Investors offered a piece of Berlin buy-to-let sector complete with tenants
Investors offered a piece of Berlin buy-to-let sector complete with tenants
British and Irish property investors are being presented a "curious" opportunity by the German authorities. The Telegraph reports on the decision by the government of Berlin to offer interested buyers the chance to purchase property from its housing associations on a
buy-to-let basis.
Potential investors are being lured with the prospect of buying into the heart of
Germany, where a culture of
renting pervades, and having a steady source of income from tenants vetted by the authorities. The paper claims that
nationally 80 per cent of Germans live in rented accommodation, a figure which jumps to 88 per cent in the
capital.
This chance to invest in the
Berlin buy-to-let sector was not initially targeted at overseas investors, as Silke Lorenz of Das Stadt Konzept, the
agency behind the sell-off, explains: "All of these Berlin apartments were offered first for sale to the tenants.
But only around 20 per cent said yes. So at the end of last year we opened up the offer to the British and the Irish
because of their track record of investing abroad."
She went on to reassure any landlords-to-be that they "will never have trouble finding tenants," as
Germans typically want "a low-maintenance apartment at a reasonable rent," a demand that, according to Lorenz, the current housing association
accommodation fulfils. Nevertheless, Das Stadt Konzept is also offering buyers the opportunity of a rent guarantee,
for a one-off payment of approximately €1000 (£785).
Lorenz emphasised: "When you buy, you get a sitting tenant and Germans move very infrequently. They have to give
three months' notice, which gives you ample time to find a new tenant." She also highlighted the fact that the
housing association will pursue any legal problems that may arise with tenants, a service that is covered in the
administration fee.
The scheme is focussing its efforts on the area of Marzahn, in the east of Berlin, where studio apartments are
available for about £25,000 and three-bedroom apartments are for sale for about £56,000. On a buy-to-let basis, it estimated that these
examples will generate a yield, before tax, of 4.8 per cent and 5.35 per cent respectively. Investors are, however,
not restricted to buy-to-let; once the present tenants' contract expire, owners will have the option of keeping
the property for their own use.
According to the paper, German estate agents currently anticipate between three and six per cent appreciation in
property value per year. The country also boasts the "lowest prices in western
Europe", the paper states.
This story was brought to you by holiday
lettings.co.uk, the UK's No.1 holiday home website.
16 May 2008
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