Rental rules mean you will find it hard to increase rent by more than 7% a year.

How would you be able to increase the rent by 7% without having voids? 7% is an enormous increase - I rented in Munich for 4 or 5 years and didn't have any increases. And that was from 2000 or so onwards, when the rental market was pretty tight.

Does anyone have any experience of raising a foreign currency mortgage in this country to finance a purchase abroad?

I understand that this is relatively straightforward if the loan is secured on UK property, but are there any companies that will lend against the security of a foreign property?

This would seem to be a simpler option than trying to obtain a mortgage in Germany.

Hi,

my mate is German and works for a Property Investment firm in London. Her dad has been dealing in Properties in Germany for about 25 and really knows the market. I've bought a flat in Hamburg bout 4 weeks ago. I don't think I'm allowed to put their email address on this board but you can email me and I'll pass on her details.

Hello all,
I am here asking to pick your brains please. I am sixty years old this year and due to bad health I must consider taking early retirement 'cos if I wait till I'm 65 I might not be around (Doctors succinct warning to get out of the rat race or else) I started looking around for a place to retire when I was about 55. My wife died 3 years ago so I have no one else to consider except myself on this decision. For the last 3 years I've been holidaying twice a year in Germany.
I would like to start taking steps to retiring on the Baltic coast as I enjoy sailing and fishing. My German is not wonderful but I can make a go of it and generally make myself understood.
I have never invested in property abroad before although I have had a holiday lodge in Devon for years. I see from this forum that many of you consider Germany to be cheap (I don't care about investment value) It's just a place to live to me. I really would like to take the step and go for it. I have a granny flat available to me over my son's garage in the UK so I'll never be homeless if I have to give up and come home.
Am I being realistic or merely being a silly old sod?

RS,
No-one else seems williing to jump in on your behalf so I'm temporarily going to pitch in to help you.
No you're not being a silly old anything. You just have a dream and if you wish to pursue then do so. I know the Baltic coast as well as anyone posting here and it's a magical place (winters can be harsh though - be warned). There are some beautiful little harbours and Rostock itself is worth considering if you want to be closer to the city life. Berlin is fairly accessible by train or car and if you go west so is Hamburg.
I am no longer active as an agent but I have contacts. Contact me via my e-mail, you'll find it under profile and if you decide you really want to go ahead - and there's no reason why you should not if it really is what you want to do then I'll make certain you get exactly what you want and don't fall foul of predators and officialdom. Tell me more about yourself and what and when you want to do it when you contact me - leave a phone number I can get you on in the evenings.
I'm not making money on anything I give you - like I said I no longer do this for a living. Retired a couple of weeks ago in fact. I still have a reputation for getting a client what they want and I'll do my best for you. If you want to go solo - and there's no reason why you can't then fine but the offer is there.

RS - You are a resourceful character aren't you. Got your phone message - though God knows how you got my number!!!!
I will be at home on Wednesday evening I will call you for a chat then. DO NOT GIVE MY NUMBER OUT ON ANY FORUM PLEASE - I value my solitude since retiring.

Leipzig Property...Financing Advice ?

I am a naive overseas inverstor looking at Leipzig as a potential investment. I should be getting a good yield because of the risk of the high unemployment and problematic re-letting.

Does anyone have any advice on how to approach Leipzig and/ or advice on where and what to invest in in the city. Finally, has anyone had any success financing the property at any decent leverage level?

Much Appreciated,
Ryan

Contact Saxony Property Services Ltd TEL -01527 527 666
They have successfully secured a reputable source for financing/BTL in Germany - I know 'cos I helped them set it up.
My latest info is it will be ready for the off in about six weeks. Give them a call.

Does anyone know about the income tax situation in Germany regarding rented property?

Specifically, can I offset mortgage interest against rental income to reduce income tax which I would pay on rent recieved for a property which I own?

Yes you can offset interest from rental income. Even better if you structure part of your mortgage as a life insurance vehicle you can deduct the life insurance payments.

