Germany’s historic listed buildings are beautiful and often situated in delightful cities – but the big attraction for the UK investor is the generous tax-breaks.
These historic buildings are often in bad repair and unsuited for modern life, hence the tax-breaks to attract developers prepared to restore and renovate the apartment blocks. Because the German property market is significantly undervalued compared with the UK market these historic homes in need of TLC can be bought for bargain basement prices.
Renovation is expensive but over eight years the renovation cost is returned to the investor in the form of tax-breaks. Andreas Schrobback, managing director of As Unternehmensgruppe, a company employing 120 people including a construction team, that develops, sells and manages homes for capital investment. Over the past 10 years he has restored and sold more than 1,500 homes.
Herr Schrobback recently visited London to assess the local property market and build contacts. He is opening the German market in historic homes to the UK investor, particularly those who think recent tax changes have made buy-to-let in England unappealing. His company operates throughout Germany but particularly in scenic cities like Leipzig – acquiring property, renovating it, marketing and then letting the apartments.
Investors who can raise a mortgage for at least 250,000 Euros come in on the ground floor when the property is bought. After 18 months when the construction work has been completed and the apartment let, they can expect an annual return of about 3.5 per cent after expenses. Herr Schrobback says: “The German property market is very solid and Germany has stable legal and political systems. This is a unique property investment where the investor can write down 80 per cent of the price of renovation over the years.”
For those who have been buy-to-let investors in the UK and are used to endless problems involving tenants, paperwork, letting agents and tax returns, one of the appeals of the scheme is that all the work from planning permission, construction, legal requirements, finding tenants and dealing with the authorities is taken out of their hands. Herr Schrobback adds: “We are one of the market leaders in the rented social housing sector for private as well as institutional and capital investors. For over 13 years the company has been an experienced partner for profitable investments with long-term stability.”
He reckons that as Brexit nears the uncertainty will make British investors keen to put their money into well-managed property schemes in well-regulated countries like Germany because buying property in Germany is a safe investment allowing investors to generate assets in a risk-free way. The German legal system gives all buyers – including those from the UK – secure title to ownership through its land registry system.
And although prices are low compared to London, Paris or New York, the German property market has had its own property boom, seeing huge increases in property values and rents in recent years – particularly near city centres. And these increases are expected to continue. German tenants are also reassuringly different to those in many other countries. There is much less focus on home ownership and tenants often live in the same apartment for 10 or even 20 years.
Visit www.unternehmensgruppe-as-english.com to find out more.