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Investing Money in Berlin Real Estate

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The (real estate) prices in Berlin are unbeatable: The rise in real estate prices has certainly not left Berlin unaffected. Nevertheless, in contrast to other German cities such as Munich, the capital is still regarded as comparatively cheap. Investing your money in real estate here makes sense for both homebuyers and investors, as the remarkably low interest rates compensate for purchase prices that have risen over the last few years. In addition, the cost of living in Berlin is more than affordable. Not only does the city offer culinary delights from all over the world, you can also eat for just five to ten euros. And if you want to feed your soul instead, the prices for museums, public transport or nightlife are well below the average German city.

Experience history first-hand: Berlin is not only famous far beyond the borders of Germany for its cultural and gastronomic offerings, it also has a lot to offer historically and politically. Checkpoint Charlie, the Eastside Gallery and the Nikolaiviertel are among Germany’s (and the world’s) most important historical cornerstones, while the Reichstag is busy debating the country’s future. If you decide to invest your money in real estate here, you benefit from the exciting medley of yesterday, today, and tomorrow that makes Berlin so unique - and right on your doorstep.

Berlin's rich history and promising future makes it a perfect place to invest in real estate.

Neighbourhood life to suit all tastes: Kreuzberg and Neukölln are among Berlin's hippest districts and offer a wide range of pubs, bars and clubs, while in Charlottenburg or Schöneberg you can stroll through galleries and boutiques in a cultivated and rarefied ambience. Berlin’s districts are (almost) as diverse as their inhabitants. What do you need for your daily life? Would you like to enjoy the pulsating nightlife or do you long for a lot of greenery and peace? Both are possible in Berlin, as our district guide shows.

Buying instead of renting: Berlin's popularity also brings some disadvantages. It is not uncommon for up to 300 interested people to come to apartment viewings. If the crowd is that large, the chances of success are comparatively small. Because the rush to Berlin and its rental apartments is so great, your dream apartment often remains far away, even after countless viewings. Therefore, if you’re planning on settling here for a longer period of time, or you’re looking to invest in a property, it may make more sense to buy rather than rent. As a rule, the investment is likely to be completely paid off after 30-35 years, as this is how many annual rents corresponds to the purchase price of the respective property, according to expert opinion.

With moderate real estate prices and a growing population, your investment will likely grow exponentially over the years.

The agony of choice, Altbau vs. Neubau: Real estate prices in Berlin are still considered moderate by international standards. And the large selection of new and old buildings is also unparalleled. Minimalist building complexes, which were designed by renowned architects and offer modern living comfort, meet charming Belle Époque boulevards, which will inspire you with their richly decorated façades and carefully renovated interiors. These latter properties in particular enjoy huge popularity. High ceilings, beautiful stucco decoration, well-preserved parquet floors, enchanting balconies... The reasons to invest your money in an Altbaus are as many as they are convincing.

Use it yourself or rent it out? If you want to invest your money in property, there are two possibilities: you can use the apartment yourself or you can rent it out. Both have advantages and disadvantages, which depend on your individual needs and financial goals. The purchase of a rented apartment is one of the simpler and more profitable investment options and pays for itself after a short time, as it tends to attract much lower entry prices than unrented apartments. But even private use is now more attractive than ever. While monthly rental payments during a tenancy go up in smoke, when you buy a property, you are investing in your own dream apartment, month after month. Not only that, but an apartment in which you can indulge your inner creative designer and which you can soon call your own.

Buying an already-rented apartment can be a profitable investment.

Tips and tricks for financing real estate: You don't like to talk about money? Well, we do. Before you invest your money in real estate, you should consider both the property prices in Berlin, as well as the various financing options and your own reserves. Our experts will be happy to help you and guide you through the sometimes-confusing jungle of options, terms and stumbling blocks. For investors, the EverEstate Return Calculator is a hugely useful tool. It factors in essential aspects such as maintenance costs or interest rates and provides sound information about the expected return, before you decide on purchasing the property.

Real estate transfer tax, notarisation, renovations... If you want to invest your money in real estate, you should always keep an eye on the possible additional costs. As they usually account for upwards of eight percent of the total purchase price, it is worth relying on expert knowledge and precise advice here as well. What documents are required? What are the stages of a real estate purchase? What time periods are to be expected? If you are investing in real estate and would like to find out in advance about the basic framework conditions, we will be happy to provide you with advice and assistance.

Altbau or Neubau? Kreuzberg or Charlottenburg? Rent out or use yourself? Hopefully after reading this article you may already have some initial answers to these questions. One thing is certain: investing money in real estate pays off - especially in a fascinating city like Berlin.

Written by:

Jason Pocock

Jason is passionate about the real estate market and helping EverEstate disrupt the industry. He loves sharing his views on why buying a property is so important and why Berlin is a great city to call home.

Immowelt-Partner EVERESTATE GmbH

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