05 Jan Letting out personal apartments: Berlin’s growing trend
Who’s letting out apartments in Berlin and to whom
All eyes are on Berlin these days. It’s a capital of capital: cultural capital and investment capital. It is the latter, though, that is developing like a stallion out of the gate, but it’s coming in a new way.
Berlin is changing, and we’re watching it happen in front of our eyes. The city is growing considerably with Germans, other Europeans and outside foreigners rushing to have their piece of the Berlin dream, their moment in the frenetic energy, the endless parties, and professional opportunity that is burgeoning at an unimaginable rate. Kreuzberg has evolved from the gritty art sphere to the start-up center. Artists and creative are still abundant as ever, but the demographic is becoming more dynamic with young techies, foreign students, investors and many others who have a more mobile lifestyle.
The flow of techies is materializing into possible capital flow, and many investors have already gotten on the bandwagon. Foreign investors have taken a close look at the little Athens on the Spree and have seen opportunity. It’s because of this opportunism that the skyline is now heavily dusted with cranes against the sunset. With Berlin being rated 2017’s #1 property spot in Europe, building has commenced to bring forth more and more.
And while large developers and extremely wealthy foreign investors are the general vision of the change, individuals are playing their part in the real estate investment game as well. It is not uncommon now for people to buy an apartment with the intention to both live in it and let it out. Buying property as investment capital traditionally sees someone buying a property to simply have and rent out. There’s little work involved, a little bit of simple maintenance, and when the investor isn’t living in the city or country a local management company is there to deal with issues that arrive. While this is still very much the case, Berlin bells ring for many, and the city is seeing a strong growth of people interested in having the best of both worlds.
Digital nomads are strong players in this come and go game of Berlin real estate investment. With the ability to come and go as they please, tech professionals have a strong and safe sense of job security and opportunity in the city, and lofts are a perfect live-work choice for them. Various jobs are available and working remotely is a norm for many. Why not spend the summers in Berlin and let out your property for extra cash while living and working in Australia during the harsh Berlin winters?
Property investment is also a choice made by many parents for their children. With affordable tuition and reputable schools, Germany has become a hotspot for foreign students. Many parents have decided to invest even further in the children’s future and buy them apartments. This system is working for both Erasmus (study abroad) students and full-time students. A student can live in the apartment for their year abroad and rent it out while they finish their degree back home. At the other end, for students enrolled in a full program can let out the apartment during a semester abroad or if they search for jobs in another city. Parents know their children are safe and comfortable and income can easily be generated while they’re gone. Germany is also unique in that if a real estate investor no longer wants to hold on to their property, if it’s sold after 10 years of purchase, the income is not taxable.
Professionally, academically and financially, Berlin is a multifaceted city that’s offering opportunities in many different ways. Both the population and the look of the city are developing and changing, and there seems to be no end in sight.
By Alice Bauer