In 2008 we will see an increase of so called "privatisations" where international investors who have bought big residential portfolios are selling off individual apartments either as vacant condos for own use or as buy to let investment apartments. Especially the investment apartments were modernised throughout recent years and provide a dependable income source.
In combination with the rental development this will open excellent investment opportunities for private investors in a robust and steadily developing market. The new rent table 2007 ("Mietspiegel 2007") has already shown increases in residential rents.
Property Financing
The financial sector has finally recognised this development and provides financial products to enable international private investors to have their investment apartments in Berlin financed at a level of 65 to 70% of the purchase price. Support for the financing of investment in buy to lease flats is provided by capable agents and vendors.
Management of buy to rent flats
Identified managing agents that are capable to communicate with international investors at the appropriate level of language and professionalism to ensure a smooth start-up after any purchase is a very important part of setting up a successful investment. Adequate support for the international investor is key for an investment decision.
Conclusions
The economic situation in Germany is positive with the prospect of a longer period of prosperity. The Berlin property market has three main value drivers:
- 1. Stable population development accompanied by new jobs.
- 2. Long term commitment to the location by the government and international business.
- 3. Still low prices compared to other European capitals with yields that allow a positive cash flow after financing.