How to make money on renting housing in Germany: step by step instructions

One of the main advantages of the German real estate market is that the rental business is protected at a fairly high level in this country. At the same time, both citizens of the country and foreigners can act as investors of such objects. For many, this particular segment turns out to be the most attractive. And that is true since in recent years, especially in the central regions of the country, the shortage of residential real estate has become quite noticeable. In most cases, it is associated with a slowdown in the construction of new facilities, in which the volume of demand does not decrease.

An additional incentive is an increase in both purchase and rental prices, associated with the same deficit. For example, in Berlin over the past 10 years, the cost of housing has increased by 152%. With such indicators, the number of those wishing to invest in residential properties has doubled. As for the lease, today there are dozens or even hundreds of applicants for one specific object. Interesting enough rental housing is in demand, even at inflated prices.

However, it should be noted that this trend is typical mainly for big cities and central regions. In regards to other regions the excitement for rent is somewhat lower. However, during the pandemic it was possible to see the growth in demand for different options for residential properties.

How to buy commercial property in Germany?

To become the owner of commercial real estate in Germany you must read the requirements in advance. This will help you avoid pitfalls.

It is worth to consider the following steps:

• First, you need to choose the type of object to buy - a new building or housing on the secondary market. Secondary housing can be considered more profitable, since its price is lower. In addition, you do not have to wait until the apartment is ready and carry out additional repairs.
• Next, you should find the right location. To do this, it is necessary to assess the demand in specific regions, as well as the prices for the purchase and rental of housing in them. If, according to the results of your calculations, the lease is able to recoup the investment, you can choose such an object.
• The next stage is the conclusion of the deal. This step is very imporyant, since you will have to competently study all the related documents. This will make sure that there are no debts, etc. It is also worth asking the old owners in advance about what kind of repairs an apartment or house may need in the near future. The process of signing the contract itself must take place in the presence of a realtor and, if necessary, an interpreter.
• After that, you can start renting out the purchased housing. In Germany, foreigners can do this kind of business without strict restrictions. If the property was purchased with an already valid lease agreement, all that remains is to renew it. If this is an empty housing, you will have to devote time to find new tenants.
• When potential tenants are found then it is only needed to sign a contact with them. This is a standard document that can typically be downloaded from the Internet. It contains all the data about the parties and the object itself.

After that, the invedtor will be able to receive income in the agreed amount. Do not forget that you will have to pay tax from it. Typically the rate is 3.5-6.5% of the price of the object.