What is your experience of off-plan property investments?

Discussion in 'General Property Investment Discussion' started by FWL, Aug 4, 2019.

  1. mach

    mach New Member

    You can certainly do better than that!! How does 10% down and 15% upon completion with a rental 2 year rental guarantee sound for example?
     
  2. Locoinvestor

    Locoinvestor New Member

    Berlin sounds interesting...what's your experience of purchasing in Germany? I hadn't even thought of it to be honest!
     
  3. mach

    mach New Member

    Yes Germany has shown a lot of promise over the last 15 years or so. I solely focus on developed markets with solid legal precedents for protection of buyers and sellers. My low risk strategy is for sustained pragmatic returns in medium to long-term investments.

    Since I started in this game years ago, have transacted Millions of Dollars worth of business in numerous global cities.

    Please allow me to tell you about Berlin...

    I have been investing in Berlin for over 5 years; Charlottenburg, Mitte and Lichtenburg have been the main areas of interest. Berlin has definitely been the highest growth market in my portfolio for the past 5 years – this is partly due to the supply & demand dynamics of the city and also due to the incredibly lost cost of borrowing (fixed interest rates for 10-15 years from 1.6 - 2.9%).

    investing in Berlin now makes so much sense now as:
    1. The value is still there for more growth
    2. Arguably the most stable economy in Europe
    3. If investors hold their property for 10 years they will pay 0% capital gains tax
    4. Cheap finance – 10 year fixed rate mortgages of 1.6% to 2.9%
    5. A cheap Euro compared to the USD on historical averages
    Berlin Investment Case

    Berlin is not only Germany’s political centre, but also one of the most dynamic economic regions in Europe. With a strong and stable economy, Berlin’s GDP sits at EUR35,627 per capita and exports to the US market alone total over EUR1.7 billion per annum. Its economic structure is diverse and is shaped by long-established industrial firms, strong footed SMEs, a thriving services sector, as well as innovative high-tech businesses.

    This economic strength has been drawing people to the city and in 2016 alone the population increased by over 60,000 inhabitants. Following this trend, the Berlin-Brandenburg statistics office expects a further increase of 7.5% between 2015 and 2030. This will put an upward pressure on property prices, which have been increasing by an average of 6.5% per annum (EUR2,130) since 2004. Furthermore, since 2009 housing demand has risen at increased levels and capital growth rates have averaged 10.9% per annum in response. WOW


    Supply and demand

    Population growth and a booming economy remain the primary demand drivers in the Berlin residential real estate market, as building efforts have not been able to keep up with the demand for new units. Berlin’s housing market is structurally undersupplied with a supply shortfall of at least 80,000 units as of 2016. The Secretary of State for Construction and Housing outlines a requirement for at least an additional 20,000 units per year up until 2030. Only 15,000 units were completed in 2017, well below the annual 20,000-unit requirement.

    The large gap between supply and demand will take a considerable amount of time to diminish and as population levels continue to grow, chronic undersupply will continue to shape the market. This imbalance presents investors with a unique opportunity, as quality units are in high demand for the city’s families and young professionals moving to work in the city.

    Rental Market

    The Berlin rental market has also been profoundly shaped by the forces of supply and demand, evidenced by an extremely low vacancy rate of just 1.2%. This has resulted in consistent levels of rental growth of 6.1% per annum on average since 2006, with rents almost doubling in that time. Additionally, a record 10.7% rental growth was seen in Berlin’s top market segment over 2017, with capital growth rates rising by 11.4% over the same period.

    Regeneration

    At the centre of Mitte, next to Central Station, government buildings and cultural sites, sits one of the city’s most important development areas - Europacity. Made up of approximately 400,000 sqm of gross floor space, Europacity will be a significant mixed use area for all Mitte residents with office space for 10,000 jobs, apartments to house 2,000 people and many bars, restaurants and art galleries.

    With a lack of office space available, it is projected that Berlin requires 1.5 million sqm of office space to meet current demand, yet there are few large-scale projects in production. This deficit bodes well for the projects in Europacity, which contains 232,000 sqm of planned office space and has meant the office blocks have been quickly snapped up by companies. Europacity is being built in stages, with many buildings already fully finished, and is due for completion in 2025. This project will create an entirely new commercial, residential and recreational area of the city.

