Berlin property

[Lucio]

What kind of property can I afford in Berlin with €60000?
- rent on avrage you gain from €60000 properties
- service charge cost
-cost for estate agent let the property
-
tax to pay if you rent it out as foregnier investor

Has anybody the knowledge to answer the above points ? Thank you

 

[mountpleasant]

berlin

Hello. In Berlin, the prices have increased a bit you would say in the last years. perhaps 60k eur will allow for a small apartment in some average or below suburbs. Yields, net of all costs, are probably around 4-6%, depends on the deal I guess.

I would recommend getting an idea to the market from the property portal immoscout.

This portal works well with Google Translator if german is not so easy for you, and will let you search for sales to your budget and also show what rental prices are in the area. Management costs around usually around 20-25 Eur per month to collect the rent. Be careful, with single apartments to include in your calculations the so-called "wohngeld" which covers all the bills for the property. This must be deducted from the gross rent, as well as the management fee, to get to the net rent figure. If you are flexible, and seek a market where prices have not increased so much and so higher net yields, then cities such as Leipzig, Bremen, Wuppertal and other smaller cities may be also worth a research.

Hope that helps.

mat

 

[kap-C]

Here is a specific example:

Apartment with 68 square metres in an apartment block in Berlin-Marzahn, a borough in the eastern part of the city that is characterized by precast concrete apartment blocks from the communist era. This apartment block was constructed in 1986 and fully refurbished and modernized in 1998. Marzahn would not be considered a top location within Berlin. However, the apartment is now let to the same tenant for more than ten years, i.e. it is creating a steady stream of income.

Asking price: EUR 63,000
Rent per square meter: c. EUR 4.87 (which corresponds to the going rate for this type of property in this location)

Net rent per month: EUR 331.49
Ancillary costs paid by tenant: EUR 152.85
Gross rent per month (that tenant pays to you): EUR 484.34

"Hausgeld"/"Wohngeld" (what you pay to the management company, incl. heating, management costs and payment into a repair funds etc.): EUR 199.00

Actual Net Rent per Month (i.e. what you keep): EUR 285.34

That corresponds to an actual net yield p.a. of 5.4% and a gross yield (based on net rent) of 6.3%. Yields in better locations in Berlin are (significantly) lower.

You will have to make a tax return in Germany and pay tax on your rental income. This is normally in the region of 20-25%. However, you can deduct all expenses, including inspection trips to Berlin, from this, so that your actual tax liability should be quite low at this level of rental income. You should consult a German tax advisor in this respect.

Letting agents in Berlin are generally paid by the tenant. This varies from city to city in Germany. In some locations, the letting agent is paid by the landlord.

 

[Berlininsider]

Hello Lucio,

As an estate agent myself, I want to stress two very important points to begin with:

1. Your question is a bit vague. As in every city, there are very different areas in Berlin, which affect the purchase price as well as the rental income. Both also increase when the apartment is on a higher floor and especially if a lift is available. You can indeed find an apartment for 60 K in Berlin, however you really need to decide first what you want and where. As one person wrote above, there is an offer like that in Marzahn. You might find an apt. there on a higher floor, thus with more light. In Prenzlauer Berg or Mitte you would probably find an apt. for that price on the ground floor in the side wing in a building that requires renovation, which means that your real price is higher when considering later renovation costs. It is best to find an apt. in an area where you yourself would feel comfortable, because that is where tenants like you will also feel comfortable.

2. The yields listed above would seem to be a bit optimistic to me. I am not saying that this cannot happen, but remember that advertised yields in Berlin often do not take into account all of your true costs, such as notary (2% of price),Land Transfer Tax (5% in Berlin) as well as the commission (6% is common in Berlin). You must also consider the monthly maintenance costs. Someone quite correctly wrote above that this is mostly taken on by the tenant, it is important to note that there are at least 2 categories in these costs that the owner cannot pass onto the tenant; fee of the building management company (20-30 Eur/ mo) and payment into the emergency maintenance fund, which is set by the home owners assoc in the building. I would suggest that 3-4% yield or lower is not uncommon.

There are no special taxes for foreigners in Germany. The rent per sq metre you can get varies greatly; between 3 - 18 EUR, or perhaps even higher. To get an idea it is best to put the address of an interesting apt. into immoscout and look for similiar apts in the area and see what they are looking for in rent. I do give my clients an honest opinion on potential rent for apts I sell, but sadly many estate agents in Berlin are often less than honest and try to make the sale rather than properly advise, so I would always suggest you look this information up yourself before making a final decision!

Be wary of offers that look really good, maybe they are, but...ALWAYS ask to see the cellar. That is where many costly time bombs are ticking! Trust your nose, is the cellar particularly wet...too much esp for a dry day? Are the elec cables newer? Water lines, gas lines...old, rusty? Is there mold? Does the foundation look decent to the eye? Ask the estate agent if there have been any issues in the last years. Agents are not allowed to lie, but often they only tell you certain things when you ask. Better yet, get them to answer in writing.

I really hate to have to warn about estate agents in Berlin. I have been doing this for years and am proud of doing good work and giving good advice. Sadly, I have seen many others who are not competent or less than honest, which is why I am in this forum...to counter that.

I hope this helps!