5 steps to buying an apartment in Berlin

5 steps to buying an apartment in Berlin

Berlin is currently the best tip for international real estate investment, thanks to a stable property market and a huge boom in the business world, which has drawn in young professionals. The best thing is that despite relatively low property prices, many Berliners are opting to rent rather than buy so you have millions of potential tenants.

You can expect a rental return on a property in Berlin of between 2.5% and 5% per year, so if you are looking to get a slice of the German rising real estate market, here are the five steps you need to take.

Choosing an area

First, you need to look into which area of the city you’d like to buy in. The Moabit and Wedding neighbourhoods are up and coming, so they have lower average property prices but this won’t last forever. On the other hand, areas like Prenzlauer Berg, Kreuzberg and Neukölln are very much in demand for their central location, established cultural life and beautiful city landscapes.

Searching for a property

When looking for a property in Berlin, you’ll want to find an estate agent who can help guide you through the complex German legal and taxation systems. Even if you’re fluent in German (but especially if you’re not), it’s incredibly hard and time-consuming to navigate them solo.

A skilled estate agency, like https://www.firstcitiz.com/, can help you find an apartment in Berlin, arrange financing through their network of mortgage brokers, and arrange all the legal documentation on your behalf. For buy -to-let investment they can manage the property for you, so that you can reap the rewards without lifting a finger.

Learning about Legal and Tax implications

As mentioned above the German legal system can be complex but it works to the advantage of many buyers, like the Real Estate and Developers law which allows you to pay in instalments for properties under construction so that you are not paying in full until the property is complete. Other purchase-related and tax deductibles elements are to consider. For example, the holding period of a property bought for self-use or investment, the mortgage repayment and others are some import criteria for a good resale timing.

Financing a purchase

When buying a property in Berlin you may be able to obtain a mortgage of up to 50% of the price of the property from a German bank (or arrange one in your home country). Your personal savings and capital should cover the rest of the property price and transactional and legal costs, such as notaries, land registry and eventually tax consultant and lawyer. Your local real estate agent will guide you through all the process and will assist you in getting a local mortgage.

Buying an apartment

Once you have made it this far, it’s time to put in an offer and arrange a survey on the property.

Here are some of the main documents that will be handled for you during your property purchase by a real estate agent:

  • Budget (Wirtschaftsplän): This is what all apartment owners in the building have decided are the expenses needed for the building’s upkeep, like cleaning common areas and maintaining the building structure. Hausgeld is the monthly expenses that owners have to pay and Rücklage is the reserve of money currently in the budget.
  • Declaration of division (Teilungserklärung): This will lay out which part of the building is your property and which is considered common space (stairs, trash room, garden).
  • Energy consumption assessment (Energieausweis): This will tell you the energy efficiency coefficient of the building which is provided by the house management service. Note that the use of common heating system is usual in Berlin, which makes the heating expenditures cost-effective.
  • Ground view (Grundriss): This is the basic layout of the property.

Those are the five steps to buying a property in Berlin. Have you recently bought property in Berlin? What did you think of these steps? Let us know in the comments.