Realtalk: why your real estate search is taking too long
I help people to buy and sell apartments in Berlin, first as an employee at Ziegert/Knight Frank, and now through my own successful Berlin real estate agency. Joining in many buyers’ journeys has taught me some valuable lessons on how to simplify and expedite your real estate search. The following advice is based on my experience in the Berlin real estate market, but is applicable to prospective buyers in any location.
The Property Purchaser’s Balance Triangle
When looking to buy an apartment or house, either for investment or your own use, it is extremely important to take into consideration The Property Purchaser’s Balance Triangle.
Your search needs to be weighted more heavily in favour of two points, and less heavily in favour of one. For example, if you are adamant that you want a particular sized property within your predetermined price range, you may well need to compromise on your ideal neighbourhood. This does not mean settling on property in a “bad” borough, only that what would be helpful in making your purchasing journey smoother and faster is making a list of your top three neighbourhoods, and balancing your second or third choice against securing the size of the apartment or house that you want to buy at a certain price.
Another way to weight The Property Purchaser’s Balance Triangle would be, for example, that you’ve fallen in love with Berlin-Tiergarten and you have a budget without much wiggle-room. Clearly, then, you need to compromise on the size of your desired property.
This is all very obvious! But what I encourage my purchasing clients to do is to consider The Property Purchaser’s Balance Triangle beforethey start looking at properties. This saves them a lot of time and hassle in not viewing apartments or houses that inevitably are either not the right size, not within their budget, or not in their preferred neighbourhoods.
Compromise
The key to making buying real estate simpler and smoother is to understand what is important to you, and then be willing to compromise on what is not as important. Is it crucial that your future home or investment property has ample outdoor space, or a stunning view, or bespoke designer built-in furniture? Then, ask yourself on what you are willing to compromise: perhaps you don’t really need an en suite, but can’t live without being in walking distance to parks, lakes, and forests.
Financing
I always recommend that my clients get their financing in order before we embark on our buying journey. Looking back at the triangle, if you are unsure about your budget you won’t know how to weight it against your location and size criteria. If you require an English-speaking financial specialist who can provide you with offers from multiple banks for comparison, feel free to contact us, and we will connect you with the right expert for your needs. We provide this service to our clients at no additional cost!
Define your parameters
To buy a house or apartment more effectively and efficiently, you also need to make other decisions prior to viewing any properties. Do you have the time and budget to oversee renovations, or do you want a turn-key solution? Do you understand the pros and cons of buying an altbau (old building) versus those of buying a neubau (new building)?
The altbau vs neubau choice is particularly important in Germany, and is a decision that those looking to buy real estate in Berlin, or anywhere else in the country, need to make well before taking the time and effort to view a property.
Investment or own use?
If you are buying property to live in yourself, then most likely your Property Purchaser’s Balance Triangle will be weighted towards size and location. Research the neighbourhoods in which you would like to live before you begin viewing properties. Visiting them at different times of the day will help you to understand the various environmental and noise conditions present, as well as to appreciate the amenities and lifestyles on offer.
According to the PWC “Investing in German Real Estate 2018” study, Berlin rent prices rose by an average of 3.2% in 2016 compared to an inflation rate of 0.5%, and an annual GDP growth of 2.7%, making the present the ideal time to be investing in this city’s property market. Take a look at our white paper for all the relevant 2019 data.
If you are considering purchasing German real estate, keep in mind that selling investment property within 10 years of purchase will incur a 40% tax on the profit. Perhaps you want to buy property as an investment now, but in which you will eventually live yourself? Again, I recommend referring back to The Property Purchaser’s Balance Triangle to understand on what you are willing to compromise, and so better define the parameters of your ideal property at the beginning of your purchasing journey.
These are all vital questions to ask yourself in order to make the process of buying real estate easier in any locale. Feel free to contact us if you are interested in buying real estate in Berlin, would like further information on the German property market, or would like to have a chat about what sort of property you’re looking for.
Follow us on LinkedIn and Youtube for more Berlin real estate tips and advice.