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A flat that cost 500-600K in Berlin would be rented out at 1000€ a month, that can’t increase more than the rent control allows. A mortgage would cost 3 times a

by mmarq 3y ago

A flat that cost 500-600K in Berlin would be rented out at 1000€ a month, that can’t increase more than the rent control allows. A mortgage would cost 3 times as much. So you’d be better off renting and investing the deposit, the stamp duty, notary costs and the 2000€ you save each month in government bonds.

lossolo 3y ago
Are you sure about these numbers? As ROI doesn't make any sense to me in context of the new investments built solely for rent. How does it work?
- mmarq 3y ago
  If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere. In the UK it may still be profitable because you can evict tenants for the lulz, so they have to accept that properties are not maintained and that children may die of mould. We would be all better off if people invested in the stock market instead of “investing” in properties (including landlords)
  - lossolo 3y ago
    > If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere. Then, who builds the new apartments that people rent? If 50% of people in Germany rent and there is no ROI from building for rent, then who finances the new buildings??
    - mmarq 3y ago
      I don’t know, maybe local authorities build them or probably new apartments are exempt from rent controls. But even in London, where my neighbour pays £3500K a month to rent a 65sqm flat, the landlord is earning much less than they would if they invested in the stock market. And they would be actually losing money if they carried out repairs, instead of having their tenant living like a rat.
- ameister14 3y ago
  average cost for an apartment in Berlin is apparently around 5.100/m2 and rent is around 11/m2, so back of the napkin math pretty much checks out
- cko 3y ago
  Yes, check Numbeo for Berlin, Frankfurt, etc. Then look at the tier 1 and 2 cities in China. https://www.numbeo.com/property-investment/rankings.jsp https://www.numbeo.com/property-investment/rankings.jsp The ROI absolutely does not make sense but it's real. A large portion of the world believe that the only two investment classes are real estate and government bonds.

by mmarq 3y ago

lossolo 3y ago

Are you sure about these numbers? As ROI doesn't make any sense to me in context of the new investments built solely for rent. How does it work?

mmarq 3y ago
If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere. In the UK it may still be profitable because you can evict tenants for the lulz, so they have to accept that properties are not maintained and that children may die of mould. We would be all better off if people invested in the stock market instead of “investing” in properties (including landlords)
- lossolo 3y ago
  > If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere. Then, who builds the new apartments that people rent? If 50% of people in Germany rent and there is no ROI from building for rent, then who finances the new buildings??
  - mmarq 3y ago
    I don’t know, maybe local authorities build them or probably new apartments are exempt from rent controls. But even in London, where my neighbour pays £3500K a month to rent a 65sqm flat, the landlord is earning much less than they would if they invested in the stock market. And they would be actually losing money if they carried out repairs, instead of having their tenant living like a rat.
ameister14 3y ago
average cost for an apartment in Berlin is apparently around 5.100/m2 and rent is around 11/m2, so back of the napkin math pretty much checks out
cko 3y ago
Yes, check Numbeo for Berlin, Frankfurt, etc. Then look at the tier 1 and 2 cities in China. https://www.numbeo.com/property-investment/rankings.jsp https://www.numbeo.com/property-investment/rankings.jsp The ROI absolutely does not make sense but it's real. A large portion of the world believe that the only two investment classes are real estate and government bonds.