Plauen (Sachsen)

Discussion in 'German Property' started by Cesar, Apr 1, 2009.

  1. Cesar

    Cesar New Member

    Hello !!

    What do you think about PLAUEN ?
    Is it a nice town? Interesting? With life and shoopings?
    What is your opinion about this place generally speaking?
    Many thanks for you help !!
     
  2. Lewis

    Lewis New Member

    Hi Cesar,
    Haven't posted here for a while. Nice to see you're still gathering info.
    Plauen is a very attractive mid size town in a lovely area. There are a few modern developments which are not necessarily desirable but most towns have them somewhere on the periphery.
    Plauen has a reputation amongst my German friends as being a town where people go to die. Many youngsters have upped and moved north or west as there is little work in the area. If you are just looking for a flat for your own use (I remember last time we communicated that was your plan - then Plauen could be for you. But if you've changed your mind and are looking for returns on your outlay the picture is not so rosy. Good luck.
     
  3. Cesar

    Cesar New Member

    Yes, I continue with my search and I can say that unfortunately I already lost 2 opportunities that apparently were excellent.
    They were a small apartment in Plauen for 13.000 euros with furnished kitchen and the other in Leipzig for 15.500 euros. Both around 30 s.m.
    The one in Leipzig I went to visited it ... it was really fine, completely renewed 5 years ago and in an excellent building.
    I just didn't buy it because the next day I had the returning flight and had no time to get someone to do the translation of the contract... didn't want to risk and sign anything in German because I don't speak the language.
    2 weeks later it was already sold !! :(
     
  4. nicknow88

    nicknow88 New Member

    Do NOT!

    Hi Cesar,
    please do not invest in east germany, the market in Sachsen i.e. is not performing and it never will. East germany is loosing population every day and this has very negatve effects on the Property market. Invest in west Germany like Munich, Hamburg, Düsseldorf. The prices are higher but you wont loose your money.

    Nick
     
  5. Cesar

    Cesar New Member

    ahammm , ok ...

    :boring:
     
  6. Peter Wells

    Peter Wells New Member

    Not what I've heard. According to recent statistics, Plauen has the fastest economic growth in Germany! We are doing our research (early days yet!) and I have to say, Plauen is the one place that we keep ending up looking at. Of course it will be a bit of a gamble - but at the current prices I don't see how you can lose.

    Cesar - it seems we are both interested in Plauen. We are planning on flying over in October and checking it out, so if you want to, you can keep in touch with me. (I would give you my email but I'm new and can't do that yet!) Personally, I haven't seen anything yet to put me off. And it does look like a lovely clean town. I can't wait to check it out!
     
  7. Cesar

    Cesar New Member

    Peter, I've sent u a private msg ...
     
  8. Peter Wells

    Peter Wells New Member

    To Cesar

    Hi Cesar! I would love to keep in touch but as I can't give you MY e-mail address, maybe you could give me yours! I would reply to your private message but as a newbie I don't seem to be able to do that either!!

    I have a link to the website that stated... "Plauen has a population of 75,000 and is situated in Sachsen, the best performing county of Germany with the fastest decline in unemployment and the most rapid economic growth in Germany this year."

    See if this works - my email is.... deleted personal info .... minus the spaces of course! Maybe that will sneak past the restriction!

    Will tell you much more via email (don't want to bore the others!!)
     
    Last edited by a moderator: Jul 31, 2010
  9. Cesar

    Cesar New Member

    OK Peter, I will send you a new private message with my e-mail address.
    Hope to hear from you.
     
  10. jishisaidu

    jishisaidu New Member

    hi guys, am new to this forum,,

    I would like to get your help to find out the actual price of property in PLAUEN,, I have been offered two bed room flat with Purchase price €31,850 and NET RENTAL INCOME €4,206 per annum with 100% mortgage, i have to pay €5000 towards purchase.

