Look at the investment strategy from the front when you consider Berlin property for sale. A Berlin realtor will consider investments and returns as well as tax implications.
€ Investments relate to specific areas and locations within those areas where Berlin property for sale commands higher prices and also higher resale prices as well a higher returns.
€ Tax implications have to be factored in. You pay capital gains tax if you sell property within 10 years of acquisition. The other option is to go in for short term rentals where you will pay income tax on such rentals at rates between 15 to 42% for income up to Euro 16008 and 45% if income falls in the Euro 250000 bracket, along with a solidarity surcharge of 5.5%, after deductibles such as financing cost, debt servicing, interest, renovation, maintenance and utility as well as insurance. Apart from income tax you also become liable to pay property tax varying locally. Depreciation rates also vary.
€ Arrange part funding from local banks so that your initial investment is between 30 to 50% of the property value, and then mortgage the property.
€ Your realtor will manage lease or rental and manage the property as well.
These are the top sides to property investment in Berlin. The underside is taking into consideration the state of the property and implications as part of the overall investment strategy.
€ If you take over an existing tenanted property, change of ownership does not confer rights to ask for more rent. In any case rentals can only be increased by 20% in three years if you have sufficient grounds.
€ You could take over a refurbished property but it may mean paying more than it cost to refurbish the said property. The most cost effective option would be to buy property as is and then renovate it. However, before you do so, you may want to consider objections from neighbors and collateral damage inherent to buying old but valuable property.
€ Energy and utility in such properties also need careful consideration. These were not designed to be energy efficient and may not have central heating. Heating as well as lighting bills could add up to a substantial amount. Consider this in the perspective of the German Law for green systems for residential buildings in accordance with the European Union Directive 2002/91/EG and you could end up paying a fine or penalty for deficiencies of thermal insulation of roof and cellar, windows and doors, face and heating systems.
These hurdles and higher costs of renovation could add up and erode your expected returns besides presenting you with headaches you never wanted in the first place. This is where a Berlin realtor, with expert knowledge of local conditions, will factor all these into a solid investment strategy when you consider Berlin property for sale. You will come out a winner.