2023-04-17 | The Extra Costs of Buying an Apartment in Berlin
The Extra Costs of Buying an Apartment in Berlin
We’ve written a lot about the various steps to buying an apartment in Berlin, but there are always little details that get overlooked until you’re in the process. When you’re purchasing property in Berlin, you’ll also need to think about all the costs involved and some of them are less obvious than others.
What to factor in the budget when purchasing Berlin property
You’ve gone through the hurdles of researching the city, you’ve gone on appointments to view Berlin apartments, and you’ve finally found the one within your budget, now what?
Your perfect home might be within your budget, but both the additional taxes and fees as well as monthly costs make a big difference in what you’ll actually able to afford. We at Black Label Properties highly recommend working with a tax professional, especially if you come from abroad. A tax consultant will be able to give you the various pieces of information of what will be expected of you when you purchase property and after, as well as give you a better overview of the end-price.
When purchasing a property in Berlin, there are several factors to consider when budgeting for the purchase.
Here are some key points to keep in mind:
- Property Price: The first and most important factor to consider when budgeting for a property purchase is the property price. This will depend on the location, size, and condition of the property.
- Closing Costs: In addition to the property price, there are several closing costs associated with purchasing a property in Berlin, including notary fees, land registration fees, and taxes.
- Property Taxes: Property taxes in Berlin are based on the property’s value and are paid annually. It is important to factor this into your budget when considering the purchase.
- Maintenance and Repair Costs: It is important to budget for ongoing maintenance and repair costs associated with owning a property in Berlin. This includes routine maintenance like cleaning and landscaping, as well as unexpected repairs like fixing a leaky roof.
- Financing Costs: If you are financing the purchase of the property, it is important to consider the interest rate and any fees associated with the mortgage.
- Property Management Fees: If you plan to rent out the property, you will need to budget for property management fees, which can include advertising, tenant screening, and property maintenance.
- Insurance: You will need to insure your property against damage, theft, and liability. The cost of insurance will depend on the value of the property and the coverage you choose.
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Most people don’t have enough funds to buy an apartment in Berlin in one fell swoop, so understanding bank loans and possibilities available to you will be a big part of the purchasing process. Knowledgeable financial advisors will be able to find you the possibilities that best fit your situation and help take you through the process. Obtaining a loan from a German bank is different as a foreigner, but you’ll often be able to get a loan of up to 50% of the property value.
If you’re thinking of buying Berlin property as an investment and letting out the apartment, you’ll also want to consider hiring a property management service (Hausverwaltung). Also if you’re considering renting out the apartment, it’s good to consider furnishing the apartment first to attract more renters. You can purchase all of the furniture yourself and move it into the apartment, but there are also services with complete furniture packages to handle the style and process for you as well.
We recommend that anyone considering buying a property in Berlin should consult a reputable real estate agent or financial advisor who is knowledgeable about the local market to ensure they make an informed decision. In addition, in order to make a successful and profitable real estate investment, it is essential to learn about the property and the surrounding area, and to understand the associated costs and risks.
You can get more information in our Berlin real estate talk witk attorney Volker Mauch and BLP CEO Achim Amann: How to purchase Real Estate in Germany as a Foreigner
36th Berlin Real Estate Talk: Buying real estate as a tax non-resident! With lawyer Volker Mauch