The finer details as a first time investor

[Beaufort1]

We are considering buying 1 property to let in Berlin and financing it by releasing some equity from our family home.

We think we have 2 options with regard to this:

1. remortgage in UK which will mean we will incur transfer costs in converting any rental income from Euro to Sterling to set against said mortgage.

2. Part remortgage here and part mortgage in Germany which would mean the rental income could cover the German mortgage. This seems like more hassle than it's worth but we aren't sure.

Can anyone point us in the right direction or indeed any potential pitfalls in either option.


Also can anyone tell us how to go about the process of completing German tax returns i.e what information will they need and in fact how you go about registering with them in the first place. Is their system like our own in that we can set costs against the income?

 

[Paul]

Hi,

I think Germany is a fairly good bet, I quite fancy living in Berlin myself! Though AFAIK commissions and taxes are still quite high, and the Berlin land tax is higher than the rest of the country.

We just happen to have a section on Germany as part of our new online Info Center (demo it at insidetrack.co.uk) - I'll try and get you some more specific info and get back to you..

Cheers

Paul

 

[berlinprofile]

Hi, Ive been looking into this recently.

Your mortgage in Germany would have to be above €50000 as below this is more hastle than it is worth for the banks. The repayments would have to be covered by the rental income minus 25% (ball park running costs) unless you can prove the running costs are below this. One bank that I spoke to offered up to 68% of the total value again so long as the repayments are covered.