Hi everyone,

My husband and I are first time buyers anD we are renting at the moment. We feel we would like to buy our first property abroad, however we're very very new to buying, let alone buying abroad. Ideally, I would like the property more as an investment for long term rental, perhaps increasing in value ??. From what I've been reading, Berlin does sound like a good place to start as the properties are fairly reasonable and I really want to start small. Being first time buyers, would it be too risky for us ? I realise I may sound frustratingly naive to some of the pro's on here, but we have to start somewhere don't we ? Any sincere, impartial advice would be greatly appreciated,

Jackie x

You will find some great advice on Berlin here. In my experience, and I have invested heavily in Berlin, certain parts of the city are great to invest in. If you want to know the areas Private Message me, but remember it's only my personal opinion.

I can also get you hooked up with a great agent if you want. He speaks English, German, French, and Spanish fluently and knows every corner of that city.

Hi there,

thanks for replying, have pm'd you,

Jackie x

Hi,
I have bought two properties in Munich, and I consider them a low risk investment. Economy is good, according to the local Press Sueddeutsche Zeitung there is a shortage of flats(20000). Demand is being driven up by people relocating from other parts of Germany - the unemployment rate is one of the lowest Germany and a trend to single living. Rents are forecast to rise between 10 and 30% over the next three years.

Berlin has 17% unemployment, I guess you can make money there but you really need to be an expert. I am not and Berlin is too risky for me.

Normally if you buy an apartment in Munich you should factor in
1.5% Notar legal fees
3.5% Estate agent or Makler fees
3.5% Tax.



If you buy a new flat off plan direct from the Builder you can skip the Estate agent fees. Some property management companies also bundle the Tax and Notar into the purchase price. Many German banks will only provide a loan on 60% of the property.

Property prices have increased a little in the last year however it's hard to get definite facts. Many of the property agents in Munich (I talked to alot) believe that there will be a significant increase in value over the next 3 years. This is driven by the improved economy, empolyees no longer feel that their jobs are at risk, real increases in salary are starting to come through (Inflation adjusted the average German salary was the same in 2006 as 1998).

Once you have bought your property you can manage it yourself or pay €20-30 to a property management company. I pay €47 to an agency who also manage the rents upward. This is more expensive than normal, but paid off because one set of tenants involved the mieterverein, there was lots of discussions, lawyers involved to drive up the rent by 6%.

Overall Germany is a risky enough proposition, birth rate is low, there is little immigration as in Ireland or the UK. In fact the german population should be starting to decrease significantly sometime soon. Munich is forecasting a population increase, it has significant industry clusters for future employment e.g., hightech, biotech, and of course the old reliables car manaufacture, brewing. THe airport is due to get a third runway and that's forecast to add 50,000 jobs to the economy.

Other cities I would invest in are, Stuttgart(Diamler), Nuremberg(adidas, puma), Frankfurt(finance), Dusseldorf(telecommunications), Hamburg (shipping).

regards,
Mart123

The French market is one of the most stable in europe, all sales go through a Notaire who is an agent for the government and his job is to check out all the legal aspects of the sale, everthing is spelled out for you in writing before you sign anything, and then you have a 7 day grace period to change your mind.
If President Sarkozy has his way more French people will be able to buy property in the near future, hence the property prices will go up, he has promised to abolish inheritence tax that will also encourage more French people to buy.
I dont know anything about the German market, but as regards to the Spanish market I wouldnt go anywhere near it. There have been too many scams, and there is a massive surplus of property.
I have a lovely property in the Dordogne at a greatly reduced price, that can sleep 10 people, it would make a great investment and the rental income would cover the cost, and in the mean time the property is going up in value.
If you are interested contact me at: huffsinfrance@wanadoo.fr

Hi Mart123,

I've already bought in the Munich market and am interested in knowing who your property management company is. I agree, this could save a huge amount of hassle if a good choice is made...
Thanks for any response
MunichBuyer

Hi Jackie,

I am a market analyst who undertakes due diligence on overseas investments and have been doing a lot of work recently on Germany. The country is different from other countries because it is still very distinctive between east and west.The former East Germany including Berlin is very risky and similar to emerging markets in Eastern Europe. My clients who are looking at Germany normally stick with capital cities but I advised them not to go to Berlin because there is no significant corporate market there just government, tourism, art etc and no significant financial services sector which is what they they should be aiming for. This is one of the reasons Goldman Sachs has just pulled out from a number of investments there - they haven't been getting the yields they envisaged.

I advised them to go to Frankfurt. The value on offer, in what is one of the worlds financial centres, is phenomenal. Prices are equivalent to mid-1990s because they haven't moved in ten years, so there is enormous potential. You can pick up a fully-let one-bedroom apartment close to the European Central Bank for under €100k. Frankfurt is also the home to over 300 other banks, has more lawyers per head than anywhere else in Germany and has the highest earnings per head of any city in Europe. Targeting tenants employed in the corporate financial services should always be a priority for a safer investment.

Angela Merkel is opening up home ownership to help cover Germany's pension bill and is doing what Thatcher did in the UK twenty years or so ago. It is very low-risk compared to a lot of other overseas investments.

The underlying economic fundamentals should always stack before any overseas property investment is purchased and you should always be able to sell to the local market. If you need anymore please let me know. If have some good contacts over there so if you need them please let me know

Be aware you still lose you first-time buyer status if you purchase abroad.


Geordie

If you are open to other country ideas and a property that quickly increases in value I would recomend a tree plantation in Brazil. I am an American who lives at the divide of Minas Gerais and Espirito Santo Brazil. I specialize in reforestation of a species that almost went extinct known as Toona Ciliata (Australian Red Cedar). A plaque exist that atacks the species in almost every corner of the world minus some tropical Islands, costa Rica and some regions in Brazil above certain altitudes. The success has been studied by a local federal colledge in this region for the last 12 years and the opurtunity to grow it here has been getting popular in the last 3-5 years. The price of a ready plantation of about 12 acres - 10,000 trees put in your name is around 35 k US. The value of this wood at the harvest is well worth the wait in fact its a great retirement investment. The land is put in your name like any property investment.