    Sorry guys I am not familier with German property investment and i dont know how check price of the property online,, here in UK you can do that by visiting few website it will give you approximate price in the area..

    have you heard of this company before ? property365.ie

    your help is much appreciated..
     
  11. Lewis

    Lewis New Member

    A couple of things you need to know before you purchase anywhere.
    WHY DO YOU WISH TO PURCHASE IN THAT PARTICULAR AREA?
    WHAT DO YOU WANT TO USE THE PROPERTY FOR?
    WHAT DO YOU KNOW ABOUT THE AREA?
    CAN YOU SPEAK THE LANGUAGE?
    WHO WILL MANAGE THE PROPERTY IFYOU ARE GOING TO BE AN ABSENT LANDLORD?
    IS TRAVELLING TO AND FROM THE PROPERTY FEASIBLE AND CONVENIENT?
    WHAT IS YOUR EXIT STRATEGY?
    HOW MUCH COMMISSION WILL THIS COMPANY IN IRELAND MAKE ON THE TRANSACTION?
    WHY PURCHASE GERMAN PROPERTY FROM AN IRISH COMPANY WHEN THERE ARE SO MANY LOCAL ESTATE AGENTS WHO WOULD FALL OVER THEMSELVES TO SELL TO YOU?
    WHO IS HANDLING THE LEGAL ASPECT OF THE PURCHASE?
    GERMANS RARELY PURCHASE A HOUSE BY THE NR OF BEDROOMS. THEY WOULD PURCHASE BY OVERALL METERAGE AND IF YOU SEE ON A DESCRIPTION 2ZIMMER IT IS MORE LIKELY TO MEAN THERE ARE ONLY TWO ROOMS AND NOT 2 BED ROOMS - HAVE YOU CHECKED THIS OUT?
    HOW LONG HAVE THE CURRENT TENANTS BEEN RENTING THE PROP?
    DO YOU KNOW HOW TO ARRANGE A SURVEY?

    The list is endless - from the fact that you have had to ask the questions in the first place displays to me you have no knowledge of how the local market works at all. So..... my advice would be to do nothing at all other than research. Have you even been to Plauen? The prices in that part of Germany are hardly likely to skyrocket during the time you are stepping back, taking a mental timeout and doing your homework - they have been attractive and stagnant for some time.
    I have purchased and sold in Germany. I have retired from my business or I would have have been able to assist.
    Beware of (usually unregulated) foreign agents selling property in another area.
    It usually means they are selling another agents properties with a price hike to cover their commission.
    Good luck and remember no need to rush the prices are going nowhere for a while yet.:damnmate:
     
  12. jishisaidu

    jishisaidu New Member

    plauen

    thank you soo much your detailed reply.. I am thinking about going to this part of Germany and do more reaserch:idea:
     
  13. Lewis

    Lewis New Member

    Great now you're thinking like an investor and not a target.
    Just a hint try contacting Cesar (also posting on this subject) I have been in touch with Cesar before on the same subject. He has already purchased in Plauen and his experience may prove helpful to you.
    A useful contact in Eastern Germany is Ilja Baudusch of G & B property source based in Spandau do a google search he's easy to find. I use him to manage my German properties.

    Useful website - Immobilien online - immopool.de - Immobilien weltweit
    top right is the button for English
    Have fun doing it all, stop and think, be clear in what you want from what you're doing and DO NOT PART WITH YOUR MONEY TOO CARELESSLY.:dancing:
     
  14. Cesar

    Cesar New Member

    Hello,
    Currently I'm in Plauen ... but let me advise you that I'm not an investor.
    I just bought a small and cheap flat here last summer for my own use.
    I will be here till the 1st September so if you need to ask anything I will be glad to help.
    The language is a really problem because as I understood few brokers speak english here.
    I also have a very good contact if you need to translate documents german to english ...
    If you give me your e-mail or send me a private message I will write to you.
    Regards.

