A London based agent has offered me the following;

Studios in Buckow, West Berlin
Refurbished 2004
Being sold by a lender
Tenants are council tenants so all rent is guaranteed by state

11km from the Mitte (centre)
5.8km from Schoenfield Airport (currently under total renovation to become Brandenburg International Airport to cater for 20m passangers pa)

Owners can sell - on but the rent guarantee ends then (which is good, because a new owner might want more rent in return for paying a higher purchase price)
I am told the tenants would leave upon selling (this doesnt seem right so needs verification)
Ive converted into pounds but all figures are approximate

Price £32000 (5 euros per m2 x 35m2)
Purchase costs (Tax & Notary) = 6%
10 year guaranteed rent £1150 pa (after full management charges of £350 pa).
Apparently any repairs will not be charged to owner
Certain costs are payable on - going by the owner but will be re - imbursed via the management company

60% Mortgages available


MY OPINION:

Low capital outlay with sunstantial capital growth prospects. Virtually risk free.
Very low yield (c3,5% based on purchase cost without the 6% aquisition costs).
Guaranteed rent for 10 years.
Good strategic location given the airport expansion

BTW If you buy 6 you effectively get one free thanks to a 16% discount (I can only consider 1 though)



Any thoughts?

http://www.e-quity.com

Buckow is part of Neukoln and this is not the best of area in Berlin. There are lots of skinheads overt there.

I suggest you purchase in Prenzlaurberg, Mitte, Tiergarten or Steglitz-Zehlendorf

Avoid that one, dogbox.

I just talked to a german friend who told me bad things about that area . Like schools closing because teachers were afraid of getting beaten up by students, etc.

I've always been amazed at seeing property in Neukoelln district being sold to UK/Irish buyers. These properties cannot be shifted locally, you won't find any German who knows something about Berlin buying in this area. If you want one area to avoid in Berlin, this is it.

Prop77 / Catara: You mentioned to avoid Buckow. Does that also apply to Haselhorst, Tegel and Wilmersdorf? (I'm guessing it will, but I don't know.)

You will be better off in Morocco !
Stay well clear of this EA.....he doesn't know what he is talking about

Dear All

Some of you know me from this forum already and some maybe not yet. I haven't been checking the forum out in awhile but have come across a few things today which I have read and need to make some comments on.

This concerns the mentioned property: 10-year guaranteed Buckow studios, which you were offered through a UK agent. This agent is acting in our name. We, Stadt Konzept, are actually selling these properties for the government.

A few things need to be cleared here.
1) you are talking in terms of council houses and council tenants. This is NOT true. They are state-owned yes and are now being sold to private investors - German and foreign.

Let me explain something to you so that you may understand things better. Some of you may remember the history of the Wall. Berlin was a divided city, divided by a wall. East and West Berlin.
Up to the year 1990, Berlin had a unique situation through the history of the war.
The city was bombed out in WW II, closed in by a wall during the postwar period and because of that, never had the chance to economically develop “normally”.
Because of the unusual circumstances of the city being divided by a wall there was sparse building land available. For that, there was a high demand for housing space. The Berlin Senate decided to adjust the housing market through a housing law. State-owned building societies were founded and with that the opportunity to finance low-priced rents through subsidised loans. The commitment for the low-priced loans was that the rents were not allowed to be adjusted until the contracts ran out. These contracts ran out between 1990 and and the year 2000. Berlin can only now start to develop “normally”.

When we are talking state-owned property, this is what is meant by that and not in YOUR terms in the UK or Ireland that they are council houses and with that council tenants. THIS IS NOT TRUE. The tenants in these buildings are normal people like you and me. Middle-class tenants with jobs in nearby areas. They are not social welfare tenants being supported by the government on social welfare and through that guaranteeing a 10 year rent from the State. NOT TRUE.
These buildings are still state-owned. Because of Berlin having financial problems, they are now selling a portion of these apartments to help solve some of the financial problems of the city. The state is selling the apartments and offering a 10-year rent guarantee on them as an incentive for first time buyers. As all of you know, the German mentality so far has been to rent out property and not buy it. This rent guarantee is an incentive for Germans to change their mentality and buy property. More and more Germans are actually thinking in those terms these days because the future pensions in Germany are not as secure anymore as people thought. So they are more and more coming to the conclusion that property would be a good source of investment and rental income toward their later pensions. They are not only offering this to Germans but also to foreign investors.

