A safe bet: Investing in Berlin real estate

A safe bet: Investing in Berlin real estate

Real estate investment is a coin that is viewed from both sides: opportunistic and risky, but life is a gamble with every decision we make. Is that the right shirt to the interview? Is this car reliable and suitable for my purposes? Do I even need a car or would it be better to use a bike or public transportation? And on it goes. But as our population grows, and as people move to the cities in greater numbers, property is becoming a better and stronger choice of investment, especially in Berlin.

Berlin with its rich history, its dynamic energy and seemingly boundless opportunities has become one of the ‘It” cities in the world over the past decade. Both Germans and foreigners are increasingly moving to Berlin for personal opportunities and adventure. Both beautiful and affordable, Berlin apartments come in all designs from traditional Altbaus with gorgeous wooden floors and windows and decadently high ceilings to extreme, modern luxury new buildings with personal balconies and top-end fixtures.

Investing in Berlin real estate offers one of the best personal and income opportunities when it comes to real estate at the moment. Investment properties, while typically are used to rent out and generate income (with very little effort), also have the dual ability to be one’s own home if desired. Considering Berlin’s reputation for entertainment across the board as well as gorgeous scenery, owning a Berlin apartment is a great excuse to try out the city if desired.

Where Berlin real estate investment gets risky is in understanding the German system … and that is not an easy minefield to navigate. As bureaucracy is a sacred beast in the country, it takes strong knowledge and general consulting on taxes and financing, maintenance, tenant rights, and current policy to figure out how to get started and keep the property lucrative. The Berlin neighborhoods play a big part in possible income generation as well. With rental prices varying greatly between buildings and areas, it’s pivotal to have a good grasp on what is possible and what you can afford to invest into a place and where. Berlin property can greatly represent the lifestyle of its tenants: politicians and CEOs in Mitte, computer programmers and designers in Friedrichshain, gallerists and fashion designers in Kreuzberg, so it’s important to have a sense of the city, and if you want to invest in Berlin property from abroad, then you’ll want people on the ground to assist both in purchasing and in management.

Business is continually growing in Berlin from tech start-ups to urban planning, so while real estate investment always comes with its risks (tenants skipping rent or intense drops in market value) it is not a Vegas-style roll-of-the-dice kind of gamble. It takes research, planning, and a desire to see something great develop over a long period of time. Berlin’s not going anywhere, though. The city has a lot to give and is constantly changing and offering new opportunities for those staying for one year to 50 years.

 

By Alice Bauer