    PD - Hello Teepeeseller !! :))
     
  15. jishisaidu

    jishisaidu New Member

    plauen

    Guys,, I am also planning a trip to germany maybe next month, i come across company called property365.ie have you guys heard of these guys,, please let me know i need some feed back..

    I like germany since you can get good yeild with minimum rental voids and hopefully you can rent it out without any problem for long years..

    I appreciate if you could keep in touch with me with regards to german investment it will help me alot since i am a newbie in property investment..

    I also would like to ask you guys, if someone offer you a 15% BMV deals in london how you do you know that property has genuine 15% discount..?

    thank you guys
    jishi
     
  16. kap-C

    kap-C New Member

    About Plauen and buying property in Germany

    I own investment properties in Plauen myself and have, as consultant, assisted a number of overseas buyers with the acquisition of investment property in Plauen (and elsewhere in Germany).

    Plauen is a city with a population of approx. 66,000 in the federal state of Saxony (Sachsen). Take a look at the city's website to get a first feel for it (google 'plauen.de', there is also an English section) and check out Google Maps to get an idea of the geographic location. The city is situated approx. 300 km south of Berlin, c. 350 km east of Frankfurt (Main) and c. 250 km north-west of Prague, the capital of the Czech Republic.

    Anyone that considers investing in real estate in Germany should be aware of the importance of the various property markets in - broadly speaking - what used to constitute former East Germany and former West Germany.

    With very few exceptions, such as the area surrounding Berlin in the state of Brandenburg (but not the rest of this state), the cities of Weimar and Rostock (far too expensive at this stage) and - to a certain extent - Leipzig and Dresden, most areas and cities in the former 'East German' states saw a still ongoing and very significant outward migration to the conurbations in the former 'West Germany' since the early 1990s, resulting in dramatic drops in population figures. Accordingly, there is a significant oversupply in residential real estate in most of the eastern, so-called 'new federal states'.

    Population development in Plauen is currently more or less stagnant (i.e. there is not a lot of outward migration), but the existing population is ageing, so that there is an overall net decline in population (as is the case with Germany as a whole). The population decline until 2020 is expected to be c. 10%. Unemployment in Plauen is the lowest within the federal state of Saxony.

    While the 'East German' market often appears to offer quite attractive yields with up to 10% or 12% (in my experience you - unless you are an adventurer and can afford it - might as well forget about anything above this - remember: if it sounds too good to be true it probably isn't!), one should be very cautious about this market. It is not without reason that a lot of German real estate investors say that they will under no circumstances go East with their money! (Then again, German investors are not exactly known as great adventurers.)

    Some people will nevertheless consider this market interesting because it allows them to acquire quite significant properties at what appears to be very reasonable prices or, more generally, to acquire property that they would never be able to acquire elsewhere. It is a buyer's market! A client of mine, for example, bought a fully refurbished property (in Plauen) with 10 apartments and a (sustainable) yield of just above 10% for EUR 300,000. Three years on, he recently extended his Plauen portfolio by two other properties.

    But you want to know what you are doing!

    To start off with, consider all the questions teepeeseller raised above and make sure you tick them off as you go. Do your research. Do not rely on one estate agent or advisor. Go there, walk the place, get a feeling for the place. Do you like it? If you don't like what you see, go away and find somewhere else! Trust your instinct when it tells you 'No!'.

    Be aware of the risk that you are taking - 10% yields come at a price! There are good reasons why institutional investors invest big time in western conurbations at starting yields of 4%. They rely on the excellent lettability, frequent rent increases and almost guaranteed capital appreciation that will be achieved over time. You will not find this in most places in the East.

    Property prices in most locations in the eastern part of Germany do not look likely to increase in any significant way in the foreseeable future because of the general lack in demand by both tenants and investors. The same applies to rents.

