Investing in Berlin
Ever wonder why you are hearing so much of Berlin recently? Why there is a sudden rush for investors to investigate the place which maybe before had always been overlooked?
It is because Berlin is the new gold mine in terms of real estate investment. Berlin properties are very much affordable compared to Budapest, Prague and Warsaw. As a matter of fact, a lot of Berlin property for sale is considered to be the least expensive in the entire continent of Europe. How affordable you ask? There are properties that will only cost you as little as 1,000 Euros per square meter. Compare that to London and Paris that have more than 6,000 Euros per square meter.
Berlin is a place that you can enjoy for a week of vacation and it is also a place you eventually see yourself living. The influx of tourists has been an astounding 16% increase in 2007. The flights are now competitive enough that anyone who wishes to visit Berlin can now do so. The city increases in popularity among travelers since the Berlin wall has been torn down. Now, Berlin is the hip place to visit with its world class hotels and interesting nightlife. Plus the presence of the country’s finest beer does not hurt as well.
The low cost of Berlin flats and Berlin houses is complimented by the high investment returns of the area. The reported ROI for properties in Berlin are higher than that in the United Kingdom. For example you invested in a block of apartment. You can earn 4 percent to 10 percent from the original value of the property with only 4 to 5 percent mortgage rate to worry about.
Speaking of mortgages, Berlin has lower rates than the United Kingdom as well. They can have as low as only 4 percent fixed mortgage rate over a number of years. The banks are typically welcoming when it comes to new investments. Bank financing is easy to obtain and they are willing to lend 50 percent up to 60 percent of the valuation of the property. High return and investment and low interest rates, the combination of both makes the real estate market in Berlin as one of the most attractive in the world.
When Investing in property, in the back of one’s mind is the worry of finding a tenant for your property. This will not be a problem in Berlin. Apartments in Berlin are typically rented by families and over many years. Expect long term residential tenants in Berlin if you wish, or decide to let out short term to professionals (and achieve a strong ROI). Sometimes, even the children of the tenants continue to live in the houses or apartments. You will not have a problem making the tenants stay in your property, the problem is when you want them to leave. However, this translates to a very reliable rental return for the investor in the long run.
The economy of Germany as a whole will back you up concerning your Berlin property investment. German economy is now one of the most stable in the world. It is the fifth largest economy worldwide and they produce the highest gross domestic output within the EU. If you want a sound, reliable and profitable investment, it is time to turn your focus in Berlin.