@ryan: Re-letting is not so difficult. There are some quarters in Leipzig, where the market has turned to a landlord-market (i. e. Musikviertel, Schleussig, Gohlis-Süd). For our own investments we do look for today underestimated quarters. Financing the property depends on the rental income; it is quite easy to get a loan of tenfold yearly rent.

Hi Guys,

if anyone is interested I have a 4 Bedroom Detatched house in Ovelgönne (Landkreis Celle, in Niedersachsen) 20 mins to Hannover 10min to the Beutiful Town of Celle

for €135000 (about 97,000 Pounds) (no Agent fees!)

for full details have a look at this Link

Thanks

Andrew

I looked at buying property in Berlin quite seriously about 18 months ago. I recently started looking again and to my surprise it seems that prices haven't really increased. In fact, in some areas prices literally seem too good to be too. If I was to buy anywhere in Europe now then Berlin would probably be my first choice, but I'm just wondering how long it will take before any captial appreciation is really seen. Does anybody have any views on this?

I looked at Germany a couple of years ago...and agree prices haven't done much. There is also the hassle of language factor also there are quite high taxes and agency fees.

An easier option would be to look at Stock Exchange listed German Property Funds which seem a much easier way to get exposure to that market.

German properties do offer decent yields though unlike our own market so you have probably got limited downside.

That's the problem, I don't really see many great yields. You see properties advertised which are only 40k Euros and and yet only have a 5% yield. This implies that Germans are renting such apartments for only 2k a year.

I didn't realise that taxes were so high? Even so, if you're tax resident in England then the UK government will only tax you what other countries' governments don't anyway. That's the classic trap which people fall into when they buy in the middle east and assume that they don't have to pay capital gains on appreciation or income tax on rental income.

I bought in Berlin about 2 years ago.

I spoke to Estate Agents in the autumn and they said that prices hadn't really moved, but were beginning to follow the rental price rise which has been going on for a couple of years now.

Scanning the adverts I would definitely say asking prices have risen (maybe about 10% in the last year or two).. But that is just subjective.

Cost of buying with Agents fees and taxes is a bit of a pain, so short term turnaround is not going to be that profitable.

Having said that I'm now thinking of selling my 1 bed and upgrading while the prices are still incredibly low...

There is an interesting market report out and the picture is quite differentiated from district to district. Overall the price increase (actual contracts) was 15% in 2006 with not much change in 2007. So it really depends on the area and your purchase price relative to the market whether you coukd already cash in or have to wait longer.

Hi. Where can I see this report? Thanks.

I think Berlin is a great city. It makes a great place to invest but also a great city to live in. Its brimming with history and culture. A real ineresting city and I think it has all the qualitys of any of the great citys in the world, New york, Paris, London, Amsterdam. Its full of artists, musicians, a party somewhere every night of the week.
There is always something to do, and no one seems to get on your case if you do someting wrong.
You can be yourself in Berlin.

Anyway, If your tired of all the Slick talking real estate agents, and anybody needs a hands on real estate agent in Berlin to weed out a good property, send me a message or give me a ring. I'm always happyt help new people discover Berlin!
My friend works for Real estate agency and he found me some great stuff in Prenzlauberg at a great price

My number is +4915153508364

Sorry I have missed your reply for so long. You can download the report on www.berlin-portfolio.com. The link is on the left hand side, all the way at the bottom.

That is exactly the feeling I am getting. In 2006 Yields went down rapidly (due to prices going up) and it was hard to make a deal on appartment blocks. By late 2007 I was getting more and more contacted again by estate agents having to shift property. Also there is no further decline in yields. Financing has been tightened again and rates have increased. To me this says the market has cooled down a bit.

Still Berlin is a great city. Would not mind spending some time in Prenzel or Kreuzberg.

Property investment is considered a lucrative business option. More and more people are buying investment property in order to earn revenues continuously. With property value rising over time, your investment will help attain capital growth.