    Be aware that it may take a long time to fill a vacant apartment in a lot of East German locations. Will you be able to sustain your mortgage - or simply the ongoing costs (a vacant property costs money!) - for extended periods of time (6-12 months +)? Remember, if you do not keep up your payments, your property may be foreclosed!

    Also remember: It is a tenant's market. So you want a property that is in near-perfect condition (avoid properties that still need work as this will eat up your yield!), a great location (avoid busy main roads!) and that has a very reasonable rent (as determined by the tenant!). Did I mention the balcony?

    I am currently achieving rents of EUR 4.-- per square metre (as compared to twice to three times this amount in western conurbations), a pretty much standard rent for a standard, refurbished apartment (your typical '1-Person-Household' apartment) in Plauen.

    If you have an apartment like this, with, say, 45 square metres, your monthly net rent will be in the region of EUR 180.-- (when someone quotes rents to you, make sure it is the net rent - Kaltmiete - and not the gross rent - Warmmiete -, which includes heating costs etc. and which will totally distort your calculations. Find out how much will be deducted from that to pay for property management, repair funds, if any, etc.). Deduct from the net rent the management fees, payments into the repair fund, property tax etc. and you're left with approx. net EUR 150.-- per month or a true net before tax of EUR 1800.-- per year (not considering any financing costs).

    I recently got a quotation to the amount of EUR 1750.-- to replace four doors and door frames in one of my unrefurbished apartments, i.e. this would cost me a full year's net rent. Then there are new floors, electrics, gas connections ... How many years do I have to rent an apartment for to make back the money of a full refurbishment/renovation? Get my drift?

    Please don't get me wrong, I don't want to put anyone off investing in Germany or in the East of Germany in particular - there are certainly great opportunities everywhere and yes, it is a great market to invest in!

    But I am of the opinion that it is important that people know what they are getting themselves into.

    A good starting point to begin your research on the German real estate market in general is the recently published German Residential Report of Deutsche Bank Research. This will give you some insight into the German residential real estate market as a whole. Read that report and take it from there ...

    Good luck with your investments in Germany, it is a great real estate market!
     
    Last edited: Jun 26, 2011
  17. kap-C

    kap-C New Member

    Hi 'jishiasiaidu',

    Can you give more details of the property, such as square metres, location within Plauen and condition.

    I do not know of any bank in Germany that would provide 100% finance to persons resident in Germany, never mind overseas investors. So,
    who provides the finance? And at what terms?

    What are the €5,000 for that you are to pay out, i.e. more than 15% of the purchase price? Property acquistion tax in Saxony is 3.5%, plus notary's fees (not too much in this case), a few more fees for land registry recordings etc. ...
     
  18. dotsonline

    dotsonline New Member

    Thanks to kap-C for such a good and informative post. I am new to property investing but have looked at the UK (live here), US and Germany. I have pretty much ruled out the US as I don't have the time or finances to travel to look round and view properties. Germany is much more accesible as is the UK but I am trying to keep the financial spend on the property to the min.

    I agree with what has been said before, you need to go visit the property and look round the cities/towns. Also you need the correct team round you for management etc. Whilst the 'turnkey' properties may seem appealing these must be too good to be true.

    There's a well known-ish agent in Berlin that seems to have disappeared from Right Move, am I able to name them and ask if they are closed down/holidaying etc as they seemed to some interesting properties.

    Thanks
     
  19. PETER.PHIL

    PETER.PHIL New Member

    Obama would like to go into World History books as the ultimate citizen of the world. What he must do to accomplish that is to bend the US over backward with a softened behind. Obama does not care about the United States of America.
     
  20. easygermany

    easygermany New Member

    with 365 all the numbers are not correct and quite misleading. The net rent is not true. The Wohngeld on the apartment would also be important, and any planned renovations which you are part liable of course destroying any NET rent. Plaun apartments are available from €10,000. you can use Immo24 - Immobilien Online - mieten und kaufen - vermieten und verkaufen to find comparable prices. Good luck !
     

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