Hello,

We are finding that even though there is a great interest level in this magnificent country, the investing public has many unanswered questions about how it all fits together for them and their investments.

We have a strong presence in German and a wealth of experience, so any questions or advice wanted... please fire away!

Kind regards,

Andrew Stanley
Alpha Real Estate Investments
Berlin property, German property, Slovakia Property -
info@alphare.net

Andrew Stanley,Welcome to the forum,

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www.turkishhomes4sale.com

www.turkeyherald.com

Thanks for the welcome, its good to be here

I think you should start to blow people away with the returns and growth in Germany, and how it operates in difference to other markets. regards D.c

Hi Andrew, I am currently considering @ my first overseas investment in Berlin - due to its relative stability, large economy, and of course low prices.

Can you give me any info on the rental market and elaborate of caps. I've heard a range of confilicting information about rents and would like some clarification.

Can you tell me:
1) What capping there is and how it works? Is capping planned to be stopped?
2) Can the rents be increased during the tenancy period?
3) With new tenants does capping come into play - and even if it does can I expect to get higher rent then from someone who has been in situ for 3 or so years?


Thanks, any advice much appreciated.

Dear Biker200,

Thanks for the post and apologies for the delay getting back to you. I have just returned from Berlin. Please find the answers to your questions below.

1) What capping there is and how it works? Is capping planned to be stopped?

There are no current plans to stop capping. Rents can only be increase up to 20% every three years and are not allowed to exceed the Mietspiegel (rental mirror). The level of the Mietspiegel is set at least every three years. For more information on this and links to the website for the Mietspiegel rates please see the how to buy section of our website.

2) Can the rents be increased during the tenancy period?

Yes once every 15 months

3) With new tenants does capping come into play - and even if it does can I expect to get higher rent then from someone who has been in situ for 3 or so years?

If changing tenant you can increase rents as much as you like (more than the 20% in three years etc) but you must still stay within the Mietspiegel. That being said in reality most apartments will have had rents increase whilst the tenant has been in place and probably already be near the Mietspiegel anyway.

So unless your buying an apartment with a rent well under the market level there should be very little difference.

I hope this has clarified everything for you, if not please feel free to either post on here again or email questions directly to me.

Kind regards,

Andrew Stanley

Andrew - thanks for clarifying rents.

Another quick question. Are mortgages readily available for Brits (with appropriate credit etc.) who wish to do German buy-to-lets.

I have enough savings for a deposit of approx 25-30% and would like buy a German property but don't want to remortgage my own house. Will banks/brokers arrange mortgages and, if so, what sort of rate could I expect with 30% down on an 80K euro property.

Also, while we've got an experienced German and Berlin investor on the chat pages it makes sense to ask you where you think the top three Berlin investment locations are?

Andrew - thanks for clarifying rents.

Another quick question. Are mortgages readily available for Brits (with appropriate credit etc.) who wish to do German buy-to-lets.

I have enough savings for a deposit of approx 25-30% and would like buy a German property but don't want to remortgage my own house. Will banks/brokers arrange mortgages and, if so, what sort of rate could I expect with 30% down on an 80K euro property.

Also, while we've got an experienced German and Berlin investor on the chat pages it makes sense to ask you where you think the top three Berlin investment locations are?

Dear Biker200

When it comes to lending the German banking system is a bit old fashioned. That being said is certainly possible to get a mortgage if you are a non-German. We work closely with several mortgage brokers in Berlin to make the process as straight forward as possible.

Unfortunately the banks will not offer the kind of LTV’s you’re used to here in the UK. For single apartments you should work your numbers on 60% LTV. You will probably get more i.e. 65%. Every application is assessed individually. All German mortgages are capital repayment with 5-10 year fixed rates between 5%-5.5% and amortisation (repayment rate) approximately 2%.Do also remember the smallest mortgage the bans will lend is 50K euros therefore making the smallest purchase (taking 60% LTV) 83,333 euros. You will be able to get a mortgage over multiple purchases if made in the same building at the same time.

For single apartments we look for the best immediacy of capital growth whilst maintaining a level of rental income so the investment comfortably washes its own face. The areas we have been focusing on for this are Prenzlauer Berg, Friedrichain and Tiergarten. These three are very central with good access to Mitte (where most people work) and have a high density of classic buildings.

These area have extremely strong rental demand, which means that people want to live in these areas (no break through in logic there ). When we see some of the 87% of the population who currently rent move into ownership these same areas should see the lions share of the buying. Owner-occupiers are always the main drive in growth (in urban areas).

I hope this has been of some help to you.

Any more questions please don’t hesitate to fire away.

Kind regards

Andrew Stanley

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