German investment properties are a wet dream for real estate investors.
Germany is not only the largest and most stable European economy, it is also the most attractive investment location in the entire euro area.
Nowhere in Europe is more invested in absolute terms than in Germany.
This page gives you a good overview of the advantages of German investment property and eight frequently asked questions about it!
Table of Contents
- 1 German investment properties: Wet dream for real estate investors
- 2 Some facts about Germany
- 3 Germany – Magnet for foreign investors
- 4 Six major cities sucking in investment
- 5 Effects on German investment properties
- 6 Requirements for smart investments in German investment properties
- 7 Eight frequently asked questions about German investment properties
- 7.1 How do I find out if German investment properties are right for me?
- 7.2 What are emerging growth regions for buying German investment properties?
- 7.3 I have decided to invest in Germany. How do I proceed?
- 7.4 How transparent is the German real estate market?
- 7.5 Does every German city have a different profile?
- 7.6 What do I need to think about before I buy?
- 7.7 What risks and opportunities are involved in German investment properties?
- 7.8 What if I want to sell?
- 8 Other information about German real estate
- 9 Investment opportunities in German real estate
German investment properties: Wet dream for real estate investors
Germany is often portrayed as a safe haven in turbulent Europe. This status came about during the previous financial crisis.
To this day, this status still applies to Germany.
For example, investments in Germany in the year 2015 increased by 40 per cent compared to 2014.
This also marked the sixth consecutive year of increasing investment.
German investment properties are located in Germany, which is the best investment market in the entire euro zone.
Germany has staggering figures.
Thus, the country has not only the largest but also the most stable economy in the entire euro area.
Moreover, this country also has the most attractive investment market with the highest yields in the euro area.
Some facts about Germany
- Gross Domestic Product growth was as high as 1.7 per cent in 2015. Germany’s Gross Domestic Product was EUR 3 132.67 billion in 2016. This meant a growth in German GDP of 1.9 per cent in 2016.
- The German job engine is running at full speed
- Unemployment is at its lowest level in the last 25 years
- German population grows in absolute numbers
- The active working population is also growing every year
- German consumption is growing in a healthy way, year after year
All these facts are guarantees for permanently successful real estate and investment markets.
Especially for investors from abroad, these positive market conditions prove to be an important investment criterion.
The German economy is proving to be enormously crisis-resistant and investors like that.
Buying an investment property in Germany can therefore be very interesting, whether it is an active or passive investment in real estate.
Germany – Magnet for foreign investors
Proof that Germany is a magnet for foreign investors can be found in the fact that as much as 50 per cent of total investments in Germany come from abroad.
An additional advantage of Germany is the fact that one can invest in more than one city.
In Germany, there are currently as many as six major cities that are taking on the role of investment magnet!
Not one but several metropolises therefore play an important role in attracting investment.
In addition, there are also many other growth regions that can be particularly interesting for investors…
Six major cities sucking in investment
These six big cities with a large suction effect are:
Together, these big six cities account for as much as 53 per cent of total investment in Germany.
Each of these six cities is different. They differ in the following areas:
- Return on investment
- Economic fabric
- Specific regional strengths
Thanks to these six cities and their diversity, this situation in Germany is unique in Europe in terms of risk spreading!
German investment properties thus offer wonderful options in terms of diversification.
Effects on German investment properties
Due to the increasing interest in Germany from foreign investors, some effects occur:
- The supply of available investments and investments is growing less fast than demand
- This creates scarcity and increasing competition among investors to find attractive assets
Requirements for smart investments in German investment properties
Whether you are a small, medium-sized or large investor… In order to determine the right value of an investment and do a good deal, there are a number of conditions that must be met:
- You must have accurate and detailed market information
- In addition, you should have reliable contacts in the local market
- You need to understand the local customs and culture
- And you need to understand the market mechanics of the investment market
As a foreign investor, it is best to look for a reliable partner with the necessary expertise.
Feel free to browse through the real estate offers in Germany offered by companies that can provide you with complete guidance throughout the entire buying process.
These parties are based on enormous expertise and can guide you in your search for suitable investment properties in Germany.
Eight frequently asked questions about German investment properties
How do I find out if German investment properties are right for me?
Germany has several important and interesting investment locations.
To find out if Germany is for you, you should therefore think about the different regions in Germany.
There are the six big cities that together account for just over half of all annual investments in the German property market.
These 6 cities are Berlin, Munich, Cologne, Düsseldorf, Frankfurt and Hamburg.
But you might as well opt for a growth region!
These are regions with a stable rental market but where property prices are somewhat lower…
What are emerging growth regions for buying German investment properties?
These emerging growth regions have the following characteristics:
- Low unemployment rate
- Lower property prices compared to the 6 big cities
- Stable tenant market
Some examples of these growth regions are the German states of North Rhine-Westphalia and Lower Saxony.
North Rhine-Westphalia as an investment hub
In North Rhine-Westphalia, which in terms of surface area is larger than Belgium, you have numerous attractive growth cities such as:
North Rhine-Westphalia borders the Netherlands and Belgium and is world-famous for its Ruhr area.
North Rhine-Westphalia is Germany’s most efficient state in terms of economy and industry.
In the past, this state was known for its coal and steel industry.
