Quote:
Originally Posted by neustria
JM Broad: As always I found these latest posts of yours of great interest.
Do you happen to know how residential rents are re-evaluated in this country? Are rent increases say linked to a specific inflation index , or are future rent increases set out per se in all residential lease contracts?
Wouldn't a German commercial investment (shops etc.) offer higher yields, conserve an equal potential for capital gain, and actually entail fewer restrictions than residential tenant leases?
Neustria
|
Residential rents in Berlin are monitored by the Berliner Mietspiegel (mit Berliner Betriebskostenübersicht im Anhang) which is prepared by the Senatsverwaltung für Stadtentwicklung. Basically this booklet (30 pages long) explains in detail how much you can rent your property out for depending on the details of the property. Details include build year, condition of the property (renovated or not), location, furnishings and fittings, and a dozen other tiny details. It covers just about everything you can think of and specifies exactly how much a tentant has to pay (max) for their rented property. They can (of course) pay less and in many cases they do pay less.
By law, landlords can raise the rent by 6.5% per year (restriction is 20% over three years) until the figures reach those outlined in the Mietspiegel. However, as mentioned earlier, tenants in Berlin have free legal representation therefore these increases can take a while to push through or may even get blocked altogether as the lawyer can appeal the increase based on their interpretation of the Mietspiegel and the property in question.
Commercial property can be interesting in some areas of Germany, obviously some more so than others. At the moment I'm focusing only on Berlin. As the population is redirecting more towards cultural, art and execs rather than production office spaces do look good in Berlin however the offer is limited and in many areas already quite expensive - hence residential seems to offer the best growth and yields.