2) Buckow. Yes, it is a part of so-called Neukölln. I can tell that none of you have the slightest idea about Berlin, or you wouldn't be stating things such as: "avoid such areas".
Yes, there are districts in Berlin which one should look into very carefully, because there are areas WITHIN a district that can be negative. But one CANNOT say that an entire district is bad. And this especially applies to Buckow, which belongs to Neukölln. Years back, all districts were separate districts. Charlottenburg, Wilmersdorf, Schoeneberg, Neukoelln, Spandau, Reinickendorf, Tempelhof etc. They were later put together in order to save costs for the State. Now for example, Charlottenburg/Wilmersdorf are one district; Buckow is now considered the district of Neukoelln; Schoeneberg/Tempelhof are now one district; and so on, and so on! Yet, Buckow going by the area, the type of people who live there, etc. have absolutely nothing to do with the Neukoelln you are talking about. Certain areas in Neukoelln are dilapidated, completely run down, very high Turkish population, unemployed, youngsters with nothing better to do than spray graffiti all over the place, vandalize, etc.etc. I believe there are areas like this everywhere in the world. But, you have to know your way around in any city before you can make such comments.

And no. Haselhorst and Tegel are not districts like Neukoelln (your vision of Neukoelln!).

If any of you require true facts on Berlin, please speak to the right people who know what they are talking about. That German friend is most likely not even from Berlin and has just heard in the media about those teachers in the schools scared to get beat up by skinheads. For one they are not skinheads, they are aggressive young kids from not the best of families and two this is the "bad" area of Neukoelln.

Anyway, get in touch if you need CORRECT information

Stadt Konzept Betreuungsgesellschaft mbH, Kurfuerstendamm 216, 10719 Berlin, Germany
Tel: +49-30-81825630
Email: ireland@stadtkonzept-gmbh.de

I lived 2 full years in Berlin and I know quite well what I am talking about.

Catara

you want to tell me you were in Buckow and claim that is a bad area?? Absolutely no way!

I have been in many bad areas in berlin, including Buckow.

My german friend has a sister in Berlin and he reads the news.

Anyway, you are a Real Estate asgent who sells in that area, I am definitely not trying to slow your business.

No, we are not real estate agents. We consult investors on what investments are good here in Berlin. The State is selling their properties and have given us the authorisation to sell them to potential investors for them, as they themselves are now allowed to sell direct. We offer a package: consulting all around property investment before, during and after purchase; out of 80,000 apartments we chose Haselhorst, Tegel, Buckow and Wilmersdorf under investment criteria (excellent public transportation, nearby shopping facilities, industrial areas where there is high employment, fully tenanted buildings, excellent quality buildings and been renovated in 2004 - entire new electrical wiring, new insulated windows, etc); By the way, most of the tenants that live in this property in Buckow are actually flight personnel from different airlines who fly in and out from Schoenefeld airport. Do you really think they'd be living in a bad area? I don't think so!

I live in Berlin and know what is in the news too! As I say, you cannot claim that ONE district is in its whole a bad district. Not in Berlin. If you lived here for 2 years, then you should know that yourself.

Thankyou very much indeed Janet, very informative.

Dont worry about the neg - heads here. Many of them are just life long pessimists who talk themselves out of every opportunity life throws them.

I have not persued this Berlin offer as the yield is a little low and also I like a fair degree of liquidity should I need to sell. If I sold one of these after say 5 years the yield would be even lower for the next investor (assuming the sale price increases) as you are tied - in for 10 years rent.