Overseas investors not familiar with Berlin property markets would find it hard to contact a seller directly. The system here is that sellers work with brokers, usually putting the property on sale through several brokers who may then have sub brokers working to find buyers. In a seller’s market there is little room for negotiation of price or brokerage commission.
There are Berlin apartments for sale and investors can get in touch with local realtors who would then show them what they have in their inventory or contact other brokers if they feel so inclined. However, this is jumping the gun. Before that the investor must develop a suitable strategy keeping in mind factors such as taxation and location advantages that directly affect present investment, future prices (and, therefore, returns) and market trends. A broker who simply assists in buying and selling is not of much use. A specialist realtor will provide such a strategy based on research that evaluates trends past and present as a pointer to future price movements while keeping sight of tax laws. Comprehensive services would include:
Advice on locations and prices prevailing in each location:
Mitte and Charlottenburg-Wilmersdorf areas command prices in the 3500 Euros range whereas properties in Lictenberg, Marzahn Hellersdorf and Spandau fetch around 1500 to 2000 euro’s. Luxury apartments in select, old areas or penthouses can go as high as Euro 5500 per square meter. At the other end, there are apartments that sell for around Euro 1000 per square meter but these are in peripheral locations.
An investor can opt for a high priced apartment in Berlin by putting down about 20 to 30 per cent cash while the realtor arranges equity from other partners or from a local bank. Investors spread risk, optimize cash flows and can look for a good return on investment in the form of rentals by selecting prime properties in up market locations. Leveraging gives investors the chance to buy an entire block rather than selected flats in an apartment block and thus have full control.
Forming a buying vehicle:
An expert realtor will assist the investor by forming a buying entity for a single property to take advantage of tax laws while taking care of legal due diligence.
Investors would do well to have a realtor who is not just a broker interested in making a sale. Asset management comes in useful. The realtor assists in documentation and registration. This is followed by handling renovations if required. Then the Berlin realtor assists in rentals and leases that assure a steady return that takes care of mortgage payments.
Buying property is more than just investing in a flat with the purpose to sell. Without expert advice from a realtor, an investor would not receive adequate returns.