5 rules for a successful Berlin Investment
Rule # 2: Keep always your eyes on the profitability of your Berlin property. Continuously develop the rents of your property, always in accordance with the law. Put yourself in the position of the tenant: Avoid excessive or unjustified rent increases. Re-renting often implies a negative impact on the profitability of your property. Renovations and vacancy times cost money. The best is to strive for a balance between rental income and tenants’ satisfaction.
Rule # 3: Form a reserve for later repairs. Your Berlin property ages. Therefore, you must insure your properties against damages and repairs. It is recommended to put a part of your monthly rental income into a reserve. We recommend you to save annually about one percent of the purchase price.
Rule # 4: Separate your accounts. Disconnect the cash flows created by your Berlin real estate from your household account. Apply accumulated reserves, unless this is agreed in the credit agreement, for the use of extra repayments. This reduces the interest burden and the term of your loan. Or, alternatively, leave the money on a better -yielding savings account.
Rule # 5: Focus on location AND potential. Location, Location, Location: This is the most cited wisdom when buying real estate. In Berlin this motto does not always apply. Locations that are unnoticed and dingy today may be a trend district tomorrow. Best example: Wedding, Neukölln and Moabit. Therefore, you as investor should not focus on those areas which are already fully developed. Analyze the potential of several districts. Visit the website of the Senate and inform yourself about development programs, projects and development areas. Or ask your Berlin real estate agent: The Guthmann & Guthmann Immobilien GmbH