Now, a large part of the region has been transformed into a knowledge economy, with sectors such as services and creative industries growing and flourishing.
This state is the beating heart of the German economy, the engine of the European Union!
Very interesting if you are considering investing in German investment properties…
Added value potential and a stable rental market: both are present in Germany! And buying real estate in Germany in NRW offers the greatest appreciation potential.
Lower Saxony as an investment hub
In Lower Saxony, you also have interesting growing communities such as Wolfsburg, Braunschweig, Emden, Salzgitter, Wilhelmshaven, Oldenburg and Delmenhorst.
This state is larger in area than the Netherlands and its capital is Hannover. Lower Saxony’s economy is based on agriculture and industry.
In terms of transport, the ports of Wilhelmshaven and Emden play a particularly important role.
Lower Saxony is also the hub for road transport between northern and southern Germany and between eastern and western Germany.
Volkswagen is without doubt the largest and best-known company in this state. Volkswagen’s headquarters are in Wolfsburg.
I have decided to invest in Germany. How do I proceed?
Germany is special compared to other Western European countries.
There are the six big cities (Berlin, Cologne, Hamburg, Munich, Düsseldorf and Frankfurt), which are all popular with investors large and small.
The growth regions of North Rhine-Westphalia and Lower Saxony (mentioned above) also offer interesting opportunities.
Each of these cities and regions is different and therefore it is recommended to explore them on your own.
View the range of investment properties in Germany. Some building promoters will accompany you from A to Z, with a comprehensive tour of the site!
How transparent is the German real estate market?
Since German investment properties are attractive to foreign investors who want to diversify their investment portfolios, the German real estate market should act transparently.
Since the interest of foreign investors is increasing, the transparency has already increased remarkably!
Foreign investors demand transparency and clarity.
Does every German city have a different profile?
Yes, every German city is different. Berlin, for example, offers the greatest appreciation potential as the German capital is rapidly becoming a European metropolis.
At the same time, the real estate market there is not yet as levelled as in Brussels, Amsterdam, London and Paris.
So you can still get bargains that can offer substantial added value in the long run!
Would you rather invest in German investment properties in an international city for world citizens?
Then it is better to choose Frankfurt. Frankfurt is the financial centre of Germany and actually of Europe.
It is also home to numerous international banks. The city also has huge skyscrapers, a bit atypical of Europe…
As a real estate investor, would you rather focus on properties with low entry barriers?
So a lower price per square metre but with long-term stability and low volatility?
Then pay attention to North Rhine-Westphalia and Lower Saxony.
Investment properties for sale in Germany
Take a look at the following potential investment properties in Germany:
For small and medium budgets
- German real estate as an investment with income guarantee, trustee and professional management in Gelsenkirchen, good returns from 41,000 euros equity combined with a loan
- Real estate in Germany as an investment with carefree all-inclusive rent management and rental service in Essen, incl. guaranteed rental income and yield with excellent capital gain potential, from 33,000 Euros own contribution
- Revenue properties in Germany as an investment with secure rental income (contractually guaranteed by the developer) – From EUR 65,000, good annual net return
- Buying a flat in Germany as a carefree investment
For bigger budgets
- Buy block of flats in Germany – 12 rental units (expansion to 13 possible), completely renovated property, including stewardship and 4 years contractually guaranteed rental income
Of the six large cities, Munich and Hamburg also meet this profile, even though they are already slightly more expensive compared to the growth regions of North Rhine-Westphalia and Lower Saxony.
What do I need to think about before I buy?
First of all, you need to decide exactly how you want to invest in German investment property.
Would you like to buy an investment property abroad, for example in Germany?
And thus take care of everything yourself in terms of prospecting, negotiation, analysis and purchase?
Or would you rather go with a local property manager?
Who can assist you from A to Z, such as with a carefree rental service and an all-in service package?
This second option has the advantage that you can benefit from local knowledge and know-how… Do not underestimate this!
This can benefit your investments and increase the process and speed.
Also think about maintenance, management and rental.
A carefree investment in which a local property manager takes care of all this also offers advantages.
Look at the offers to learn about the different hassle-free investment options.
What risks and opportunities are involved in German investment properties?
The opportunities for investing in Germany are extremely diverse and varied.
You can go there for both opportunistic and more stable property investments.
Private investors can go there for low-risk real estate investments.
These are then buy-to-let properties with long-term leases, possibly covered by vacancy insurance!
What if I want to sell?
Maybe you want to cash in on your added value in the future… A question often asked by potential investors is what happens if they sell?
Germany is huge and heterogeneous and has many interesting investment markets.
The liquidity of real estate in Germany is therefore high, also for German investment properties.
The risk associated with cyclical movements in the property market is much lower in Germany than in other countries!
This is because in other countries there is more focus on one big city.
Germany, on the other hand, offers a wide range of interesting cities and regions to invest in real estate!
Other information about German real estate
Apart from the liquidity of such an investment, one should also consider the tax impact of such a sale (with a possible capital gain).
The tax treatment of the sale of German investment properties must also be taken into account (taxes related to investing in German property).
The following information about Germany and real estate is also interesting:
- Investing in German real estate is choosing hard growth and reliability!
Investment opportunities in German real estate
For an overview of interesting, carefree real estate properties for sale in Germany, click here.