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REALINVEST Berlin

REALINVEST LTD 20 Broadwick Street London W1F 8HT United Kingdom phone 020 7851 4456 fax 020 7117 1282


WHO WE ARE Realinvest is an established UK property company founded more than 10 year ago. One of Realinvest's directors lived 22 years in Berlin, therefore for the company it was easy to spot the opportunity developing in Berlin real estate far ahead of the market. We began to work in the Berlin property market in 2005 and now after a few years - we can evaluate actual results in terms of capital appreciations, yields and sustainability of our letting investments in Berlin. We provide turn/key solutions for the overseas investor who want to profit from the excellent returns of the Berlin property market. We assist our Clients throughout the whole buying process. Our service starts with the careful evaluation of the Clients’ strategic priorities and then searching the right property, contributing to secure advantageous mortgage conditions, and - with the assistance of local professionals - creating the most tax efficient setup, helping Clients through the legal buying process. Our assistance continues after the purchase, instructing a good long term (or short term) managing company, letting agents, taking care of property improvements, refurbishing, furnishing etc. It is essential for us our Clients feel safe and well advised, while investing their money abroad.


12 REASONS WHY BERLIN IS INSUPERABLE, ESPECIALLY IN THE CURRENT ECONOMIC CLIMATE

• Investment that offers the protection and security of EU legislation, while offering excellent returns

• A favorable combination of low construction activity and growing population (chart 1)

• Potential for capital growth due to German recent history of unification, since Home ownership levels at 15% in Berlin (average 44% in Germany)

• A concrete protection against a Euro breakup • Price per square meter often under 2,000 Euro, normally below construction cost

• 5-6% gross rental returns in prime ares: an indication for safe investment • Excellent mortgage potential to leverage your investment at low interest rates

• The best international media consider the german property market undervalued (chart 2)

• You are investing in Europe's large stand strongest economy capital (chart 3)

• Private equity giants such as Goldman Sachs, Morgan Stanley and George Soros have bought billions of Euros of property in Berlin

• Berlin is one of the greenest cities in Europe with 33% covered by parks, lakes and forest

• Exceptional letting values potential. Rent paid percentage to average Germans’ disposable income tends to be very favorable to growth (from media August 2012 - German IW: in Berlin around 23%, London around 40%) (chart 4-5)


Chart 1: A favorable combination of low construction

Chart 2: The best international media consider

activity and growing population

the german property market undervalued

Chart 3: You are investing in Europe's large stand strongest economy capital

Charts 4-5: Exceptional letting values potential. Rent paid percentage to average Germans’ disposable income tends to be very favorable to growth (from media August 2012 - German IW: in Berlin around 23%, London around 40%)


TRANSACTION COSTS AND TAX ✦ Property acquisition tax 4.5% ✦ Land Registry 0,6-1% ✦ Notary Fee 1-1,5% ✦ Estate agent fee 6% ✦ Management company 5-6% of rental income per year ✦ Local accountant fee in the region of 3,000 Euro per year ✦ Letting agents (normally paid by tenants) ✦ No capital gain after 10 year, if bought in personal name or partnership ✦ Income tax in the region of 27%, mortgage interest deductible as well as other expenses


CASE STUDY, A 2,200 SQ METERS BUILDING IN PRENZLAUER BERG, BERLIN

• Purchase price Euro 3,160.000 • Equity needed in the region of 1.5 ml Euro, subject to financing • The building is formed by 31 residential units and 2 commercial units Total square meters around 2,268 Euro at circa 1,393 per square meter Current letting income Euro 165,000 per year, with potential to raise to around 170,000

• Property build in 1900 and refurbished in 1991/1992 • Quiet street at 3 minutes walking to the tube • This property is at about 800 meters to Helmholzplatz, one of the most sought after areas in Berlin

• Current letting yield in excess of 5%, potential around 6%


WHY REALINVEST SAVE YOU MORE THAN MONEY

• Thanks to our local knowledge you will be able to understand well prices and values. Locations in Berlin can change from street to street, Prenzlauer Berg and Charlottenburg offer among the best and some of the worst locations of the city. Berlin is a capital, you need to know it well to take the right decisions.

• Berlin estate agents tend to take advantage of the foreigners’ lack of knowledge, proposing to them less interesting opportunities, otherwise difficult to sell.

• We act exclusively on your behalf since we are not estate agents but your searching agents. • German banks can be concerned with foreigner investors. Our introduction to the bank tends to increase trust that even though foreign you are buying the right property, you would end up gaining more favorable terms.

• You need knowledge of the german law system to take the right decision because much depends on the rental potential of buildings and Germany has strict rental rules.

• When you pay less than 2,000 Euro per square meter you need to know what you are buying. Unexpected refurbishing works can create relevant costs compared to the property value. Realinvest has been active in London, France, Monaco, Italy and of course Berlin, building up a solid developer experience that most searching agents do not have.

• In most cases there are no additional fees for purchasing through Realinvest as we share fees with agents and also have direct contacts to sellers.

• You can save a lot of money - and often more than money - by choosing the right corporate/legal setup. • We live from word of mouth and have a reputation to loose. This gives you the security that our advice will always be honest and well researched.

REALINVEST FEE STRUCTURE

✦ Property search fee 0-2% above 1 ml (depending on introduction from estate agents) ✦ Mortgage search fee 0.50% above 1 ml ✦ Company setting up and professionals. Management fee Euro 7,500


REALINVEST LTD 20 Broadwick Street London W1F 8HT United Kingdom phone 020 7851 4456 fax 020 7117 1282 l.catalano@realinvest.co.uk

Realinvest and Berlin  

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