How To Buy an Apartment in Berlin the Smart Way
Mortgage Tips
If you would like to buy an apartment in Berlin through making smart decisions, this article will tell you the best way to go about it.
Berlin is one of the most attractive cities in Europe to own your own small part of. As of today, real estate in Berlin is still fairly priced compared to other European cities. The Arts & Culture scene is energetic and dynamic. And international businesses are present and thriving. So it is always a good idea to invest your money to buy real estate in Berlin.
These are the most important takeaways when you want to buy an apartment in Berlin
Berlin is a city of renters & legal protections for existing tenants are strong.
- This plus the low rental returns made it historically more convenient for people to prefer to remain a tenant instead of buying an apartment or flat and become landlords.
- There are many options for financing a real estate purchase.
- Develop a sense of Berlin’s property market and what is reasonable to expect by visiting property for sale.
- If you have your eye set on a specific apartment / flat, obtain documentation from the seller you will need to present to the lender (Bank).
- When you find an apartment for sale in Berlin that you are sure you want, be fast!
Before you buy an apartment in Berlin
Speak with German banks about the different options for obtaining a mortgage when you buy an apartment in Berlin. In some cases, international buyers can finance up to 50 per cent of the entire purchase price through a Mortgage.
When you find an apartment in Berlin that you like, make sure to obtain such documents as the house’s economic planning (Wirtschaftspläne). These should provide details about the building’s expenses, reserves, and how the financial situation has changed over time. You particularly want to know where the house money (Hausgeld) is being spent, as this will tell you what the building’s monthly expenses are.
Your Dream Home in Berlin
When considering apartments for sale in Berlin, the first thought that probably comes to mind is: location, location, location. While that is certainly a very important consideration, it shouldn’t be your only one.
How much space the apartment has, the neighbourhood the building is located in and how much the house’s monthly expenses are. Another important point is: Also any planned renovations to the building should all factor into your decision.
Cast a wide net by visiting apartments that wouldn’t necessarily be your first choice – whether because of neighbourhood or aesthetics to develop a sense of Berlin’s property market and what is reasonable to expect.
Buy An Apartment Or Rent It Out
One relatively new development in Berlin’s real estate market is the passage of the “Mietendeckel” by Berlin’s city government in January 2020. This legislation limits the amount of rent that can be legally charged. For new rental contracts, landlords can only charge the maximum listed in the rent cap table – anywhere from 3.92 EUR per square meter to 9.80 EUR per square meter.
For those looking into Berlin real estate, the Mietendeckel is important because Berlin is historically a city of renters. The legal protections for existing tenants are strong, and rental returns average anywhere from 2.5 to 3.5 %.
For you as a potential buyer, this means deciding early in your search if you want the apartment to live in yourself, or if you are looking to obtain rental income from an apartment with existing tenants. If you buy a tenanted apartment, it could be as long as 10 years before you are able to move into it yourself, depending on several factors.
Get Your Mortgage At Best Rates
If you are like the majority of potential buyers, you will need a Mortgage from a bank to finance your purchase of a Berlin apartment. There are many different banks in Germany, such as the internationally known “Deutsche Bank”, to the lesser known “Berliner Sparkasse” – each with their own mortgage solution for you.
Make sure to do your research – depending on the financial institution, you may be able to finance up to 50 per cent of the flat’s total purchase price through a Mortgage. A mortgage broker can help you navigate the market.
Check The Total Cost of The
Property
Once you have found an apartment for sale in Berlin that you are seriously interested in buying, make sure to obtain information about the building’s finances and annual expenses. These documents can either be obtained with the help of the Real Estate Agent (Immobilienmakler) or the Property Manager (Hausverwaltung).
Again, of particular importance is the house’s economic planning (Wirtschaftspläne), which provides details about the building’s expenses, such as heating, repairs, and seasonal costs.
In Berlin, a portion of every apartment’s monthly rent is allocated as House Money (Hausgeld) that is used to pay for the building’s common expenses. Through reviewing the building’s economic planning, you can see where this money is being spent and whether there are reserves for future maintenance.
Buying Real Estate in Berlin
Is A Matter of Time
And a final thought – when you have decided on an apartment that you truly want, move quickly. Do your due diligence on the building’s expenses, current condition, and be sure to obtain the best possible mortgage. But be quick about deciding whether to pay a reservation fee, which reserves your right to purchase the apartment.
After all, Berlin’s popularity also means increased competition for buying property. Of course that doesn’t go for choosing your mortgage with me, we will take a detailed look at all the options to figure out which option suits you best.
By an apartment in Berlin – Conclusion
Buying an apartment in Berlin can be a complex affair. Having a professional mortgage broker by your side can make the process much easier for you. A mortgage broker’s job is to guide you as the potential buyer through every step in the buying process, and communicate with all involved parties.
Interested in owning your own apartment in Berlin? Learn how much you can afford here, or contact me directly by clicking here.
Happy hunting!