Berlin is one of the most attractive destinations for property investment however there are few hurdles that can put off certain group of investors. Many of the foreign investors are not fully aware about various factors to be taken into account while investing in property in this country. Therefore, in this post we are going to cover few mistakes that many of the foreign investors often end up doing while dealing with any property purchase.
Table of Contents
1.Fail to understand notary and counselling cost
Most of the foreign buyers who are interested to buy a property in Berlin are not well conversant with German language and therefore they fail to get right information at right time to take best decision. Most of the property owner or manager is not too willing to speak English either. Therefore, you will need an interpreter that may be too expensive.
2.Misunderstanding of sales contract
Most of the foreigners fail to understand correctly various terms and conditions of the contract and in some contract the power mostly remains in the hands of property manager or Berlin real estate agents who will decide the rent of the property. This can lead to loss in yield from the property.
3.Underestimating renovation works
Few Berlin apartments for sale may need plenty of renovation work where there can be few serious issues like plumber work or replacement of any floor etc. Sooner or later these problems show up and you end up paying for them unnecessarily.
4.Not taking technical expert’s view
In Germany it is not compulsory to seek expert’s appraisal before signing any sales deed. Some may go for it but many prefer to avoid it in order to save few euros. However, knowing the technical faults in the property beforehand gives you a point to negotiate for better price.
5.Taking too fast decision
Often you need to take fast decision in order to cash in the opportunity coming to your hand as this is very competitive market. However, some time you also need to take little time in order to qualify your decision. Not taking timely decision can cause certain mistakes and also waiting too long can cost you much more than what you budgeted earlier.
6.Forgetting few laws of tenancy in Germany
Remember in Germany many people are not landlords. Most of the Germans avoid putting their money on real estate investment. Due to this reason the legal position of tenants is much favourable for them, who enjoy better protection in Germany.
Therefore, in case you buy any rented property then you cannot get rid of the old tenant and neither can you terminate the old contract. This also means that you cannot raise the rent for many years. That is the reason many property owners sell their property at lower price than market rate where there are tenants.
Therefore, it is more sensible to buy any newly built property where there are no tenants and you can get new tenant with whom you can make fresh contract. You can easily mortgage in Berlin about 50 to 60 per cent of value too.