Germany, in general, has been Europe’s most favored destination for real estate investors.
Any investor seeks an excellent performing field before investing their money, and Germany happens to be a haven. Munich is the fourth favorable real estate investment destination after Berlin, Hamburg, and Frankfurt.
Factoring that Munich has one of the most productive economies in the world, it is understandable why its property is attracting international investors. For instance, nearly EUR 35 billion was invested in Germany’s residential property segment between 2010 and 2015.
Look at it this way: If you have an apartment in Munich and conduct its viewing, the operation will turn into a mass event with 50-60 people ready to sign the lease. In fact, applicants come with detailed information showing their creditworthiness to earn the house.
Where investors have to consider factors such as house prices, education, cost of living, economy, and more, Munich meets all these factors.
Reasons Why You Should Invest In Munich
1. Availability of excellent education
One of the most economically stable cities in Germany is the home to several universities with Nobel laureates. Thus, families looking for the best education all over the world choose universities in Munich factoring the excellent training offered in them.
Considering such world-famous universities attract more students than they can accommodate, some students will have to rent apartments outside the school. That’s where you, as an investor, come in and earn rental yield from your property.
2. Valuable rental yield
A one-bedroom apartment in the city center of Munich is around 1,219.65 € while the price of the same size apartment outside the city center is averagely 898.02 €.
Buying an apartment in the city center would cost you approximately 10,533.33 € and 7,530.00 € per square meter. This means renting a property in Munich can earn you 2.54% to 2.67% rental yield. As the price of the houses continues to increase as demands are low due to the increase in population, the rental yield could rise to desirable 5% to 8% in the coming years.
3. Third world-leading economy
The economy is a broad term, and to mention one side, Germany is the third-largest economy in the USD exchange segment. Among many cities in Germany, Munich has the most robust economy with the lowest unemployment rate. Moreover, it’s the host of headquarter of companies such as Siemens AG, BMW, and other world-famous companies.
Considering a good economy is a factor contributing to investors putting their money somewhere, Munich meets the threshold. Indeed, a stable and positively growing economy means a great real estate marketplace.
4. Good climate
People are now moving from overly crowded cities like New York and other industrial areas with uncomfortable temperatures to a calmer environment. Munich is one of those cities with an admirable climate. To give you a clue, Munich has an oceanic type of atmosphere that could, in the future, attract those moving from crowded and polluted towns.
5. Lifestyle, culture and tourist attraction sites
People love something they can identify with. For instance, people fly to the USA for July forth independence celebration, because the states have a culture that brings them together. Moreover, you get to enjoy the holiday even if you’re not a citizen of the country. Similarly, Munich has its culture, such as the beer festival. In fact, this culture put Germany’s economy leader on top of a list of the most livable places in the world.
Additionally, the city has wealthy museums, natural lakes, and so much more that attracts tourists.
Typically, renting your apartment to vacationers during Oktoberfest can earn you substantial rental yields considering the city is luxurious and attracts those who want to spend their money.
6. Good living costs
A liter of milk in Munich is 0.90EUR, while that of eggs is 2.30EUR. Monthly internet charges are approximately 30EUR. The cost of living in Munich is slightly lower than that of New York and other cities in Europe.
There is a high employment rate, which means residents gain employment in an economically doing well city and can afford an apartment as well as save. This also means, when students are through with school and decide to settle here, they’ll still need accommodation, and that’s where investors come in to provide property. Consequently, demand for houses will continuously increase as long as students keep looking for good universities and a positive economy in Munich.
7. Opportunity to diversify your real estate portfolio
Investors often put money in residential real estate. But, commercial real estate has higher returns, especially in a city like Munich, where world-leading companies are moving into. These companies need offices and business premises, and you can quickly transition from residential real estate to commercial.
Also, considering Munich is highly developed and has little land to develop, you can invest in building a world-class building that will, in return, become a benchmark to other developers, not to mention multiply your ROI.
8. High property sale
The housing market in Germany was extraordinarily stable. However, this changed and has since then been increasing each year. Why? Positive economy, the high population, including refugee immigrants, and low unemployment rate are factors contributing to the increase in the property sale.
Apartment prices have risen by more than 10%, and there is a possibility it will continue to grow.Clearly, buying a property now can earn you a double return in a few years while still receiving rental income before you decide to sell. Also, there is a low construction rate, which translates to the high demand for houses.
9. Good transport and infrastructure
Another reason to invest in Munich is the availability of an extensive transport system that translates to more accessibility to other parts of Germany as well as navigating the city. There are fast trains, buses, trams, underground passages and more. Furthermore, since the infrastructure is good, residents can cycle to work or to attend other things.
10. ICT hub
36 of the 50 most innovative companies in the world have a base in Munich. It’s an economic powerhouse, and this illustrates what Munich is about. Indeed, investing in real estate in Munich is the right call.