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Best area for buy-to-let ?

Scotland
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Best area for buy-to-let ?

I missed the boat in the property ladder and need to do some serious catching up. Loved Germany when I've visited there and think I want to 'risk' buying a 2 bed apartment in Berlin to rent out. Any suggestions please as to the best areas ? Any ideas would be greatly appreciated - Danke..Dan

Germany
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1. Re: Best area for buy-to-let ?

Here a map showing which living areas are good (reed), medium (orange) and basic (yellow). White areas are either with buildings not for living or areas which are not built up.

…berlin.de/wohnen/mietspiegel/de/download/Wo…

Scotland
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2. Re: Best area for buy-to-let ?

That's really helpful. Looking at the map, Charlottenburg looks good. Found a small (35 sqm) apartment with garage in Charlottenburg - Westend for 60,000 euros... safe bet ?

Germany
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3. Re: Best area for buy-to-let ?

That's already the upper range for this size of an apartment. I would of course not spent the money without having seen the apartment before.

- if the location is really OK (e.g. at a busy street)

- if the place is new or at least recently renovated. Not that you have to spent extra money to fix a lot.

Here a site where you can see other offers to get an idea

immobilienscout24.de/Suche/S-14/Wohnung-Kauf…

Scotland
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4. Re: Best area for buy-to-let ?

Checked out website and I'm dizzy ! It's a great website and has a great range of apartments. I would visit any potential investments. Wondering if you feel people put size of apartment over location - is most desirable location near castle, Spree or a park ? If I can narrow area before coming over as didn't realise how many apartments for sale.

Berlin, Germany
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5. Re: Best area for buy-to-let ?

Westend (Charlottenburg) in generell is a very good area but you should be beware that some people tell the flat or house is in Westend but might be on the edge of it.

As mentioned before you SHOULD have a look at the flat and the area before buying. Even in a "good" area you'll find some streets which are not that great. Not dangerous but you might wont get the money out of the flat you think you would. If you a right in the middle of Westend you'll find really nice houses, villas and luxury apartments but on the edge you will also find more working class areas.

You should also know that rents are still fairly low in Berlin compared to other capital cities, even in good or very good areas. For example I live on the edge of Westend in a good area but on a busy street (during rush hour). We have got a 2 bedroom flat in a house build 1930 meaning slightly higher ceilings and wooden floors and pay 550 Euros per month incl bills. If a similiar flat in our block is rented out the rent is now about 100 Euros more (we moved in over 4 years ago). So don't expect to get as much rent as you would in the UK for a similar place. You should also not forget that you have also certain responsibilities as a landlord.

berlin
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6. Re: Best area for buy-to-let ?

Personally:

- Location is highly important in Berlin; The problem with real-estate investment is that you have to think of things that others might not consider. Westend for example is a nice neighbourhood, but right now not highly fashionable, and although upscale already, there is IMHO (and I should say I am not a real-estate assessor) little chance that the value of the flat would raise or that you can rent it successfully as a holiday flat

- The condition of the flat is also important and I think you will have to check yourself and/or send a professional to do the work for you: e.g. what kind of heating; is there renovation of the building on the agenda; would you have to share the costs in that case; s it a listed building and you can't make any serious amendments? Is there a lift, if the flat is on a high floor?

I would think that best areas to rent are:

- Mitte (but Mitte proper, not Tiergarten/Moabit or Wedding)

- Prenzlauer Berg "inside the ring"

- Schoeneberg (almost all areas)

- Charlottenburg near the university, near the palace

- Some limited areas in Friedrichshain and Kreuzberg

Barcelona, Spain
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7. Re: Best area for buy-to-let ?

The Mietspiegel map seems to reflect the situation several years ago before the massive renovation of buildings in Mitte and Prenzlauer Berg, so most of northern Mitte is still defined as "einfach" which is presumably why Dan has homed in on Charlottenburg after looking at that map, given that most of Charlottenburg is "good". If you read the definition of "einfach" (basic areas, it bears little relation to most of Mitte as it is now. And I do mean real "Mitte" ie below Bernauer Strasse, including very popular Arkonaplatz/Zionskirchplatz area. Certainly rental income there can be at 7€ per square metre and most flats selling at 2000€ per sq. metre. That area and adjacent Prenzlauer Berg is very popular with young people (students and young professionals)

Dan, you do realise that renting is the norm in Germany so a buy-to-let there is not like a buy-to-let in UK where your tenant is in for 6-month contracts? You have to assume your tenant will be there for years (can be good or bad point) and paying the same rent for years as only the portion covering running costs goes up, there's no cost-of-inflation price-rise in rent.

You can sell on with a sitting tenant too of course (or buy with one; there's a whole section in these property pages for properties as an investment).

Also, Berlin is particularly cheap but property in Germany is much cheaper than UK or Spain and it's unlikely it'll go up the same way it has in those countries so don't expect massive gains either(indeed prices had dropped, though now bottomed out in Berlin). From the perspective of Barcelona (or much of Britain) looking at property ads in Germany in general can make you green with envy (look what you get for your money!)

Apartments are defined by number of rooms so a 2-room flat is a one-bedroom flat (with kitchen and bathroom as well as living room of course!).

And by the way 35 sq metres is pretty small (definitely for one person). If that had a proper bedroom as well as living room it'd feel incredibly cramped.

Scotland
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8. Re: Best area for buy-to-let ?

Thanks Lynda for your message. I'm not kidding myself Germany has UKs boom or bust attitude to property. For 50K, I couldn't get a bus shelter.

I've chose Berlin right or wrong for general stability. For 50k I may get a 2 bed apartment in a city that seems to have pretty firm foundations. People have said invest in Eygpt or Morocco for capital appreciation but would you risk putting all your savings there ?

I've never lived in Germany, but I generally liked the german people when I have visited. I think they have their head screwed on and although I hope there will be capital appreciation over time, I want to rent for years and not make a quick profit.

However I haven't a clue which specific area with all the help you have all given. I will look deeper and will spend time to visit and view hopefully within a couple of months. Am I best getting a german mortgage ? Thanks again.......Dan

Colorado
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9. Re: Best area for buy-to-let ?

I've been thinking of doing the same thing, but buying a flat that I'd rent out very short-term to tourists and other visitors. I've used a couple of the short-term vacation rental services in Berlin on visits myself and found it's a very well-developed system. But I haven't done the research yet on what percentage these services charge for promoting and/or managing your property, so I'm still not certain on the cash flow potential. I'm doubting I'd make much money in the short-term, but my hope is that in 5-10 years I'd own something worth more than I paid for it and it cash-flow throughout will have been net positive, even if small. Given a desire to reach short-term folks, it seems Mitte might be idea for location. But I've been told that parts of Charlottenburg are up-and-coming and are being rediscovered by artists, now that the best spots in Mitte and Prenzlauer Berg have all increased in value.

Scotland
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10. Re: Best area for buy-to-let ?

I went to the 'Place in the Sun' exhibition last week in London so I'm getting serious. Out of the 400 or so different stalls wanting you to invest in their country, only one was German ! They wanted a lot more than I've seen on websites.

I feel I have to go over and get a feel for the different areas within Berlin. I went on Google Earth and looking at the surroundings, Mitte does look favourable but is the area better near the river or a particular building ?

This forum has been great and the people who have given their advice freely have been really kind - so ask away !