Berlin Real Estate Investments Require Careful Consideration From All Angles

Tuesday 21 October 2014

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The “me too” syndrome affects investors. If Berlin property market appears hot everyone wants to get on the bandwagon and make a profit while the going is good without considering short term or long term factors or even other factors that could change the scenario. A sound investment strategy must be in place if an investor aims to create wealth.

Consider property taxation in Berlin. Unlike Munich or Hanover, the city relies on property taxes for its funding and there always lurks a likelihood that the property taxes may come in for a hike because most properties in Berlin are undervalued if one considers the current market prices.


This is just one of the many different things that can happen when one considers Berlin real estate investments. Builders start frenzied construction activity to meet anticipated demand created by local and foreign investors and by the influx of people into Berlin. Investors buy property without weighing all factors, knowing that they can always lease or rent out property and get handsome returns (several factors could negatively affect such decision) because demand is pushing up rent.

What happens next in an overheated market is that there is a correction. Demand for rentals may not rise as anticipated. There may be a glut of available property and foreign investors may find some other locations more lucrative. Change in local or government policy or rise in interest rates could put a damper on investor sentiment. As a result all the “me too” investors see their funds locked in with returns far lower than what they expected and no hope of making short term profits.


Avoiding this trap is easy if one starts the right way with consultations from a local Berlin Real Estate Agent who not only keeps tabs on current markets but also has the analytical abilities to anticipate future developments and advise clients accordingly.


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