North West Estate - income properties in Germany
Call us: +49 30 206-1444-8
Berlin: Nurnberger Str., 9-11
Leipzig: Dresdner Str., 1
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in Germany
After I have bought commercial real estate in Germany, how can I set up property management without having to do it myself?
In Germany, real estate management is conducted by specialised managing companies. We select several companies for our clients to choose from, including our own. On average, property management in Germany costs 16-20 euro per apartment per month, which means that management of a building containing six apartments will cost 100-120 euro per month for the entire building. If the tenant is a legal entity, the cost of management will be 5% of its ongoing rent payment.

I have heard that it is possible to buy German real estate at a very low price at auction. Is this true?
Property in Germany can indeed be purchased at public or at court auctions for a forced sale. However, as they say, “There's no such thing as a free lunch.” Professional support is necessary to close this kind of deal, the buyer’s time is strictly limited, it is not always possible to inspect the property in advance, and often the quality of this property leaves much to be desired. Buildings at auctions are often in need of capital repair or have other problems. A better option is to buy real estate before auction. Upon reaching agreement with a bank or bankruptcy assets administrator, you can purchase a very high-quality facility at a discount of 60-70%. Only a specialised, licensed, German real estate agency can collect information about this kind of property in Germany. It can then negotiate with banks and vendors, arrange, and successfully conduct a transaction. Our company operates in this particular sphere.

Do I need to set up a company in order to buy and register property in Germany?
German legislation is unique in that non-residents (foreigners) who buy property in Germany have rights that are equal to those enjoyed by German citizens. Property in Germany can be registered to a private person; to do this, all you need is your passport and money for your purchase! Registering property to a legal body is a good investment for tax burden optimisation purposes if it is a commercial facility, provided that the facility brings in returns.

What should I expect my expenditures to be when I buy property in Germany?
A transaction notarisation will cost 1-1.5% of the purchase price except in Berlin, where the price for notarisation is 2.5% of the purchase price. The invoice for purchase tax payment will be sent to the buyer within one to three months. This ranges from 3.5% to 5% of the transaction amount depending on the region where the property is located. After the notarisation, the broker’s commission must be paid; this is called “provision” or “brokerage” in Germany. The amount of the commission depends on the region where the broker is located: in Berlin, it is 6%; in Saxony, it is 6%; in Bavaria and Baden-Wuerttemberg, it is 3%.
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