Real Estate Investment Model

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Investment in 3 Phases

Purchase

The total investment amount consists of the purchase price and relevant closing costs.

Growth

Over the lifetime of the investment, its value appreciates.

Sale

When the investment is sold after 10 years, no tax is owed on the capital gains.

Purchase Process

1

Reservation

If you need some time to think about your offer, to further advice, or to seek financing approval, the property you are interested in can be reserved, free of charge, for up to three weeks.

2

General Power of Attorney

If necessary, the help of an independent solicitor can be sought. By signing a Power of Attorney authorisation (POA) relating to the property, the solicitor can act as your representative in all legal matters and as authorised recipient. After this, the purchasing process can begin.

3

Financing

International investors can finance up to approximately 70% of the total investment through a German lender. If in need of credit, financing conditions can be negotiated with your favoured finance provider, and repayment schedules arranged.

4

Draft Contract

A draft contract will be drawn up and provided for your approval. This will include our expert risk assessment (Due Diligence). In accordance with German law, after the fifteenth day of receipt, the contract can be signed.

5

Notarization

The purchase contract must be certified by a notary. The buyer (or buyer’s representative), and seller sign the contract in the presence of the notary to officiate the sale.

6

Purchase

When purchasing a property in Germany, the buyer bears the transaction costs. These costs include the property transfer tax (6 % of the purchase price in Berlin), the notary costs around 1 to 1.5 %), registry charges for property (approx. 0.5 % of the purchase price) and the applicable estate agent’s commission. Purchasing certain rented units on this platform will incur no estate agent commission. To verify which apartments this applies to, see the information on the page relating to each apartment.

7

Services

To ensure a hassle-free investment period, administrative services can be provided by our partner agencies. A property management team or letting service will act as the link between tenant and owner, and ensure the smooth running of the property.

8

Handover

Once financing is approved and purchase completed, the final handover takes place. Congratulations on acquiring your own piece of Berlin!

Required Documents

icons/checkboxSelf-disclosure form
icons/checkboxCopy of passport
icons/checkboxMonthly payslips/proof of income
icons/checkboxEmployer verification
icons/checkboxRecent tax returns
icons/checkboxBank account showing liquid assets
icons/checkboxInformation on owned property
icons/checkboxProof of liabilities and other monthly debts

Relevant Rental Laws

Tenant Rights

In Berlin, a landlord can only serve tenants notice that the owner will be moving into the apartment 10 years after the purchase, if the current tenants were occupying the apartment before the ‘Teilungserklärung’ (declaration of division) came into effect. If the current tenants moved in after the ‘Teilungserklärung’ came into effect, they can be served notice in under ten years. Only unrented flats can, with certainty, be moved into at will.

Rent Ceiling

A rental ceiling was introduced in Germany in 2015. This means that rents cannot exceed 10% of the local average rent for a current or new tenant, according to the Mietspiegel (rent index). Additionally, rents can only be raised by a cumulative 15% every three years, or 4.77% annually. The legislation can be bypassed through renovation or furnishing of the flat.

Milieuschutz (Social Preservation Statutes)

This federal construction law allows municipalities to issue social preservation statutes to spare them from negative consequences of urban development, if a certain area’s population structure changes significantly. The law is aimed at dampening rents to protect the population structure in a certain area by mandating approvals for several modernizations and other changes to property.

Umwandlungsverbotsverordnung

The state of Berlin has issued a directive prohibiting the private purchase of entire apartment buildings and converting them into single units within the boundaries of social preservation areas. Together with the Government Neighbourhood Protection, the two directives have already shortened supply on the property market in Berlin and led to a price increase for property in the respective areas.
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