Telephone: +44 (0)20 8315 7517 Email: info@buyhamburg.co.uk Fax: +44 (0)20 8315 7520
Properties in Hamburg from the Hamburg property experts
Your Questions Answered
What costs are associated with a Hamburg property purchase?
Who manages the Hamburg property?
What are the ongoing running costs?
What is the position on getting finance in Germany?
What rental return can I expect?
Tenants rights and how do rents increase?
What costs are associated with a Hamburg property purchase?
In Germany it is the buyer that pays the estate agent fees and not the seller as it is in the United Kingdom and also the agents fees are a great deal more than that in the UK: normally up to 6%. When you take into account the notary fees and stamp duty you are looking at fees adding up to approximately 11%.
Buy Hamburg are sourcing properties directly from Developers in order to eliminate Estate Agent fees and reduce costs.
Who manages the Hamburg property?
Germany has a well developed letting system with many letting management professionals this makes the opportunity of making a Hamburg buy to let investment a viable option. A Management company should be engaged to run your german property purchase. This company would do complete management including collecting rents, installing new tenants, preparing annual accounts etc. The charge for this service may vary but typically would be €15-20 per apartment per month. Typically we will have arranged this for you.
What are the ongoing running costs?
In addition to the 15 – 20 euro management fee , you need to allow a monthly maintenance charge of around 5% of your buy to let rent.
What is the position about getting finance in Germany?
Hamburg Banks are more relaxed than their counterparts in Berlin, and typically would look to finance apartments with purchase prices as low as €39,000. Mortgages of between 60%-70% are normally fairly easy to secure due to the very strong Hamburg rental market. With our German brokers we are able to assist our clients throughout the mortgage
What rental return can I expect?
This varies region to region. On blocks of apartments cheaper areas of Hamburg have yields as high as 8 to 10%. More affluent areas around 6-8%. On individual apartments the yields fall to a range of 5-8% dependent on location and state of the property.
Tenants rights and how do rents increase?
Hamburg investment is a great investment but it is important you understand the legal framework you are buying in. There are few legal provisions regarding the level of rent a landlord can ask from the tenant, although there are rent ceilings on many properties so it is necessary to check in advance what level of rent is applicable to your particular property, if any. You will also often find that rent cannot be increased beyond certain set limits - the most common limits are 20 per cent over a three-year period and no more than one increase every 15 months.
The landlord is generally allowed to increase rent within the legal and contractual limitations set out in the rental contract. As a general rule, an increase in rent is possible after modernisation or refurbishment which is deemed to have increased the standard of the accommodation, or if the current rent has not reached the level set out in the official rental tables.
These tables are based on a representative cross section of local residential lettings, taking into account the year of construction, the size and the features of the property. Besides legal limitations on rental increases, the level of rent can be restricted by contract. If landlord and tenant agree to a lease with pre-defined rent increases then the legal increases may be circumvented. Increasing the rent level is forbidden in any case where the landlord has financed refurbishment of the property using subsidised loans provided by the local authority. Such loans are provided with the intention of making housing socially affordable and the permissible maximum rent is therefore fixed at that stated in the rental table.
This restriction does not cease when a property is sold but passes onto the new owner until the contractually established period for controlling of the rent ends. This limitation does not apply if a tenant agrees to a higher rent voluntarily, or in the case of a voluntary vacation where the standing tenant moves out and a new lease is initiated. A landlord has the right to termination without notice if the tenant is in default with rental payments or uses the property in a manner contrary to the terms of the lease.
The tenant can usually terminate a lease by offering three months notice or if there are court approved reasons for doing so. Unlike Ireland and Britain, German residential leases are generally agreed for an indefinite period of time - Germans tend to rent apartments with a long-term outlook. The lengths of commercial leases generally vary between three and ten years with options to renew the lease for further years similar to those operational in Ireland.
A tenant will generally be liable for damages caused to the landlord's property. The deposit paid secures the landlord in such a case but obviously only up to the level of the deposit - beyond this you are looking at court proceedings to recover your losses. The legal fees depend, as in most other areas, on the amount in dispute. To ensure access to the tenant, even after vacating the property, you are well advised to check their identity in advance - you are allowed to take a copy of their identity card before signing the contract. When it comes to evicting a tenant, the time taken between filing an action for possession and receiving a judgment is between six and nine months on average. To have the eviction carried out by a bailiff will take a further two to three months. On top of this the fee for an eviction ranges between €2,000 and €4,000 which must be advanced by the landlord.
Legal Disclaimer: Although we have taken reasonable care to ensure that the information on this site is correct, we take no liability for the contents of this website. In addition, we are not liable for the contents of external pages linked to our web site. We recommend that professional advice is taken on any property transaction.
