I would pick Berlin over many cities today. Low cost airlines are flying almost every day for a start and the city has something special.

I've invested in Germany and consider it far better than muppet Bulgaria, Romainia et al.

For a start you get year round yield (unlike Eastern block beach areas that are grim in winter). Secondly it's safe and secure. Thirdly you cant really lose but the upside potential is high.

On the downside its a bit over regulated for my tastes.

I was luck to get a 20% yield but you have to buy smart. We bought from auction but I wouldnt recommend you do this unless you buy with someone in the know, its just too complex.

There are few places I would invest. Definitely not overdone places such as Dubai or Bulgaria - imagine the mass of properties looking for tenants particularly in Dubai. Not Spain as over supply means price rises are years off and rent yields very poor unless you have the perfect property in the perfect location.

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Been investing abroad a few years. Always amazed people invest in places that produce just a few months rent per year

Good post Liam.
I have recently sold off a large slice of my UK holdings (just before the current malaise set in - more by luck than judgement I might add!)


A large slice of this went to the Berlin Real Estate Centre (now amalgamated with Saxony Property Services (an old favourite of mine) BTW) I've purchased some commercial units in Berlin and Dresden and Residential units in Berlin/Leipzig/Dresden and Erfurt. I am particularly smitten with Dresden.

These are all for my own portfolio. I have a growing band of clients asking me to find retirement properties to the south of Berlin toward the Czech border. Great lifestyle choice, cheap and accessible from Stansted and Gatwick.

The remainder has gone into building plots on Sicily. (Again with an eye to the medium/long term investment)

The tealeaves, chicken bones, runes and analytical data all point toward Germany being a story with a very happy ending.

Hi,

I've heard good things about Berlin but I'm a bit concerned about how easy it it is to sell on a property. Only 10-15% of Berliners own their own property so its more than likely you would end up selling on to another investor.

Has anybody encountered problems selling on? Can anybody tell me roughly what letting/management fees are?

Cheers,

TheAztec.

Aztec,
You are right to consider the exit strategy as an integral part of your investment plans.
Unlike so many other so called "Hot spots" there is little scope for flipping props in weeks as some have experienced elsewhere. Most of those places are now awash with unsold props as a result of greed feeding oversupply. For those just wanting their own little pile in the area of their choice this is of course wonderful. For the hard nosed investor not so.
Germany in general has to be seen as a long term, relatively safe investment. Long term means exactly that it does not mean two weeks longer than it takes the ink to dry on the contract - unfortunately the feeing frenzy was cause by such.
Change is in the air in Germany. Mortgages are going to be more freely available than hitherto. The German government is keen to turn more Germans into home owners.
No capital gains after ten years. I disagree you would only be able to sell on to another investor. Though if one comes along and makes a good offer he may as well be the beneficiary as any other type of purchaser eh?
There are many buying as a lifestyle choice, others wanting BTL, others just considering the capital growth. People like me have all three in mind.
Germany is awash with management companies. The competition is quite tough and as a result charges differ wildly, you can shop around pitting one against the other, purchase through an establish co which has an agreement with a management co and likely to be offering competitive rates because they do not wish the agent to consider any company other than their own, buy as an all in package or DIY (My advice would be to avoid this like the plague - far too many who have tried it have run into problems - it is quite a complex business and you really do not want to P your renters off as they do have the power to hurt you in Germany (I have had no problems because I have a company which treats them fairly and it is usually reciprocated)
I think if you have the property priced correctly and market it well it will sell on far more easily in Berlin than the equivalent in some parts of Spain, Turkey, Bulgaria, Florida. Be sure to purchase quality in the right area. An apartment in say Charlottenburg is likely to be expensive by Berlin standards but is in a des res area and the demand is high. If you wish to have a company recommended feel free to ask, I'm not touting my own so will not make any great efforts to push someone elses. I have a couple of tried and tested outfits I put my faith in and lived to tell the tale. Hope this helps.

When are the Germans going to sort out there mortgage market for foreigners.

That is stopping alot of capital appreciation, and real leverage in the market.

50% loan to values, or if you very lucky 70% but nothing like it was in UK, USA, Spain, and before people say what a mess it is in these countries, the reality you could make money with very little money.

In Germany you need a wedge to get in, which deters other investors, who also need a wedge to get in.

The growth of the prices will be accompanied by the growth of DEBT, in the market, its logic.

You will only win big, if the germans or other people take on more debt. So when is the loosening of mortgages going to happen in Germany?

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You're right, this has been a bone of contention for some time.
Some of my German counterparts have been smugly crowing over the sub-prime and the market here and the US and commenting on how fragile the market was when it was driven by UK/US standards and German banks were right to keep out of it all.
Well - As a post from JMBroad on another topic on this forum has suggested far more German institutions had their fingers in the pot than previously thought and the chickens are indeed on their way home to roost.
JM - Is in a position to know these things.

In the last month I have established good 70% finance for commercial product in Germany and have only just finished celebrating the fact (I have many clients willing to buy commercial at this LTV) It will be interesting to see if this supply survives given the bombshell from JMBroad.

I rarely push myself to more than 50% LTV (My comfort zone and adrenalin requirements are unsophisticated and low)
My German partner secured a cash purchase of a house giving a 38%yield this week. A couple in their early seventies inhabit it with a death convenance which they have asked if I would re-new just to make them feel safe - We did not have to work on this long to agree. Three years ago this would not have raised eyebrows. Nowadays this is indeed a rarity.

I did buy some properties in Bavaria - central locations of major towns- and have a rental yield north of 8% ( Munich is excluded as it only achieves about 5%). An agency did help me in finding financing and LTV close to 80% were achieved. So nothing is impossible but I do not think that LTVs as were found in the UK will ever be found again and especially not in Germany.
This does nevertheless make the purchase self financing and makes it a very good pension investment for me.

Unfortunately I doubt that the mortgage situation in Germany for foreigners will improve very quickly in the short term future.

With regards to Subprime ripple effects in Germany, there are some pretty impressive ripples.

Just recently Bayern LB announced a write down of 4.3 bn Euros, West LB revealed a net loss of 1.6 billion euros in 2007, Deutsche Bank AG expects write-downs of around 2.5 billion euros in the first quarter of 2008 and UBS projected around 7 billion euros (12.5 bn CHF) in write downs.

IKB of course was the first to announce expected losses back in 2007 however the expected 800m loss was recently announced to be "only" 200m.

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Have a nice day

You are right, but although writedowns and credit situation is not really improving, German banks I am in touch with did tell me that they are still willing to finance some acquisitions. Spreads vs swaps will undoutedly be wider but I am told that max LTV has not changed if rental yield and location is correct.