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