Wishing everyone here success....

[immernoch]

Rambo I read the FT article and I didn't have much to say to it, except that you really have to play the game and be in the know in order to gain profit in most areas.

the language barier has not been a problem for me (having fluent skills in german) so maybe I'm speaking from a biased source but with great investigation i have managed to play the game in berlin and have been very happyw ith my returns.

[mart123]

Hi,
The Deutsche bank produced a report in 2005 that was very pessimistic on the Berlin Property scence. High unemployment, 10% of flats vacant at any one time, outward migration. I can't post the link but you can find it under google
deutsche bank report berlin property market
it's titeled heavily mortgaging the future.

What has changed to make Berlin a good investment?

[bialikma]

Hello all !

I'm quite new at this forum and currently checking the offers in Wilmersdorf , Zehlendorf and Charlottenburg . Anybody can advice ?

[teepeeseller]

Originally Posted by DrQ

Hi Andrew - Could you tell me whether you think Schoeneberg, Charlottenberg & Wilmersdorf have any investment potential?

I can perhaps spread a little light on this for you having lived in Charlottenburg and worked in Wilmersdorf.
Ch'burg is seen and has been seen for many years as a des res area. Prices per sqm are higher here than in many other areas of Berlin for good reasons - it's pleasant. You can expect good, solid, safe returns here for a more substantial outlay than in many areas of the city - to a lesser extent the same can be said about Wilmersdorf.
S'berg is one to watch, the new airport looks as though it is happening and this colossus is expected to give many thousands of jobs in both the building and the administration of the development. This will almost certainly have the knock on effect of infrastructure development moving out from the airport.
At our agency we expect to see the tendrils of this through to Teltow, out to the Berliner ring and maybe a less spectacular but nevertheless noticeable effect in some of the outlying villages beyond the Berliner Ring.
Imagine someone saying to you they could find a house with an acre inside the M25, half an hour to Gatwick or Heathrow and you'd get change from £100,000. Would you be tempted to take a look!? Well that's what is about to happen to S Berlin and there are many properties for much less than £100k
Berlin has become the subject of much conjecture, hype, lies and nonsense and has become a magnet for the hangers-on who peddle this to trap the unwary.
Be cautious, due diligence is all.
Berlin - not just as an investment vehicle but as a city to live in is absolutely wonderful. It is not alone in Germany, Dresden offers, arguably an even better investment vehicle and it too is a lovely place to put down roots for a couple of years. I've even had the pioneers of the Brits coming for retirement purposes - a canny choice as their money goes further in Germany.
You don't make any mention of experience of living,visiting,working in Germany or if you speak a little German (always useful even though many speak English and are prepared to practice it on you) If you haven't already visited then I suggest you do so before any decision is made.
Hope this is of some use to you and that Andrew doesn't mind me stealing a little thunder.

[bialikma]

Thanks a lot . One more question: what you think about Zehlendorf ?

Mark

[teepeeseller]

Originally Posted by bialikma

Thanks a lot . One more question: what you think about Zehlendorf ?

Mark

Not enough to give you a considered opinion. I've been there many times and it's pleasant enough. I am also aware of the old US Kaserne (been in there when it was a barracks) being renovated and developed into housing. Should be sound enough and I'd be happy enough to live there. All of this my own feelings. There are those here who will know this development and the area far better than I, maybe they'll jump in and offer to help.