Buying property in Germany’s capital is not a complex as you might think, but you need to implement a few tactics to get the job done properly. According to Der Spiegel, the German real estate market has soared in the last two years, as investors look for solid returns and safe heavens in the midst of an uncertain global economy.
And what better place to buy property than Berlin, the bustling and vibrant metropolis!
Here are our top five tips you should follow to live or invest in the city.
1. Do your homework.
Do your homework beforehand, so you save you enough time ultimately down the road. Know the neighborhood you want to invest in, why that particular location, and your minimum expectations. Barnstorm as many real estate websites as possible. If convenient, ask relatives or friends living or having lived in Germany. The more you know about Berlin – and the country — the better.
2. Enlist professional help.
After doing your homework, it is time to start doing things. Contact a reputable real estate agency in Berlin. Given the high demand in the city, there are several agencies. Narrow the list to those catering to your particular needs. For example, if you are a U.A.E. investor, contact an agency whose team is fluent in Arabic and cognizant of the subtleties of the German property market and the cultural arcana of the Arab world.
3. Prepare yourself financially.
Property investment, as any type of investment, requires short-term funding and long-term benefit expectation. Berlin is not an expensive area as downtown London is. However, depending on the property you want, you may need to spend some good cash. Do your financial math and determine how much you are willing to deposit. Remember that mortgage institutions in Germany are willing to finance up to 70% of the property value. With that in mind, make sure you also have a clean credit record, as that will be a critical factor during the application review process.
4. Get your investment strategy ready.
It is essential that you know your investment strategy. Are you purchasing the property for residential or investment purposes? Are you looking for a long-term investment with high value increase (like in Berlin) and with low yield — or high yield but with lower inverse in the property value, which is suitable for investors who are looking for fast cash? Or maybe you first want to use the asset as an investment property, and then convert it into a residential unit once you are ready to relocate to Germany. Understand your needs and factor them into your overall strategy. Being clear upfront about your expectations will make the realtor’s job easy.
5. Follow up on your strategy.
If you successfully close your first deal, and if you have the wherewithal, you can embark on a second property – and a third. The idea is to grab attractively priced units, hold them for a while, and sell them in, say, five or seven years. In a city as politically stable and economically booming as Berlin, opportunities abound and strategic investors can always find high-yield, interesting properties.
Experts recommend that investors interested in the Berlin property market do specific things in order to succeed. These include self-preparation, hiring reputable and competent professionals, and personal financial assessment. Investors must also engineer a proper investment strategy and follow up on that strategy in the short and long terms.