Saturday, November 3, 2012

German Real Estate

For an American....German real estate is an interesting topic.  Unlike the up and down trend in the US....you can't really point to any unstable real estate market in Germany.  There might be a slow period where things don't move fast (like two years to sell a place), or a fast-paced situation (property sells in 90 days).  So things are kinda dependable.

Prices?  Well....it really depends on where you want to live.  If you want to live in the burbs of Wiesbaden....you need to cough up 500k Euro for a fairly decent house.  In the burbs of Kaiserslautern....200k Euro would likely buy the same type house.

Condo market?  This becomes an interesting topic.  You can go and buy yourself a decent one-bedroom place....maybe seventy square meters....for 40k Euro.  An upscale three-bedroom place with 120 square meters....might be upwards to 100k Euro.

Fixer-uppers?  You can find decent places which need fifty thousand Euro of renovation.....going for forty thousand Euro.  A smart guy, with a few friends....could turn an investment in a year for easy profit.  The problem is that sales period.....some things might move in less than sixty days....some might take a year.

Dealing with the banks?  Well...if you don't have the down payment that they typically demand....you might have some issues, and creative financing through some insurance dealer might not be enough to clear your offer with a bank.  So you'd best plan on having that twenty-five percent down-payment, and have a decent job deal to keep the bank interested.

Remarkable deals?  If you went out into the bonies of rural Pfalz (around the K-town region)....you could find some great houses running in the 100k Euro range, but at least an hour's drive from any real job.  There's a reason why such deals don't attract lots of buyers.

So my advice to any American who gets into the German property buyer's state of mind.....sit down and prioritize what you can really pay, and afford.  If you go the fixer-upper route....you might want to draw up a five-year plan and do all the jobs in stages.  If you go the condo route....you'd best ask about monthly fees and special fees that the association might suddenly toss your way (a one-time 1k Euro fee for helping the paint-the-building situation would hurt).  A one-car garage for a two-car family might not be in your best interest.  Think long and hard over what you sign up and agree to.

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