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August 26th, 2008comments disabled test
TV Report about Trend towards New Building in Prenzlauerberg
April 22nd, 2008This TV Report from Berlin based RBB (state owned) shows the new trend towards new buildings in Prenzlauerberg.
Click here to open the video (in German).
Real Estate project development in the center of East Berlin 80% let before start
January 30th, 2008
IVG Development announced yesterday the start of a new development close to Hackescher Markt and the Museums Island in the city center of Berlin (East). The project called “Hackesches Quartier” with rental floor space of 36,600 square meters of whom 80 per cent has been marketed before the start of the construction. Main renter of the 24.850 m² office space are Berlin based Gas supplier GASAG Berliner Gaswerke AG (8.500 m²), and Berlin based advertising and creative agency Scholz & Friends AG (8.000 m²). Buyer of the 145 Serviced Apartments with luxury standard (7.680 m²) is Hotel operator Adina Europe Ltd., a leading operator of serviced apartments in Europe and Australia all ready serving the Berlin market.
More Research about Berlin Estate Market from Liegenschaftsfond
January 29th, 2008According to the March Issue 2007 of “BERLIN ESTATE NEWS” of Liegenschaftsfond:
“2006 was a boom year for the Berlin real estate market. The appeal of Berlin as a
real estate location will continue through 2007. In comparison to other major European
cities, property prices are still pretty low. In a comparison of German cities too,
Berlin has the lowest rents by far.”
Read the whole report about Berlin Real Estate trends according to Liegenschaftsfond.
IBB Housing Real Estate Market Report Berlin 2006 Summary
January 29th, 2008IBB (Investitions Bank Berlin, a state owned bank) issued this report about housing and real estate trends in Berlin in 2006. Make sure you compare it with the 2005 Housing Report to get the trends.
Tax breacks while investing in German Heritage Buildings
January 16th, 2008According to German Income Tax Law (§ 7i EStG) Investments in the restoration of a heritage building are subject to faster than usally possible tax write offs.
The same applies for restoration of buildings in redevelopment areas [German Income Tax Law (§ 7 h EStG)].
Normal write offs are 2,5% per year for 50 years = 100%
The amount legible for write off is NOT the buying costs, nor the land, nor the buying side costs, BUT only the amount put into the restoration of the protected building after the sale.
Different write offs for different usage
Investments in buy-to-let property are handle little different than investments in properties for self usage:
Tax-write offs for buy-to-let investments
While renting the property the tax breaks are slightly different:
8 years with 9 % p. a. and the following 4 years with 7 % p. a. (§ 7 i EStG) = 100%
Write-offs for restoration in buildings for self usage
are 10 years with 9 % p. a. (§ 10 f EStG) = 90%
Because of this laws most heritage buildings are offered without restoration, and typically one signes a separate contract for the construction.
The start after the sale is very important to not loose the write off possibilities.
Property in East Germany is better than most (West) Germans think
January 15th, 2008According to an article about East German property “Fast vergessene Perlen im Osten” from Heiko Metzger in Financial Times Deutschland (Print issue 03.01.2008) some local markets in East Germany are more than worth a look.
Take Jena e.g. the vacancy rate at 2.2% is lower than in most West German cities.
Potsdam e.g. has the highest rate of people working in the service industry troughout Germany, while in addition having the youngest population at all.
It seems that foreigners are the first who discoverd this opportunity. Especially West Germans tend not to invest in East German property. This is based on a couple of prejudices about “the East” as well as on experience at the end of the ninties when the mainly high-income-investors put their money, driven by a heavy tax-refunds into East German Building Developments.
A couple of investments were just spend based on the tax-refund while the builidng itself didn’t even had renters.
Guide to Renting Out Property in Germany
December 1st, 2007Berlin Real Estate driven by Lifestyle?
November 13th, 2007If Berlin is not only an investment vehicle for you but you enjoy the lifestyle of this city, this map with cool stuff (shops) of Berlin Mitte might be something for you:
The site:
i love cool stuff
Downolad the map (direct link to the PDF, it will open in your browser)
Berlin Real Estate Question “Will we loose money?”
November 12th, 2007This happens all day, somebody writes an email to us, after he came back from a Berlin House Hunting trip (via one of the big marketig maschines).
The situation is the following, after a presentation and the visit of two properties the people have signed a LOI and payed a Down-Payment to the agent (that they will loose if they don’t finally sign the deal).
The first property the yhave visited is in a good area like Charlottenburg, but sold out.
The second one is in a more or less good are like Schöneberg or Steglitz and here they are still some flats available. But the agent things its necessar to sign a LOI and pay a downpayment because all the guys in the group want a flat and demand is high.
All is risk free, the people don’t need to come back to Germany, the have a rent garantee, and a lawyer is available for the next 10 years. Potential is 5-10% annual, because of facts like the new Airport and overall demand in the capital of Germany.
Back home these people hav a strange feeling and start to do some research, some of the write us an email.
This is one of our original answers.:
Dear XX,
you obviously buy from one of the big marketing machines, like XXX.
Did you make a Down payment (that you will loose when you don’t sign the deal?)
First of all you have to ask yourself if you wanna loose this down payment.
Second, you have to ask yourself if you are ok with a “C-Investment” like I use to say.
A-B-C-Investments would not loose money but:
A-Investments have yield and capital appreciation (potential)
B-Investments have yield or capital appreciation (potential)
C-Investments will not outperform the market nor in yield neither in capital gains.
D-Investments, will not loose you money but you (hopefully) will security your money agains deflation.
E-Investments, are highly likely to loose you money because there is no demand, no renter and if there is one you have trouble.
The area that you will buy has little dynamic, and therefore has only C-Potential.
Nevertheless I am a German Broker without London growth experience and therefore might be wrong, but I know German Renter Laws and the restrictive potential for hughe capital gains that comes with it.
I don’t say you will loose money but you are here to make money, and I think you can have better investments (as the ones I send you).
You pay money (via a slightly higher purchase price) to cover all those cost for rent pooling, lawyers etc.
As you said its a one-stop-shop and you don’t even have to come back to Germany, obviously somebody makes money with some buzz-words like “under evaluated capital of the biggest European (or even world) economy”, new “airport” high demand, blablabla.
In terms of flat Investment there are in my opinion two ways to go.:
1.) high priced (up to 2000 Euro/m2) demanded and dynamic locations like Mitte & Prenzlauerberg (capital appreciation potential high, while having a low yield, because risk is obviously very low)
2.) low priced housing in areas with good demand in a good to new condition in areas like Oberschöneweide or Niederschöneweide, Weissensee, Adlershof (sience location) for lets say 1100 to 1450 Euro/m2 (yield potential high, capital gains ok)
I would highly appreciate if you would become a client of us and if you would buy via our brokerage company, our broker for flats is XXX, he is well experienced and has a lot of knowledge regarding the process you are stuck in right know.
Btw.: You are not the first one pulling the plug after our consultation.
Best Regards,
Alexander Korte
P.S.: Do you get money out of the rent pool if the rent is higher than the garanteed one?
Do yourself a favour and sign up for your research material and our map that shows outperforming areas (in our opinion).
You find the Berlin Real Estate Research Material here: www.berlininvestment.com
tags: berlin real estate, rentpooling, berlin property
