FAQ for the investor in Berlin
Is a foreign citizen eligible for mortgage and in what terms?
The amount of funding is dependent on the assessment of the property. Usually, it is 50-54% of the value at fixed interest of 3.25% (10 years term) while repayment is 1% of the fund.
Why is it worth it to take a mortgage?
Is mortgage interest tax deductible?
Which one-time expenses should I expect when purchasing a property?
The total amount of all additional expenses will be approximately 12.5 – 16% as follows:
6% purchase tax
2.5%-3%-notarization (1.5% notary fee, 1% registration fee, 0.5% managing fee for notary trust account)
1% mortgage broker (if funding requested)
3%-6% real estate brokerage (depending on property)
Are tenants in Berlin protected by law?
1. As long as the tenant meets all his financial obligations (rent, maintenance, authorities etc.) he can stay in the apartment for an unlimited period.
2. Rent may be increased up to 15% within 3 years, up to the maximum in accordance with the ‘Mietspiegel’ limit.
What happens in case the tenant failed to pay the rent?
Responsibilities of the management company and communication with them?
1. Technical management/services – cleaning, maintenance, renovation of the building, insurance of public space and continuous reporting to the home owners.
2.Rent management -locating new tenants, signing the contract, collection of rent and additional costs, overseeing payments to authorities, general care of tenants, controlling rent increase.
To ensure maximum profit it is recommended to choose a company that practices proactive rent management.
What is Sweet Home’s role as my representative?
1. Locating the adequate property in a good location and at a reasonable price.
2. Coordinating and guiding the financing procedure at the mortgage bank through closure.
3. Personal guidance through the notarization process/signing of the contract.
4. Assistance in finding the most attractive funding package for the investor.
How do I sell my property and to whom?
The buyer’s market in Berlin consists of both, investors and locals, who realized that, due to increasing real estate prices and rents, they have to act quickly and purchase property.
The profit is low, why not invest somewhere else and enjoy price increase there?
Is it recommended to insure the property?
Is it possible to see the property prior to purchase?
In general, the management company has to be notified in writing and will arrange the visit with the tenant. Notification of the planned visit should be given at least 2 weeks ahead.
Nevertheless, following possibilities have to be taken into consideration:
1. The tenant will agree and be present at the agreed date.
2. The tenant will not show up and give a reason for not being able to be there.
3. By the time of the set date – the property has already been sold.
4. The owner has already practiced his visiting rights (up to 4 times a year) – no further visit is possible.
How do I know if the purchase price is reasonable?
Which information is available about the tenant?
Do I actually have to go to Berlin?
How will the property be legally registered in my name?
What happens to the money in the reserve fund when selling the property?
What happens if a tenant moves out?
What to do when a damage occurs in the apartment?
In case insurance coverage exists for this type of damage, the insurance will take over.
Why use your services and not take a German real estate agent?
2. Excellent customer service, full guidance throughout the whole purchase process including financing and notarization.
3. In most cases, we charge you 50% less for our broker services than local agents would.
How can I buy a property without seeing it?
At times, a touch up may be necessary or it might even be in a better condition than before. The locals usually take good care of their apartments and sometimes even renovate themselves. Therefore, it is not crucial to visit the apartment. Should you insist, we will of course arrange for a visit, after notifying the management company and the tenant, taking the local terms/limitations into consideration.