Berlin’s rental market is strong, but negotiating with the property system can be a challenging experience. Here are 5 things that potential investors will need to consider before becoming an overseas landlord in Berlin.
1. Finding a property in Berlin takes time
One Berlin anomaly is you won’t find a ‘For Sale’ sign hanging outside an apartment you might want to buy. However most properties will be listed in newspapers or websites, so it’s easy to contact the agent to set up a viewing appointment. Still, turnover in sought-after areas can be slow – and extremely competitive. In popular areas it’s not unusual for househunters to turn up with all relevant documents in hand to make sure they don’t miss out – many are sold before the first viewings are even finished. Most of all beware properties labelled ‘für Schnellentschlossene’ (for quick decision-makers), which may have been on the market for some time.
2. So does setting up a bank account and a mortgage
While there are no restrictions on foreigners buying property in Berlin, arranging a mortgage and getting a bank account can feel like a labyrinthine challenge. Finding your way through the bureaucracy requires a thorough understanding to the system, so it’s advisable to work with an intermediary who speaks the language and understands the culture.
3. You will need a notary
Working with a public notary is a legal requirement. The notary will register the property, and also check that there are no reasons as to why the sale can’t go through. (NB this doesn’t include a survey or the notary visiting your property). They will also make sure all the paperwork is completed, and witness the deed of sale. Some notaries may speak English, but if not you will need to hire a translator.
4. There are additional costs
An unusual feature of Berlin property law is that the buyer bears the brunt of the costs. These include what’s known as ‘in and out’ fees: Estate Agency fees, Notary fees, Land Registry fees and, four weeks after the actual sale, Property Transfer Tax. Since October 2015 it’s also a requirement that the landlord, not the tenant, pay the agency fee when renting out an apartment.
5. Dealing with tenants can be challenging
The law in Berlin is very much designed to favour renters. Removing troublesome tenants can be very difficult – and has been known to take up to a year. It’s also important to remember you are buying into a building, so it’s essential to know who your neighbours are.