    WHAT ARE ALL YOU INVESTORS WAITING FOR :) :) :)
     
  4. lookinginvest

    lookinginvest Member

    How is the German economy going to cope with a struggling European Union? Will Germany be asked to commit more and more money to the EU project? This is my major concern.
     
  5. mach

    mach New Member

    I hear what you are saying but sometimes I truly do feel that people are looking for issues that really do not effect the matter at hand.

    What I AWLAYS say to my clients and in general to my friends family and close ones, The PROTECTION that a particular market offers you is THE MOST important factor when coming to look at property investments.

    For me personally I believe, for FOREIGN Investors the European Markets are your safest bets. YES EVEN DESPITE BREXIT!!

    In fact I will go as far as saying that Brexit has only done wonders for the property Markets in Europe.

    Listen we are talking about some of the strongest economies in the world and all you need to do is look at the statistics related to Real estate growth in the region AFTER the EU Referendum. Its just growing.

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    The Second thing I ALWAYS say is, it is not enough to say that a particular COUNTRY is a good place to invest, you have to look right down to the city, street and even the unit you are investing in.

    Let me ask you this. The Billions of pounds that are being pumped into the northern power house in the UK HS2, Media City 2 etc which are actually ongoing RIGHT NOW AS I WRITE THESE WORDS (Just prior to the decision on BREXIT), do you think that in an economy such as the UK, these works will come grinding to a halt? Constructions works half completed?

    Do you think that company's such as Amazon and 80 of the 100 FTSE company's and many more impressive firms would relocate there Hubs to places like Manchester, again in the midst of the referendum, be doing so because they are oblivious to the risks or do you believe that they know what they are doing? Creating literally THOUSANDS of jobs.

    Do you think that the people will stop going to Universities in that area? The occupancy rates in these locations are 98%-99% where Demand way outweighs Supply.

    Berlin... has long enjoyed the status as a European center for art and nightlife, and in recent years the city’s relatively low real estate prices, reasonable cost of living and wealth of local talent have helped position it as a center of technology start ups and entrepreneurs on the continent.

    In the first quarter of 2017 (again amidst the referendum), the city saw USD140 million invested in its fintech industry, the second largest amount in Europe. Companies, such as Penta, Swiss Bank and Samsung NEXT have realised the great potential of the German capital and are relocating to Berlin in preparation for the upcoming changes to the EU. This healthy growing ecosystem is pulling an excitingly diverse pool of talent and expertise, with roughly one-fifth of local start ups having relocated from out of town.
    Already home to success stories such as SoundCloud and offering attractive funding programs, McKinsey estimates Berlin start-ups will generate 100,000 jobs by 2020, demonstrating that the city’s standing as one of Europe’s leading start-up capitals does not appear to be going anywhere.

    Listen, people are not looking at what is actually going on in front of them, granted they may not know all of this information and yes this is what I do for a living (which is how I do know all of this), but this is the truth, you are looking at it from the wrong angle. We are not talking about GERMANY or ENGLAND etc, we are talking about BERLIN or MANCHESTER etc.

    I can go on and on why NOW in the face of BREXIT, property is really the only place you can invest your money to keep it safe from the effects of Brexit.

    Look at where you are investing stop focusing so much on BREXIT, I find it is an excuse for people who do not really understand what is going on and are using it as a way to wait on property investment not knowing that in the RIGHT places NOW IS THE TIME TO STRIKE!! For people who DO see this, which if I may say ranges in the Thousands, myself AND my Clients included are benefiting from the effects to no end.

    The reasons why Brexit is only strengthening the reasons to invest in property I could fill another page with.
     
  6. I believe that Brexit will give the UK a great boost in the medium to longer term - lets not forget about the commonwealth which gives the UK access to more than 2 billion people. However, I am not convinced that the EU super power model will work - there are just too many countries taking more out of the pot than they put in. Germany will be the main funder and expected to bail everyone out.
     
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