The German Hot Spots for Yield Properties

One of the first questions new investors always ask is: “Where is the best place to invest in Germany?”

The stable German real estate market has become particularly attractive to global investors in recent years. As a result, more and more of them reach out to us, as navigating the German legal and investment jungle and making the right decision is not an easy task. We regularly analyze the market, but over the years, we’ve learned that there is no golden rule to predict the perfect investment location because our market is vast, very diverse, and constantly changing.

Of course, during your search, you will initially find Germany’s big seven cities – Berlin, Hamburg, Cologne, Düsseldorf, Frankfurt am Main, Stuttgart, and Munich. But those are the cities where anyone who settles for easy solutions invests, instead of seeking out the real and lucrative treasures in the jungle.

Prices Are Rising Not Only in the Big Seven – But Across Germany

Berlin, Hamburg, Cologne, Düsseldorf, Frankfurt am Main, Stuttgart, and Munich – these are the most desirable cities in Germany. But there are three more cities missing for a proper top ten list. And these places are highly contested among experts. In addition to the so-called A-cities, there are more than 73 B- and C-cities, with C-cities having populations of over 100,000 and together representing about one-fifth of the total population, or more than 16 million people.

Prices are also rising in these cities, and investments are more affordable than in the top cities. Of course, investors will receive higher returns there, but they also need more time, and they must start with significantly larger investments.

We always take a look at alternatives, as they combine the advantages of a stable German real estate market with lower prices and attractive returns. Smaller cities, for example, are much less exposed to price fluctuations than large cities. B- and C-cities offer a better risk-return ratio than A-cities, either generating higher returns for similar risks or offering lower risks for similar returns.

The Top 3 Cities for 2018 That You Shouldn’t Overlook

3 candidates that we believe will make it into the top ten list:

1.Leipzig/Halle and Surrounding Areas

In first place, we see the area around Leipzig/Halle, as the economy is growing, and global corporations like DHL, BMW, and Porsche have established themselves there. Leipzig has been a city highly sought after by students for years and is increasingly attracting workers with its youthful vibe.

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2.Dresden/Meißen and Surroundings

This area is characterized by the beauty of its cities and the controversial industries: alongside the booming microelectronics, traditional German companies such as Meissen Porcelain and watchmakers like Jaeger-Le Coultre, Glashütte, Lange & Söhne stand in contrast.

3.Wolfsburg/Hannover and Surroundings

The headquarters of Volkswagen dominates the very strong economy of this area. Complemented by a sophisticated infrastructure through the ICE rail network to Berlin, Hamburg, Frankfurt/Main, or the Cologne/Düsseldorf area, Hannover and its surroundings offer attractive and stable locations for lucrative investments.

This list includes only 3 of the 3000 potential investment opportunities in the German market, where you can best invest your wealth and generate excellent returns. However, this does not work if you throw a dart at the map of Germany and invest blindly. You need to carefully consider property prices, rental income, associated fluctuations, and the future of certain regions. As mentioned before, the real estate market is a very dynamic construct. We use sophisticated data sources to stay in tune with its pulse, allowing us to precisely determine how profitable a location for yield property investments can be, from rental trends and commuter behavior to employment fluctuations.