The factors that affect the return on investment are not only the overall housing prices and policies, but also the location, type, lease and lease of the investment project itself.
Shops and office buildings in the downtown area often have a high return on investment, but if the location of the store is not hot enough or the lease period is short, it may face an “empty window” when changing tenants. For a well-located home, although there is no high return on investment, it is easier to find tenants, so it is more secure in terms of return time.
Therefore, choosing a multi-family house with shops is a more inclined form of investment for Chinese investors.
So which cities have a greater chance of getting a higher return on investment with less investment?About 60% of rental apartments in Germany are private.
Since Germany implements a private system of land, land and property can be passed on from generation to generation, so many people are willing to choose real estate as a stable investment.
The German economy has been stable for a long time. In recent years, the real estate market, led by Munich, Berlin and Frankfurt, has continued to heat up, and house prices have shown steady growth. Rental housing is in short supply, and rents are rising all the way. At the same time, the German government issued a series of price limit regulations to protect the interests of tenants.
This is a good thing for renters, but for investors, it means that the return on investment may be constrained. In the long run, real estate investment in big cities still has an advantage because of its inaccessible geographical location and appreciation space. But for investors who want to quickly implement cost recovery, some second and third tier cities are better choices.
According to the data provided by Immowelt, it is clear that the return on investment in western and eastern Germany is significantly higher than that in northern and southern Germany. Among them, Chemnitz, Duisburg and Wuppertal topped the list with a return on investment of over 7%.
Chemnitz is the industrial center of eastern Germany and has about 300,000 inhabitants. It is the third largest city in Saxony after Leipzig and Dresden. Both Volkswagen and Siemens have factories here, and Chemnitz University of Technology (TUC) is one of the city's most important educational institutions with more than 10,000 students.
2. Duisburg is an important industrial city in the Ruhr area of western Germany. At the junction of the Ruhr and Rhine rivers, it is one of Germany's heavy industrial centers and has the largest river port in Europe. A large number of automobile and steel companies are established here. The famous Duisburg-Essen University also attracts a large number of students each year, with a permanent population of about 500,000.
Wuppertal is the center of the textile industry in the Ruhr area and was once the most important economic center in Germany, with approximately 350,000 permanent residents. The good infrastructure and the University of Wuppertal attract a large number of students to study, and it is also one of the most densely populated areas of higher education and research institutions.
It is not difficult to find that these regions with high ROI have common characteristics: second and third tier cities, sound infrastructure, good industrial base, large population base and high quality universities that attract students as renters.
Although these three cities have a high average return on investment, all investments are accompanied by risks. You need to fully understand the local situation when selecting investment projects and configuring your portfolio, and carefully estimate future earnings.
Dominart Invest has been engaged in real estate investments in Germany for more than 10 years. Our experience with the market and knowledge of the specifics of German real estate allows us to provide clients with the most favorable conditions for the purchase and rental of apartments and houses throughout the country.
If you are considering options for investing in real estate in Germany,
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