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Guaranteed rental properties in Berlin
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Francophile
Posts: 765 Forumite
Has anyone heard of/dealt with a company called MRI who help you to buy Property for investment. We are going to Berlin next week to have a look at apartments but you have to agree to rent them out for 10 years. Does anyone know if this is a good dealt. No way we can afford to invest in 2nd property in the UK so this seemed like a good alternative.
Member #7 SKI-ers Club
Norn Ireland Club Member 215
Norn Ireland Club Member 215
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Not heard of MRI but have been reading a lot about these types of deals.
It all boils down to that old maxim 'if it looks too good to be true.......'. You will be paying over the odds for the property as they will have factored in their rent guarantee. Also, I believed all the rental yields are quoted gross. By the time you knock off all management fees etc you'll be looking at a much smaller return, and will be paying tax on this (and not all costs will be tax deductible). You could be better off with an ISA etc.
That means you'd be relying on capital gains to make money, so bear in mind what I said about the initial price.
Finally, 10 years is a VERY long time.... who knows what may happen in the menatime, both to your personal circs and the global economy. What cluases are their if you need to sell?Debt 17 12 06 - £7700.:eek: 1st Feb 07 £6903, getting there
1st March 07 £6666 (yikes!) 1st April 07 £6329 17.8% 1st May £6085.48 21%, 1st June £5522.13 28.3%, 1st July £5194.46, 32.54%, 1st Aug £4700, 39%, 1st Sept £4411, 42.7% :j :j:j
Dreaming of Another Country Club Number 12!!!!!0 -
Thanks for that Auntie Brenda. We're already booked to go on Tuesday but we'll use it as a fact finding trip and not sign anything till we've thoroughly checked it out.Member #7 SKI-ers Club
Norn Ireland Club Member 2150 -
auntie_brenda wrote: »That means you'd be relying on capital gains to make money
Hasn't Berlin's housing market been stagnant for at least a decade too? Might wanna do a bit more homework bearing in mind Location is the key to success with this type of venture.
Being stagnant for so long may not be necessarily be a bad thing, as it could change any time, but you may wanna look a bit deeper...;)0 -
MRI have been on one of teh satelite channels - think its overseas property channel. They look quite professional, but that dosent mean a lot!0
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Checked what your responsibilities are as a landlord in Germany?"Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
I am part German and have a rental property in Germany which I inherited.
Its a pain in the proverbial back side......
The law is on the side of the tenant and they can keep back the rent for any little inconvenience. Germans rent for life. My aunt has lived in her property for at least 25 years if not longer. The rent cannot be increased more than the inflation rate the local government will not let you do that. It is very difficult to get someone out, and if they have kids you can forget it. The local council will compare the local rents and take an average, so if the local rents are all low but you need a higher rent, you end up subsidising it out of your own pocket. I have not been able to raise my rent at all for the last 4 years.
If I could sell it I would and buy property over here or use it to bolster my purchasing power to buy my next family property. Since the East joined the West the housing market is on its knees. My property lost its value by 50%. There is hardly a market for estate agents either. My town has about 200,000 population and they only have 2 estate agents. And they are not a German invention either, in my town there were none before 1985.
I am being taxed the maintenance costs etc all means I make no profit at all. It just pays for itself. House price have stagnated and if they are going up then its only in the big Cities like Berlin.
However in Berlin you have to be careful. there are certain parts of the town which you should well stay away. A friend of mine who just moved back from over there could not shift her flat which was a massive flat compared to over here. It had a good central location but people are just not interested in buying where there are so many properties to rent very cheaply. Right now she is subsidising it and has rented it out to the council to have guaranteed payments, who in turn put in some social cases.
A lot of ex-soldiers stationed in Germany buy over there and stay, integrating into the German job market because they cannot afford to buy here. The flats we used to stay in are sold for £20k which is a 3 double bedroom, kitchen, dining room, bathroom and separate toilet with a massive hall. A flat like that in London would cost you £450k at least if not more.
Anyway the market in Germany could be good, however they are not as mobile as the UK population. So do not need as much rental property. They are also not so into owning property like we are here. Plus people build their own individual properties and they then get passed down the line in the families. One needs a t least a 30% deposit to get a mortgage and it is repayment only. Some of the things we enjoy like 100% plus mortgages and interest only do not exist over there, so that could be part of the reason why there is hardly any growth in the property market.
All I can say, go and see, enjoy it for what it is but do not believe the hype. Also have a look at local estate agencies, most will be able to speak English, check out the prices and possible rents. And you better do everything before 12 noon or 1 pm if you go on a weekend. On Sundays you will find all businesses closed. So keep that in mind, not that they wear you down as you cannot get away from them.0 -
Just read a German report on the Spanish housing bubble. Seems it is worse in Spain than it is in the USA. The writer believes there will be a solid crash to come within the next couple of years if not earlier. Too bad its in German otherwise I would have posted it here.0
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Sniped a bit out - to highlight my point, but doesn't all this sound much more sensible than the system we have here? Good tenants' rights, responsible lending & housing at reasonable prices.UK007BullDog wrote: »The law is on the side of the tenant and they can keep back the rent for any little inconvenience. Germans rent for life. My aunt has lived in her property for at least 25 years if not longer. The rent cannot be increased more than the inflation rate the local government will not let you do that. It is very difficult to get someone out, and if they have kids you can forget it. The local council will compare the local rents and take an average, so if the local rents are all low but you need a higher rent, you end up subsidising it out of your own pocket. I have not been able to raise my rent at all for the last 4 years.
My town has about 200,000 population and they only have 2 estate agents. And they are not a German invention either, in my town there were none before 1985.
I am being taxed the maintenance costs etc all means I make no profit at all. It just pays for itself. House price have stagnated and if they are going up then its only in the big Cities like Berlin.
Anyway the market in Germany could be good, however they are not as mobile as the UK population. So do not need as much rental property. They are also not so into owning property like we are here. Plus people build their own individual properties and they then get passed down the line in the families. One needs a t least a 30% deposit to get a mortgage and it is repayment only. Some of the things we enjoy like 100% plus mortgages and interest only do not exist over there, so that could be part of the reason why there is hardly any growth in the property market."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
Guy_Montag wrote: »Sniped a bit out - to highlight my point, but doesn't all this sound much more sensible than the system we have here? Good tenants' rights, responsible lending & housing at reasonable prices.
The problem is that it's socialism and so doomed to fail. If you keep prices low, demand will exceed supply. You end up with a shortage of houses. I think that we will end up with something a bit more like the German system in the end though.0 -
The problem is that it's socialism and so doomed to fail. If you keep prices low, demand will exceed supply. You end up with a shortage of houses. I think that we will end up with something a bit more like the German system in the end though.
Perhaps the state limiting rent increases is a little extreme, I'd just like to see better security of tenure in this country.
I also think the coming storm over housing would be more limited had buyers been required to provide a minimum deposit & maximum income multiples been limited - six time income these days:rolleyes:"Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0
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