Investment Model

German City Buy-to-let

Germany, as the largest economy in Europe, clearly has a lot to offer. It has a stable, strong property market, characterised by long term tenancies in the rental market, where rental demand outweighs owner-occupier numbers.

Investing in property in its major cities, offers a great way to invest in the medium to long term and get stable rental returns. Take a look at what's on offer in cities like Berlin

Property-backed Bond

Are you anxious about the repercussions of the Brexit decision on the property market in the UK?

Do you still want to make decent returns, or provide in some way financially, for your children?

And still want exposure to a European, large-scale, stable, economy which is well-regulated from both a legal and banking perspective?

Then consider this....

A property-backed Loan Note or ‘Bond’ is an unregulated investment, but introduced to clients in a regulated way.

For those interested in this type of investment, you in effect lend money to a developer, which is used to secure the purchase of developments quickly, given bank finance can take several months to secure on a project-by-project basis. These projects offer you (the lender) a registered First Legal Charge on the underlying property asset. This product is operated on a seggregated account, or 'escrow'-type account basis, providing added reassurance.

What’s the attraction of this type of model?

Clearly the returns - which can be double digits for the investor - offer an attractive alternative in a low interest environment.

What's more, knowing the fundamentals of the business model is a big help too.

Tax incentive plays a strong role. As a way to address the country’s housing shortage while also making sure buildings of cultural and historical significance were restored, Germany’s post-WWII government introduced a unique tax incentive for high rate tax payers who refurbish a Listed Building. Listed Buildings represent about 1% of the real estate market in Germany and are not subject to quite the same rules and regulations as in other countries like the UK.

Higher rate German tax payers are able to claim back up to 100% of the cost of refurbishment as a tax break. This means that a German property buyer can benefit from tax relief on the properties refurbished and brought to market by the developer, thus generating strong buyer demand locally in Germany, for the developer's refurbished properties.

The other aspect to this is that you are not exposed to currency fluctuations. If you invest in GBP you get returns in GBP. If you invest in Euros you get returns in Euros.

This type of investment is not for everyone, but if you are interested put your e-mail in the box below and we will get in touch so that we can follow up with you. Investors need to qualify in order to proceed and we can talk this through at the same time.

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