West Germany property

[Rentalprofit]

Hello,

I am private investor interested in possibly investing money into German property for rental return + capitalization and looking for some advice here.

As of now, my primary interest is investment in supermarkets located in West Germany, preferably nearby city with 200K+ population. I have up to 800K EUR investment on my own and can apply for mortgage.

Here is the list of my goals:

1) Protect money from inflation\loss
2) Generate passive return of 7%+ annually
3) Possible capitalization

I have done some initial research, but didn't find enough information on the topic. So here are some of my questions:

1) Is Germany a good place to invest according to my goals?
2) What is a better long term choice - commercial property(supermarkets) or apartments?
3) Who are the best agents there with access to first hand commercial property.
(I was able to find only one that seemed OK website nw-estatecom But I am not sure they are any good)
4) Should I look into different region or country like South America?

If you have experience in the similar matter, I will gratefully accept any advice on how to move on. Thanks in advance for your time and consideration!

 

[kap-C]

Hello rentalprofit,

Supermarkets are indeed a very popular form of investment in Germany currently, not only in cities with a population in excess of 200,000, but also in smaller towns and cities. Also, (food) supermarkets are one type of investment property that I would consider in the eastern federal states of Germany. Prices for a supermarket, that is let to a strong tenant on a medium lease (5 to 10 years) would start in the region of 1.2 to 1.5 million Euro, yields range between, roughly speaking, 6% and 8%.

As regards your goals:

1) Germany is currently probably the safest country within the Eurozone to invest in. With a return starting at 4-5%, you should be well hedged against inflation, at least at the current rate of inflation, which is around 2%.

2) I know of supermarket properties that generate returns of 7+%, so this target is not unrealistic.

3) Property prices in Berlin and some other West-German cities are increasing dramatically at the moment and experts expect this trend to continue for the next few years.

As regards your questions:
1) Yes, I think Germany is a good place to invest in - in consideration of your goals and generally.

2) This is the magic question! ;-) Single-unit apartments in certain parts of Berlin (Mitte, for example) are considered very hot investments with dramatically increasing rents (and prices). But the yields would be nowhere near your target (yield for newly built in Berlin-Mitte c. 4%). However, you can expect these yields to increase with the rapidly increasing rents. You may also find a better capital appreciation in selected parts of the residential sector, than in commercial property. I would probably look at those too.

3) Another good question ... ;-) We are not allowed under the forum rules to advertise or post links to offer professional services etc., but I am sure if you have a good look around, you will find people, that might be able to assist you!

4) This is a decision, that you will have to make for yourself. If you invest in Germany, you invest in a relatively high level of economic and political stability, a clear transparent legal system and a very well established rental and real estate market. The economic future of the Eurozone is, of course, completely uncertain at the moment, but Germany would probably be one of the strongest countries coming out of a potential Euro-breakup and whatever a new German currency may be in such an unfortunate case - the Deutschmark 2 or the Euro 2 - it will probably be one of the strongest currrencies in Europe. But I am carried away here with speculation ... ;-)

 

[Rentalprofit]

Thanks for your reply Kap-c. I understand that advertising is not allowed by the rules, but can you PM me some reliable websites (from your knowledge) to search for German commercial property? Thanks!

 

[kap-C]

Thanks for your reply Kap-c. I understand that advertising is not allowed by the rules, but can you PM me some reliable websites (from your knowledge) to search for German commercial property? Thanks!

According to the "Forum Guidelines and Usage" (you should have received a message containing them) you will have to have five "quality posts" before the PM function is activated, so unfortunately I am not able to do that yet.

 

[aaronlove]

That's good post. Thanks for your sharing. If you have information about ltd. property for rent, please publish a post. I need it urgently.