Newsletter June 2011
|
Welcome to our latest German Property investment update. |
|||
 |
|
|
|
 |
|
||
 |
 |
 |
|
Investing in Chemnitz – Looking for Yield and QualityIn today’s property market, an increasing amount of investors seek a safe a reliable home for their money, beating the cash return offered by banks or other asset classes. A number of markets around the world offer high returns, sometimes up to 10% net yield and occasionally beyond. But the real skill is finding markets where this yield is sustainable, and supported by a sound economic picture. One good indicator of this sustainability of yield is when local and national banks are prepared to share the risk with the investor in lending to higher levels of finance. In this paper, we will look at one such market in Germany, the city of Chemnitz in Saxony where 10% net yields backed by 80% loan to value finance is possible for international investors. This is a rare combination, especially at today’s lower rates of finance, meaning real and sustained returns are possible. Background to City Chemnitz is the fourth largest city in the former east of Germany, behind Leipzig, Dresden and Halle and number around 240.000 in terms of inhabitants. It has a predominantly industrial past, and is still a leading business location with many companies such as Siemens and Volkswagen, who have settled here. In recent years, Chemnitz has become somewhat of a centre of innovation in East Germany, with employers taking full advantage of its proximity to eastern states of Europe for cross border trade in products and services. Economic Factors Read the rest of our report on Chemnitz Hedging your German Finance
As you know, interest rates are still near historic lows and with Get in contact with the ProVenture team for more details on the current finance position, either | |
Getting Clear on Running Costs – The “Warm Rent” of a PropertyPerhaps the most complex aspect of German property ownership is the understanding of the ancillary or running costs of the property, the so-called “warm rent” associated to each tenancy. Whilst the issue is more complex than in other markets, the action on landlords is minimal as the activity is conducted on your behalf by your manager. But it is good to know what is going on behind the scenes, and any input you could have to make your investment run more efficiently. In many markets around the world, you will receive a gross rent from your tenant and then deduct the fees for running of the property. This is the most simple method of running the investment of course, but calculating your real return or yield can be more difficult, with perhaps unknown costs at the outset. Being an investor-driven market, in Germany all of the unavoidable costs are bundled together in what is known as a “warm rent” and is dealt with separately by your manager. Therefore, your tenant if it is say a 60 sqm apartment may pay you net rent of say 300 Euro per month and make an additional payment of 150 Eur for the “warm rent” costs. With the yield in Germany based on just the net income, it is therefore far easier to evaluate a property yield quickly. The items comprising the warm rent would include:
|
Leipzig Property Prices in 2016 will be…We get out the Crystal Ball.. We have written recently of historical house prices in our key markets in Germany, made reference to some of the markets that yield investors are looking at currently and discussed matters of the Euro and the likely effect on values in Germany. In this short article, we will look at the key drivers to property price appreciation and their impact on our key market of Leipzig in Germany. Some of the key factors which will effect capital values in the next 5 years in the market can be listed as follows: 1 Investor confidence 2 Investor access to finance and finance rates 3 Rental level development 4 Owner-occupation levels 5 Recent capital value trends 6 Affordability Look at each in turn and see our predictions for 2016
Latest IFO NewsLatest IFO report – Ifo Business Climate Index Rises |
|
PV360-Small Building in Good Leipzig District200,000€ | Leipzig This is a superb property investment opportunity in Böhlitz – Ehrenberg, a location north-west of Leipzig. It is an attractive and peaceful area, with good quality shopping, recreational facilities, and schools. It is well connected to Leipzig city centre, and is extremely close to the forest and parkland that characterises the north west of Leipzig’s city centre. The property is a fully let, entirely residential offering, with five out of the six units (over 4 floors) sized at approximately 60 sqm, with a larger unit on the ground floor. The building has a good size rear communal garden, which is regularly used by tenants of the building.
PV356-Very high yielding new refurb building245,000€ | Leipzig Approx. Size: 556 sqm This property is located in Kleinzschocher, an area located 4 kms south-west of the city centre. Constituting a total of 11 units (one commercial, the remainder residential), this property is split into two separate buildings. The rear house contains 4 of the residential units and tenants from both buildings share a central garden / courtyard which has four car parking spaces. The building is fully tenanted, and was refurbished in 1995 to a good standard. All but one of the residential units are in the range of between 45 – 55 sqm.
PV368-Brand New Refurb Stunning Building, Leipzig350,000€ | Leipzig Located in the increasingly-popular district of Lindenau, here we have a residential apartment house, which has been newly-developed and complete in July 2011. Lindenau is the most populous district of Leipzig, and its population is growing very quickly as the city continues to expand. Being only 4 km from the city centre / 10 minutes by tram is convenient for residents, as are the nearby parklands of the Clara-Zetkin and the shopping and commercial area of Lindeanuer Market which is a short walk from this property.
PV355 Apartment building in south west Leipzig400,000€ | Leipzig Type: Residential This is a purely residential offer in an early 20th century period property, around 4km south west of Leipzig city centre. Situated in the popular district of Kleinzschocher, the property appeals to residents who appreciate the sort commute by road or tram to the city, whilst being in close proximity to the parklands and lakes to the south of Leipzig. The area has developed much over recent years, with most property in the area being refurbished to a good standard as this property is. The property has accommodation set over 5 levels with three apartments on each level and is presented in a fully let condition
PV298-Large, fully rented property in LindenauPrice drop to 450,000€ | Leipzig Approx. Size: 1027 sqm This fully rented property is a mixture of both commercial and residential units. Located in Lindenau, just a couple of kms west of the city centre, it is perfectly located with good transport links to the city centre and close proximity to the Clara Zetkin Park. It is also on a road that has been earmarked by the City to undergo a
PV513-Excellent Refurb Building in Bremerhaven385,000€ | Bremerhaven Approx. Size: 778 sqm The object is a full basement house with 10 apartments and 15 garages and parking in the rear part of the plot. The property is in an excellent condition and has been very well maintained. All apartments have a rear balcony and are fitted out to meet all modern requirements. In the last years the roof insulation, Sound proof windows on the road side were replaced and also new rear windows. The public areas are all freshly painted with a new hallway window and front door. The cellar was repainted and all garage roofs and five garage doors replaced. The heating and hot water is supplied via an oil-fired central heating. |
|
German Property Research
Investment Articles Leipzig Districts for Investment Berlin Districts for Investment
enquiry@proventureproperty.com UK:+44 (0)115 7142820 or DE +49 341 248 6810 | © 2011 ProVenture Property |
|
If you dont want to hear from ProVenture via these updates please |
