Real estate in Berlin

Real estate in Berlin

Berlin offerings include real estate agents
Real estate agents available in Berlin
The real estate agents in Berlin are many and they will guide you to the best they can. Berlin being the most awesome city of Germany has many great options for its people to live, buys, invest, enjoy and dream. This is what Berlin is ready to give and you must be taking it in a very positive way. The real estate agents are there to help you buy the properties of berlin and of course to sell it even. Wherever you have to buy some property or check for sites, there are number available for real estate agents, you can just call them up and they will be there to help you. Real estate agents in berlin are important because there is so much of the property in Berlin which needs to be reconstructed, sold, bought and renovated that everything is going on very fast. So these real estate agents are always updated and they have fresh and detailed information sometimes.

Property Berlin
Important real estate agents
Some of the people require detailed information and some require to the point. Both types of information can be taken from the real estate agents. The real estate agents are different for different sites and of course there rates will be different too. But some of the properties will almost have the similar rates. This is all your choice that from which real estate agent you get the better rates and you both parties have the better communication. The real estate agent always listens to your demands and then is ready to show you sites. There are so many beautiful sites in Berlin that sometimes it gets very difficult to choose even for the real estate agent himself, that which one to show first. This is what Berlin is ready to give you and that includes comfort, ease and joy. You can also choose the real estate agents property berlin according to your financial position because of course they are showing you something which is beneficial for you and they are soaring some important time of their life for you and visiting different places with you, they require a good amount of money. Some of the real estate agents take advance and then work and some do not. This depends upon the nature of property too and the size of property too. You can first define your boundaries with the real estate agent and then even work with him freely and comfortably. This is the very best way in which both the sides are easy and comfortable.

Berlin Real Estate

Berlin Real Estate

International real estate investors as well as German real estate investors are permanently facing the issue of getting value for money from their real estate management.

Which is the right fee level that does not absorb high proportions of the rental income but enables the real estate manager to provide the right service level required? How should the fee be calculated? What is the going market rate? What is included and what is extra? This article will give an overview of the rates an investor has to be prepared for and some existing fee models.

Every real estate investment needs a real estate management that is right for the real estate, right for the investor and right for the budget available. The requirements regarding qualification and quality are not discussed in this article and will be addressed in an upcoming publication. I will provide some examples fee payment models and then provide a fee span for the going rate for each model and an evaluation from the investor's viewpoint.

Fixed rate model

In the fixed rate model the real estate management fee is based on the number of units no matter whether rented or not. There is no relation to performance of the real estate manager or even the performance of the real estate. In other words you still pay the full fee, even if half the tenants move out. A variation on the theme is a slightly reduced fee for vacant units. Quite often this model does not differentiate between residential real estate units and commercial real estate like retail or office. It is only used when the commercial real estate has a relatively small share of the total investment.

The going rate in Berlin is somewhere between 14.00 EUR and 20.00 EUR per unit per month plus VAT (!) which is currently at 19%. The reduction for vacant units would be somewhere between 2.00 EUR and 4.00 EUR if it is offered.

The service provided by the real estate managers with this type of fee model seems to correlate with a quite basic service level. It is a preferred model used by small one man band or so called kitchen table managements working in a semi-professional manner.

Percentage model

At the first glance this seems straight forward and fair but it depends very much on the parameter the percentage is applied to. Let me show you some variations on the fee model:

gross contract rent including heating and ancillary cost -- Soll-Bruttowarmmiete;
gross contract rent cold (excluding heating) -- Soll-Bruttokaltmiete;
gross actual rent including heating and ancillary cost -- Ist-Bruttowarmmeiete;
gross actual rent cold (excluding heating) -- Ist-Bruttokaltmiete;
net contract rent -- Soll-Nettomiete;
net actual rent -- Ist-Nettomiete.

There are many more iterations possible but these are the most common ones. Again there will be VAT at the current rate of 19% added to the fee.
So if you are discussing real estate management fees and someone boasts that he is only paying 3.5% management fee what does that tell you? Right! It tells you almost nothing, only that they are using a percentage model.

Only the last option mentioned above really ties the fee a real estate manager receives to the rental income he helps to raise as a performance measurement. It is also the only model providing an incentive to not only sign nice rental contracts but to make sure the money is coming in every month. There are constellations like a renovation period when this fee-model would not be fair and another approach could be required that should be limited to the time of the exception.
Taking the just said into account it is a complex task to provide a guideline on going rates. There are guideline tables available but most are influenced by real estate managers associations. Also the size of a real estate or the fact that there is a portfolio with a single owner and one type of reporting will influence the fee calculation.

For a single apartment building with 20 to 40 apartments you should be able to get a decent management with simple reporting and bookkeeping for a rate of 4.5 to 5.5 % of the net actual rent. It will be some negotiation but is achievable. If you need balance sheet bookkeeping because you have a legal entity like a GmbH as owner it will be more to the upper end of the fee span.

A mix of fixed rate model for the residential units of a real estate and percentage model for the commercial part are quite widely spread in real estate in berlin since many of the inner city apartment blocks will have some retail units on the ground floor and some other commercial units on the first floor while especially side wings and rear buildings will be predominantly residential.

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