Shall I buy or shall I rent?
Many non-profit focused people (I am saying this because for international investors it is a no brainer, that investing in Berlin is lucrative) get to a point where they ask themselves, if it is more convenient or rather smart to buy a property or to rent one.
One thing is for sure, it has never been so easy than today to get cheap mortgages.
What are the criteria to get a mortgage in Germany?
- an european passport
- or an unlimited residency in Germany
- some savings (at least enough cash to pay the purchase fees)
- an unlimited work contract
Which benefit do I have when I own an apartment?
Well, first of all you don`t have to deal with the german Hausverwaltung (property manager), at least not from the side of a tenant. When you are the owner of an apartment, they approach you with more gentleness.
- you decide how many tenants can stay in your apartment
- if you have to leave the city you can sublet your place without asking permission
- you can furnish the apartment and sublet it without having to consider the Mietpreisbremse (the governmental lid upon rents)
- you can change the interior design the way you want it (except of bearing walls and windows)
- if you re-sell it after few years, you will gain about 10% value growth per year
(careful with rented apartments, selling them under 10 years means you have to pay taxes on the profit gain, if you´ve used the apartment yourself or the apartment was empty for the last 2 years, then you are free from that tax)
But, what are the con`s:
- you have to be consistent with your mortgage payments
- annual property tax
- if something breaks inside the four walls, you need to get it fixed
It is very interesting that Germany, although it is the richest country in Europe, it has a very low rate of homeowners (it fluctuates a bit from county to county). But, what else shall we say than „now or never“?