Hi
I am based in Adelaide and was born in Germany. I have just recently bought an appartment building in Germany with 5 units for euro 85,000 which returns approx 20% net return. I was able to source 75% finance. I am looking to find likeminded investors who would be willing to join in on other deals.
Regards
Rob
Hi Rob. I’ve been looking at German apartment buildings but haven’t seen 20% net. I’d want to go somewhere population is rising. Not sure how to avoid currency risk contagion from the rest of Europe?
Regards
David
Hi David
Germany's population is dropping by 0.2% pa. Unfortunately this is the grim reality with an aging population. Re apartment buildings you can have a look at places like Wuppertal, which has had a decline in population due to mining and heavy industry ceasing their operations in that area. There is signs that these areas are changing their face towards more high tech products and services as a shift away from manufacturing (they leave this up to China) Overall the area has approx 10 million people so even with a current drop and possibly continuing over the next decade there is sufficient population providing you are buying properties that are well maintained. Most properties I look at are fully tenanted, kept up to date with maintenance and the agent's are generally happy to let us have look at 12 month worth of bank slips to back up that all rents are flowing as advertised.
On the other hand if you are looking for areas where population is steady you may want to check smaller to medium cities with under 50000 population. These also have generally higher returns
Let me know if you need more info and may want to check this out a bit closer
Kind regards
Rob
Rob
20% net is a great yield. Well done in finding that, especially with 75% financing.
I have seen 8% yield in Berlin, 10% net near Leipzig CBD, 15% net where there are vacant units or some renovations required. Where I’ve looked yields are higher the deposit/cash down is higher for a loan.
In what way would you like investors to join in?
Regards
David
Hi David,
the higher LVR maybe due to my background and up to negotiations with the individual bank manager. Owning several properties in Australia I was surprised at how easy it was to get my finance approved with only Australian income at the present moment. I could see two ways of collaboration in form of a contractual joint venture (providing our investment goals are similar) or at offering my knowledge of the process in dealing within the German property market, a network of reliable people over there and ongoing support to overcome the cultural and language barriers for an agreed fee.
Looking forward to learning more about your current investment profile and strategy.Kind regards
Robert Omahen
WOuld it be possible for the non German background foreigner to own land in their own name and to get finance there?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw
Yes a foreigner can own German property and finance appears to be much easier to get than in the US. Most people in Germany can speak some English and if they find out you are from Australia that can help the conversation!
David
Thanks. Sounds very promising then. I have a good friend in Regensberg.
What is the capital gains over there like in general?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
small world I have studied in Regensburg. Does your friend work for Siemens? Re capital gains according to some media sources the market is approx 25 % under valued providing they get through this current patchy situation
Hi David
have you done some research previously? What are your findings about German realestate?
Kind regards
Rob
Rob
Advantages of German real estate
– EU lending available at low rate high LTR reduces currency risk
– high net yields in regional cities. Tenant pays many operating costs
– can buy an apartment building for the same cost as a one bedroom unit in Australia. Prices are low but have shown growth in recent years.
– low turnover in tenants
– Germany is the strongest European economy
– steady growth from a low base
– professional property managers available
– can buy with low depositDisadvantages
– falling population reduces demand so choose location carefully follow employment growth
– laws favour tenant in a dispute relative to Australia or US. Some caps on rent growth. (Can also be a growth opportunity if rents have not been managed for maximum.)
– potential for language issues if a technical dispute arises
– income taxes similar to other countries but need advice
– currency unknowns (could say the same for $A or $US)Just my opinion on what I’ve read!
Cheers
David
Hi Rob,
I may interested
i have several properties on the market and am looking for high yield opportunities.
I would need low doc finance as I took some losses over the last couple of years
I would greatly appreciate further info and may be looking to do something jointly or just pay for your services
Regards
JohnFascinating read, guys, thanks.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Hi John
the loan in Germany shouldn't be an issue. Can you provide regular income evidence, e.g. payslips and an account statement with enough clear funds to pay for the deposit in Germany? Your average deal of lets say purchase price of Euro 150,000 can be purchased with a deposit of approx AUD 60,000. The net income (after council rates, services, building insurance but before management cost for an agent, repayments and rent default insurance) I would be trying to achieve is around AUD 30,000 which leaves enough after paying for your principal and interest in Germany, the property manager of lets say 10% management fee of the net income and rent default insurance of approx AUD 500 per annum to bring back and repay the deposit quickly, enhance your investment through rennovations or invest in further properties in Germany. You can ring me on 0438 818 590 and we can discuss this further if you like.
Kind regards
Rob
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