Munich, Germany 路 Member since 2019 路 1 post 路 1 vote
Hi everyone, so I am currently living in Germany moved about 6 months ago here and learning german,originally I am from Croatia.In the meantime I am learning about real estate because I am planning to become an investor.And everything I am lerning is mostly from you guy,books you suggested etc...That means that everything I am lerning about is based for USA . My question is does that even makes sense is everything different for Europe and does everything vary from country to country? Anyone from Germany maybe that could help me out 馃槄
Sweden, Stockholm 路 Member since 2019 路 4 posts 路 0 votes
6y
Hi Kristijan!
I am also from Europe. I am currently living in Stockholm. It would be amazing if we could find some information about real estate investment in Europe.
I'm also interested, as i live in Switzerland, but i want to invest in Portugal. I also read (and i'm still reading) many books about real estate, but it's true that it's most based on USA laws.
Where could we look to know more about European real estate investing?
Investor 路 Fort Lauderdale, FL 路 Member since 2019 路 124 posts 路 68 votes
6y
@Kristijan Katava I will follow this thread as I am curious to hear feedback. I am American who has lived abroad for some 7 years and always was curious on this myself. While most of the books are never geared towards other countries, it makes the barrier to entry much different.
Some extra things that you should break down that are not in books are learning your own local and country laws on real estate. Learn about tax advantages that can be taken, as it is most likely you do not have the same 1031 exchange of self directed IRA benefits that pertain to us. Also, expenses can be completely different in foreign countries. Your management expenses, or property taxes could be extremely different thus changing the analysis process by a lot. Your rehab costs due to the cost of goods and labor can also be much different. My best advice would be to network with others in Europe to really tackle these parts of the equation. I may invest in Europe or Brazil in my future. BEST OF LUCK!
Investor 路 Reutlingen, Baden-W眉rttemberg 路 Member since 2016 路 45 posts 路 25 votes
6y
Hi @Kristijan Katava, I am invested in Germany for almost ten years now. If you have any specific questions feel free to contact me. Real estate is alway local and so are the rules and regulations. Many concepts and rules you find here on bp will not apply in Germany. Like Reese stated things like IRAs simply do not exist. Tenants laws are more tenant friendly, the cap rats are lower from my experience. On the other hand, I think financing options might be better in Germany. I can easily get 110% financing (property plus closing costs) for my properties.
I still like to read the stories and listen to the bp podcast as it is very inspiring what others are achieving through real estate.
A good source for the german real estate market is immopreneur.de. I don't know how good your german is already but you can find lots of useful information there (a bit like a mini bigger pockets for Germany).
Rental Property Investor 路 Munich, Germany 路 Member since 2018 路 54 posts 路 22 votes
6y
Hi @Reese Newell and @Tiago Neto I am Brazilian. I've been out of Brazil for 4 years now, but I can share some thoughts. I also wanted to know what's Reese's view on the Brazilian market now.
Brazil is an interesting market, depending on what you do but you better have the right knowledge and connections. Something interesting to know is that the Brazilian reads has lost 75% of its value against the US dollar over the last 9 years! That represents a huge increase in purchasing power!
Rental Property Investor 路 Munich, Germany 路 Member since 2018 路 54 posts 路 22 votes
6y
@Mike Lambert the Real point is a god one, but not so good if you but the inflation also in the math. We had a 10+% inflation in 2015 for example. 6% was "quite normal" for the other years. So RE prices also raised those years.
Knowledge and connections I totally agree. Essential!
Yes, you need to take inflation into account. But, even if you take it into account, most of the huge currency discount will remain.
Moreover, while inflation has been pretty much inexistant in North America and Europe over time, their real estate price inflation has been very high during those years. And, at the same time, Brazil has undergone a big economic crisis, which has had a downward effect on real estate prices expressed in reais, which has compounded with the drop of the reais against the dollar.
Investor 路 Fort Lauderdale, FL 路 Member since 2019 路 124 posts 路 68 votes
6y
@Tiago Neto & @Andr茅 Rairan Zacchi Pereira, sim eu acho que o Brasil tem um mercado interssante! Nao sei se eu posso escever em Portugese aqui :). I really don't know if BiggerPockets minds answers being in another language.
My fiancee is Brasilian and a real estate agent here in South Florida. Her brother runs a company that is growing very fast with 300+ employees dealing with "Minha casa, minha vida", which is a government run program for affordable housing. The regulations are much different, and the agents under him do not need to go through any formal training to be agents. They simply learned on the go.
As far as Brazil, wow, the reais has lost a lot of value since I first began frequenting the country some 10 years or so ago. Their main exports Iron, Petroleum, Sugar cane, and soybeans. Most of their infrastructure has become outdated for petroleum relative to some big players on the World stage, and with the advance of alternative energy sources, this spells bad news.
In addition, Brazilians were extremely happy during certain presidential runs due to the economy increasing, but were not aware of the macro economic policies and their future implications on rampant inflation. The covid effect taking place can potentially really hurt these emerging markets like Brazil. Lastly, I am always very wary of countries with open corruption taking place at the highest levels. While I believe I could enter the Brazilian market and make fortunes relative to the USA, I would also be building systems to quickly convert my Reais back to other currencies, all while keeping an eye on the government potentially just taking my property one day with no recourse.
Overall, these markets provide a lot of opportunity for savvy investors who speak the langauge, but you will have to deal with a high level of bureaucracy and a lot more headaches with properties, while having to learn new systems and taxes. I think citizenship in these countries to add to a portfolio elsewhere as a hedged risk would be a terrific path, and one that I plan to explore once my US portfolio turns in to an empire in the next decade. Feel free to connect with me and we can have deeper chats on this!
Rental Property Investor 路 Munich, Germany 路 Member since 2018 路 54 posts 路 22 votes
6y
Hi @Reese Newell those are all fair points. Let's keep in touch, I am not planning to invest back home at the moment, but for sure will do in the future.
I wouldn't get involved in a Brazilian government program.
I would definitely invest in short-term rentals in Brazil today. I'd buy super cheap because of the dramatic fall of the Reais that you mentioned. As I rent in USD, I'd get a huge rental yield. And then, as the icing on the cake, I might get a huge capital appreciation as the USD/BRL exchange rate reverts to the mean.
Investor 路 Fort Lauderdale, FL 路 Member since 2019 路 124 posts 路 68 votes
6y
@Mike Lambert The main thing is you cannot count on currency fluctuations like that. If it were that simple then it would be extremely easy to print billions within a few years doing forex trading. I would really look at the future implications of a countries GDP, their growing or declining industries, and their main exports to see what kind of potential they have. Of course digging to the very detailed would be what forex traders would do.
I do see the upside to the short term rentals in Brazil and do see a potential very high yield. The downsides are the government may just take your property one day out of thin air, and you may have large issues with renovations, permitting, and needing to know the right people to grease.