I do so love these retro posts. Please keep them coming and brighten up my day

Well it keeps some idiots with the feeling of importance and power.

There are some good reasons to look at Germany as a place for overseas property investment. Just like its neighbours in Austria and France it too has beautiful countryside and scenery to offer. Low houses prices coupled with low demand by Germans for its housing make it a good reason to stop and stare at the German housing market.

Just back from Germany, not looking at housing, but talking to financial services businesses.

I read here about why investing in Germany is great, yields high, plenty to buy, prices cheap because they haven't risen.

You might want to know what the Germans think.

For years they have been worried about the population ageing, population declining, and worried about who'd buy all the houses as there was oversupply. They are thrilled that so much international money has appeared and bought, they just wonder how long they will want to own languishing assets. Cheap for a reason that doesn't look like changing for a while....

Germany is complex - it is a large country. There is evidence to support that prices and rents are rising in most Berlin districts, the population is growing and unemployment is falling. This is not speculation - it is fact. Then you have to look at the local reasons for this. Buying blocks is better for an investor than apartments beacuse you can borrow much more, still at good fixed rates (approx 5.3% for 5 years) with good yield (10% or more in good locations after optimisation). The exit strategy will vary between properties. With blocks you can sell individual apartments as they become empty (normally the leaving tenant is responsible for refurbishment), or you can continue to increase the rent through different, legal means. The economy is strong; The surprisingly strong data from QI 2008 (released by the German statistics office) shows that the economy grew by 1.5% compared to the QIV 2007 - the best result in 12 years! Compared to the same period last year the first quarter posted a staggering GDP growth of 2.6%! (The UK economy grew by a mere 0.4% in QI 2008.) There are also many good potential areas to invest in if you know how to do it e.g. Hamburg and Fehmarn where a bridge will start to be built between Denmark and Germany starting next year. Germany will not boom. It the right locations it will have slow sustainable growth and secure rent but the possibility of making significant profits by other means. The German market is logical while so many others are not. In the ever increasing, competitive Global economy and with rising oil prices, Germany will prosper while many other economies and their property markets will weaken (UK, Ireland, Spain) and any countries where a large part of the GDP relates to tourism or low cost travel e.g. Bulgaria and Romania. The world is changing fast. Germany in my opinion is the safest place to invest.

Seamus McConville

Gone are the days of property gold rush. ..
but if you want a safe, steady, predictable property investment then germany is your best bet
The germans have set up the infranstructure in a balanced sense. They dont want the quick buck property flippers coming in and overheating they're economy. This, refected in the ever strengthening euro. But even with that said, the german attititudes to property as a way of investment is changing. As the next generation of germans are coming into play they are seeing they're parents not prospuring from pensions/savings and so fourth.
also the german minister for property taxations has drafted a preposal to relax tax on property in german nationals.
Great country
And if you want a real good investment go to East Berlin, when they finish the new international airport next year there will be an influx of new blood that has never seen berlin before, it is the most underpriced capital city in europe and prbably the most cultured

Very true. Attached (hopefully it works) the Berlin Housing Market Survey 2007. It is quite enlightening

Sorry for some reason I cannot attach the pdf file. Don't have the link anymore. Sorry guys.

We are planning to buy two apartments in Germany as an investment, buy to let.

We are wondering what the tax will be exactly, i.e. what percentage of rental income (would we pay anything in addition in the UK?

We will get a mortgage in Germany and know that if we were earning in Germany we could get a tax break for the interest we pay. Does a similar tax break apply to our income tax that we pay in the UK?

Would be grateful for further information. We mainly are after figures so that we can calculate what we are left with after a few years...

Many thanks.

Spirrelli
I believe you can offset and get tax relief in the UK once you have paid Tax Caps gains in Germany (E.U)
You can for sure get german tax relief when you offset it against a german mortgage and any other expenditures which is great
Capital gains tax in germany is 19% i do believe

I hope this helps

Many thanks, This sounds good. We are about to (hopefully) get a Mortgage approved with a German bank these days... Best redards.