Good time to Invest in German Rental Market?

Fondu

The germans dont seem to like buying houses with only 60% renting for most of their lives.Houses there are cheap and i was wondering what are your thoughts on the german market..From what iv heard,house prices are going to remain stagnant but if your intention is to let it,what would ye think.
Houses like these that would yield 2knet a year isnt bad.
http://www.daft.ie/searchinternational_sale.daft?id=819044

http://www.daft.ie/searchinternational_sale.daft?id=819031

who_ru

when you look at those prices for Apts in a major European capital with superb public transport systems, unrivaled night life, and great quality of life it makes one even more depressed living in over priced ireland & the gash that went up over the last 10yrs under the name of 'apt living'.

afraid i can't advise you OP but i'd sure like to know how you get on. best tip would be to mosey on over there for a week or so, talk to all the EA's, whether you believe them or not is up to you, and get a sense of the area.

Fondu

Thanks,does anyone know anything about the german market?any input?

KindOfIrish

Fondu wrote: »

Thanks,does anyone know anything about the german market?any input?

One thing I know for sure. In Germany a tenant has more rights for your property than yourself. It is almost impossible to evict a tenant. I know cases when a landlord had to bribe tenants in order to move them out.

DubDani

Being a Landlord in germany is a minefield.

- rents are reasonably low compared to buying in most german areas

- you can't charge whatever you want, you have to adhere to a local rent table

- rent increases can only be a certain % every few years

- In Germany rent is calculated on 2 parts, basic rent and costs, which includes Insurances, Litter, heating, local charges etc... you have to provide the tenant with a detailed calculation every year (incl. receipts) and refund if he overpayed over the year. If it is an apartment complex, then the Mgmt. company will do this for you, but you will have to pay for it (not chargeable to tenant)

- In Germany there are hardly any fixed term leases. The notice for either side will at least be 3 months, and going up to 1 year (if tenancy is 10 years or older)

- It's virtually impossible to evict someone in germany if he pays his rent (except if you intend to move in yourself).

- if someone doesn't pay his rent it will take you at least 9 months and several thousend euro (beside the missing rent) to get the tenant out. You will have to go through the courts, and don't even think about changing the locks, as it is a sure way to get arrested (the germans know no fun in these kind of tenant/LL matters, and the tenant has every right until the baliff kicks him officially out).

- A tenant in germany is legally the "owner" of the property, and can do more or les whatever he wants to do with it (i.e. painting, putting down new flooring, even taking out (non-load bearing) walls, as long as he returns the place in the same order he received it, whenever he moves out.

- No regular inspections allowed, the tenant has a complete right of privacy until he moves out...

Still wanna be a LL in Germany?

Cheers,
DubDani

P.S. I own and rent a property in germany, and there wouldn't be any value in it, if I wouldn't own it outright.

Fondu

If it is all this bad,do you mind me asking why you dont try and get out yourself

tommylimerick

i also have been looking at this
i see that the returns are about 7-8%
which is very high
but the guide price does not include fees
which they reckon are about 7%
looks like great value but the rules are a lot
different than ours

magneticimpulse

These do not look like a good investment.

1st you dont know what the area is like. It could be a council flat area, drugs/crime etc.

2nd the condominium is only "77m2". I am currently living in a studio. Yes a studio!! Which is my bedroom, kitchenette and bathroom and that is 30m2. Based on the size of my "student studio", I can tell you 77m2 is on the small side compared to Irish standards of space.

Unless its right next to a university, its not going to be a huge investment.

Also the euro zone at the moment is not certain. Germany's economy was doing very poorly up until 2 years ago. Their car industry was flagging behind...it has now stabled off.

Are you fluent in German? Would you be able to understand all the paper work and guidelines? Currently living in France and there is alot of paper work and rules just to rent. There are agreements with the bank over certain insurance which you take out while renting. The paper work goes back and forward and its all in French.

I have heard from a friend who lived in Germany, that it is similar issue there. You would have to open a German bank account. Their banks are not so open to loans like Ireland is. If you go 1 euro over drawn, they can charge 15 euro fine for each transaction you make while in over drawn. There are also monthly bank fee's which you have to pay.

Not to mention Council tax. I am not sure if Germany has the same rules as France. But I know here if you have property in France and elsewhere in Europe, you can be double taxed...taxed on the property and taxed on all income you make. Since ive never lived in Germany, i do not know if that rule applies. However since there is not a mad rush or knowledge for people to invest in Germany...i suspect there is a very good reason why this has not happened, compared to the likes of Spain or Portugal.

I think if Germany was the place to invest lots more people would have done it. I know France is very expensive in the cities, tax is expensive, general hassle of banks etc puts people off. Its taken me 4 years to master all the paper work.

DubDani

Fondu wrote: »

If it is all this bad,do you mind me asking why you dont try and get out yourself

I am german, and it's close to my family. In a way it's my "life insurance" if life in Ireland ever goes the wrong way. It also comes with a big piece of land, and I am planning on dividing the site and building a house for myself on some of the land.

In addition to that the first one is only a 1BR apartment (2 Zimmer in germany means 1BR + 1 LR). Monthly rent is only 300 a month.Annual Service Charges are 146 Euro. Add to that the 7% buyers commission and the property tax, and it doesn't look like such a good proposition anymore. And if the Apartment would be any decent (ie. locationwise), then some german person would have bought it already, as 50K is not a huge amount of money for a lot of them, and there is a lot of German Interest in properties in Berlin. Loads of Irish people got stung heavily buying properties in the east of germany, and are trying to offload them now for 10-15K.

tommylimerick

thanks
ye have put me right off it
oh well back to the drawin board