Take advantage of this booming market.
Are you ready to make the leap of living abroad in a popular European destination? Or maybe you just want to make a smart offshore investment. One of the best offshore investments you can make today is in foreign real estate. More specifically, German real estate is an ever-growing market that investors have been taking advantage of for years. With high demand and a healthy economy, this nation is a top destination for buyers, whether it’s for personal use or financial gains.
If you are ready for this promising investment, continue reading to learn what is causing everyone to buy German real estate.
Why Invest in Foreign Real Estate?
Before we take a look into the growing market in Germany, let us look at the advantages of making an investment in foreign real estate.
One of the biggest draws to buying international real estate is the diversification. According to Modern Portfolio Theory, diversification is one of the cornerstones of a successful portfolio. In fact, diverse portfolios outperform a concentrated one. By owning a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular asset.
Another factor that attracts investors to foreign real estate is the opportunity to expand international options. Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. In rare cases, immediate citizenship is offered after a high enough investment in real estate. This is especially attractive for those looking to expatriate or those who want to earn a second passport in order to extend the amount of visa-free travel that is possible. This can play a key role in offshore retirement or years of stress-free travel.
There are also a lot of tax benefits that come with investing in real estate offshore. In fact, it is one of the few ways that an American can legally keep some of their money offshore privately. When real estate is held directly in an investor’s name, as opposed to in a trust or LLC, the investment is not reportable.
One of the most important (if not THE most important) reasons investors choose to buy real estate internationally is to save their wealth abroad. By owning foreign real estate, an investor can keep their money outside of the reach of their local government. There are also greater returns in the real estate markets of other countries.
Investing in Germany
Why should you choose Germany?
There are numerous reasons why investing in the German real estate market is a good idea. For one, it’s the biggest economy in Europe. Germany was almost unaffected by the housing crash that hit most of Europe in the 2000s, making an investment in property a stable investment idea. A recent interest in people buying property has caused an increase in prices with a 5.8% increase in 2015 and 8% increase in 2016. The market is mostly affected by local forces like availability of housing stock and changing demographics.
Today, metropolitan German real estate is thriving. This real estate cycle, which began in 2009, has brought upon a rise in prices in residential properties in popular cities throughout the country. The growing real estate market is paired with strong population and employment growth as well as declining unemployment. In 2017, employment went up roughly 4% in Berlin.
Since construction rates are low, there is a lot of data showing that demand is high and supply is not able to catch up. In fact, in the popular city of Munich, there’s a vacancy rate of nearly zero. Other cities to note with high demand are Hamburg, Dusseldorf, Stuttgart, and Frankfurt.
How to Buy German Real Estate
As you can see above, real estate in Germany is a great investment idea right now. Mortgage rates are low and demand is high but rates are predicted to rise so, buy now. Like many European countries, there are no special requirements or restrictions for foreigners interested in buying property in Germany.
The best way to find a home or apartment is not to drive around searching for “for sale” signs. That’s not common practice in this country. This is where we come in, Alpen Partners will look through the vast number real of estate listing. We consult our clients based on property information and financing options.
Like other European nations, German homes are usually smaller than North American properties, with only 1/9th the living space in the home compared to US houses. Prices, however, are much higher. The structure of the house is high in quality and contractors must follow strict building codes.
Your wealth is important. If you are serious about your life goals, financial planning and investments are probably important to you. Financial planning can involve many steps from tax optimization to asset protection. Different investments have different rules with different returns.
With the help of financial planning, you will be able to predict where you will be in the years to come by evaluating where you are currently, what sources of income you plan to have in the future, investments you plan to make, and your retirement plans.
Alpen Partners Wealth Management International AG, the sister company of Alpen Partners AG, is now a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident and non-resident.
Alpen Partners can assist in your real estate investment in any country you wish. We can guide you every step of the way, from choosing the country, a bank to finance the investment, and beyond.
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