Posted at 03.09.2019 | | in Market news
Berlin: How can you make a successful investment in todays Berlin property market?
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How can you make a successful investment in todays Berlin property market??
Part three of our three-part guide: The Future of Property Investment in Berlin
If you have read the → first two parts of this series on the future of property investment in Berlin, you may well be wondering if it is worth coming here as a new investor. The short answer to this question is “yes”, but you will need to invest differently from the kinds of exiting investors we were → discussing in part two, and here we cover the key points we think you need to consider to make a successful investment.
Where should I be buying an investment property in Berlin now?
The first thing you should do in our opinion is look outside “The Ring”. By “The Ring” we mean the → Berlin S-Bahn Ring line, which has become the almost mythical location within which it is only possible to buy an investment property. This is the equivalent of saying to a Londoner that there is no worthwhile life outside of the → Circle Line on the London Underground for instance. Plainly that is nonsense.
With prices in the central areas of Berlin having increased so sharply, and areas such as → Kreuzberg and → Neukolln the continued subject of hype in the domestic and → international media, the attention of normal Berliners looking for an affordable home and quality of life has moved outside the Ring area – as have many developers who are looking to build homes for such people to buy or rent. Even as a regular visitor to Berlin, you may not have heard of → Pankow, Karlshorst, Lichtenberg, → Steglitz and Zehlendorf or Reinickendorf, but just in the case of the last location alone, almost 73,000 have and already live there.
With a property vacancy rate of little over 1% in Berlin, there is demand for decent property across the city, and in areas a little further out you will find better value for money and also less limitations on how you can improve your property from the → Milieuschutz regulations that principally apply to city centre areas.
What kind of investment property in Berlin should I buy?
Berlin is a city of apartments, and when most people are looking for investment properties, apartments are what they will buy. We still have clients contacting us looking for that cheap run-down hidden gem property that they can snap up and turn-around, but for these people are mostly ten years too late.
Some investors are reluctant to purchase ground floor or upper floor apartments, for either security or accessibility reasons (the latter in old buildings without lifts), but if you buy wisely you could find better purchase prices for these kinds of apartments and, even if you restrict the range of tenants you might attract, there will still be someone who wants your apartment.
With all the current and proposed rent restrictions, it is worth noting that there are some very limited exceptions – new apartments that have not previously been let, apartments that have been extensively refurbished, or single and double family houses. Yes, Berlin does also have houses, mostly in more suburban locations, but these could be an interesting and sensible alternative for the long-term investor. Many of the once separate towns and villages that were on the outskirts of Berlin – like → Spandau in the west or → Biesdorf in the east – have been absorbed into the metropolis and are well connected by public transport to the centre.
How long should I be investing in Berlin for?
Investment in the Berlin property market is designed to be long-term. As we have covered in part two, you should ideally look to hold your investment property for ten years unless you have a compelling reason to sell earlier. Given the → additional costs associated with buying property of around 15% on top of the purchase price, “flipping” property here is rarely a good investment option.
How can Black Label Properties help you make a good investment?
We believe giving honest advice is the start, and hopefully this series of articles plus the other information, → videos and → downloads you can find on our website can help you decide whether taking the next step towards → investing in the Berlin property market is right for you.
If you do, apart from our own knowledge and expertise, we can also link you up with the other areas of → professional support you may need to help you make a good investment – such as lawyers, notaries, accountants, tax and mortgage advisors. Once you feel comfortable that you understand the market and have the advice you need, we can start to discuss specific properties with you and also provide a → letting and management service for the life of your investment.
There is so single right answer for everyone. We believe our job is to be able to find the best investment solution for you based on your individual circumstances. → Contact us now to find out more about how we can help you make a successful investment in the Berlin property market.