Boca Raton, FL · Member since 2016 · 15 posts · 4 votes
10y
I assume this investment is in Germany. Based on your experiences what is the (average) ROI? Based on statistics a lot of people make a negative ROI or maybe just up to 3%...just a few very lucky investors make a ROI maybe up to 6%. Can you confirm this? And with the tenants rights in Germany you can be really screwed if you have rental nomads in your property/apartment - do you agree? What do you think about vacation rentals in Germany?
Boca Raton, FL · Member since 2016 · 15 posts · 4 votes
10y
Hi Michaela, hope you are doing well and great to meet you here! Well, that is even better because I think I can make a better ROI in the US and therefore I'm more interested in the US market currently and I'm almost ready to start buying my first property in the US. But there are a few areas/questions where I didn't find the information that I need or where I just want to have the opinion of someone who already has experiences. So if you don't mind and would do me the favor please take a look at my other posts - maybe you can help me with some of the questions. Thank you very much in advance and have a great day.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
10y
I'm sorry, but the questions I've seen are based on very different scenarios. While I grew up in Germany, I live in the U.S. and have no plans to return to Germany. I don't really worry about zika. And, yes, Trump becoming president will likely hurt international relations. But I do my investing in my small local area and don't expect it to be majorly effected by that.
We're in very different situations, so I can't help you with that.
Investor · Reutlingen, Baden-Württemberg · Member since 2016 · 45 posts · 25 votes
10y
Hi Mario, yes I'd say the gross return might be around 6% (at least for my investments). You can do better with higher risk investments e.g. more rural areas where you can see returns of 10%+
Investor · M, Rhine · Member since 2016 · 5 posts · 1 vote
10y
Hey,
I allready started investing in Germany. But I really only started. I just bought my first real investment. I guess you would call it a 3-bedroom-appartment. I allready got a single family house for me and my family. And i read a lot of books and started networking in my City.
As I head and read till now, you can make better ROI in the US. But my experience of the US market only results on books and the BP-podcasts. So if i hear about a loan with a about 7,99 % intrest, it would be hard to gain a positive cash flow in Germany - depending on what rate you would finance it for.
In my oppinion, the German market is great for building wealth, but the total cash flow isn't that high. The advantage in germany is, that if you get a classic bank-loan, you generaly only need to pay the closig costs; so leverage is better here.
I bought my appartment really cheap. 1k per square meter. Normal prices for such apartmens is about 1.6-2k/square meters. I only payed the closing costs. The intrest rate, i have to pay, is at 1.7 % and I am paying 3,45 % repayment. So depending on my cloasing costs, my puny cash flow is at 13.50 % and i got a total ROI (including the repayment and without consider repairs) of 62.79 %. So leverage is my friend. I actually save all the money from my cash flow for repairs, because I don't actually need it. So it depends on what your pritrity is and how good your deal is.
For sure: i could turn my repayment down to 2 % (my bank would allow that) and get more cash flow, but I prefere the higher repayment.
Investor · M, Rhine · Member since 2016 · 5 posts · 1 vote
10y
I have just read my own post. I used the term "Cash Flow" wrong. I ment the difference between the money I get from my tenent and the money I have to spend for the lone, property taxes, ... . I actually dont know the English term for that. So sorry for the strange answer.
new york, NY · Member since 2015 · 67 posts · 11 votes
9y
@Mario S. , I grew up in Zurich and moved to NYC a year ago. I yet have to make my first investment but am looking to do so soon in the Northern NJ region. Let me know if you would like to exchange any thoughts.
Rental Property Investor · Oakland, CA · Member since 2016 · 268 posts · 106 votes
9y
Hi @Account Closed. I grew up around Zurich as well and moved to the SF bay area around 5 or 6 years ago. Nice to see some other swiss folks here on BP :-)
Boca Raton, FL · Member since 2016 · 15 posts · 4 votes
9y
@Sandro Hagenbuch, nice to meet you here and that I see more and more people from Europe on BP. I still have to make my first investment too which will be very interesting & exciting since I think the first deal is the biggest step. I spent a lot of time educating myself and I think I've a good knowledge by now. But I don't have the time and the mood to go through a "learning curve" that a lot of people are talking about. Therefore I'm very strict with my deals that I analyze and I've to have a good feeling about the turnkey provider. I'm also a member of a network who have their standards and checks for affiliates which helps. I'm definitely open to exchange thoughts.
Property Manager · Oestrich Winkel, Hessen · Member since 2016 · 31 posts · 9 votes
9y
Greetings,
I also have some experience investing in properties in Germany. There are many factors to consider and obviously need to be based on your individual strategy. Due to the recent regulation, based on the landlord tenant laws and rent ceilings, it is getting harder and hard to earn a good cash flow. Home prices are completely overpriced at the moment and the European Central banks negative interest rates are not helping.
Like Silvio stated, leverage is key and important right now. Eventually the properties will be paid off or at least become a value add.
A few tips, at least from my perspective:
1. Germany has a large influx of Expats for business short and medium term. = focus on furnished housing/corporate housing for it beats the rent ceiling
2. Students: Always good everywhere and you can leverage the furnishing as well
3. Refugee housing. The state will pay for a suitable home for refugees coming from overseas.
4. Watch out for capital gains within 10 years of purchase (25%!)
new york, NY · Member since 2015 · 67 posts · 11 votes
9y
@Simon Stahl Nice! How do you like SF? Have you done any RE transactions yet? Let me know if you want to bounce off some ideas!
@Mario S. Yes, I absolutely agree with you. I am a big believer in discipline (especially financially) too. If the numbers do not work and are far off, I am not going to look at houses. On the other hand though, properties are very individual and especially around this time needs probably more creative ways to get to the numbers you're looking for. How are the numbers in your area? (Cap rate, Appreciation etc.). Very happy to bounce off some ideas.
I am leaning towards MFH from 2 units to 10 units. I really have to analyze more now and try to create an excel spreadsheet in order to do it efficiently. How do you guys analyze properties, areas etc.? @Mario S. and @Simon Stahl