Note: The following article is for general guidance only. For binding advice, we strongly recommend that you consult an expert. We will be happy to put you in touch with the right experts in our region.
Investing in property is often seen as a safe and worthwhile form of investment. However, as with any investment, there are risks and challenges that investors should be aware of. With the right planning and a strategic view of opportunities, these challenges can not only be overcome, but even turned into advantages.
1. high entry costs
Buying a property involves considerable initial costs. In addition to the purchase price, there are other ancillary costs:
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Real estate transfer taxDepending on the federal state, between 3.5 % and 6.5 % of the purchase price.
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Notary fees and land register entryApproximately 1.5 % of the purchase price.
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Broker commissionBetween 3 % and 7 % of the purchase price, depending on the region.
Strategic approach: In the long term, property in growing regions such as Berlin and Brandenburg offer considerable potential for value appreciation. Property prices in Berlin doubled between 2010 and 2025, with new construction projects in districts such as Pankow and Lichtenberg continuing to generate high demand. With a well-calculated financing plan that combines equity and debt financing, investors can also manage high entry costs.
2. vacancy risk
Without tenants, your property will not generate any income, while you will still have to bear running costs. It can be particularly difficult to find suitable tenants in regions with low demand.
Strategic approach: In Berlin, residential properties in central districts such as Mitte, Kreuzberg and Prenzlauer Berg are almost immune to vacancies due to high demand. Rents are also rising in up-and-coming peripheral locations such as Spandau or Treptow-Köpenick, which promises stable income. An attractive property design, for example through modernisation or energy-efficient refurbishment, increases rentability.
3. market volatility
Property prices can fluctuate due to economic, political or regional developments. This volatility can affect the value of your property and your return.
Strategic approach: Despite economic uncertainties, there is a stable trend towards rising property values in Berlin and Brandenburg, particularly for new builds and energy-efficient refurbished properties. Areas such as Potsdam and the Berlin suburbs are benefiting from the high demand for living space and well-developed infrastructure. A well-founded market analysis and the selection of future-proof locations can cushion volatility.
You can find more information on this at:
The Berlin property market in 2024: facts, background and outlook
4. high administrative costs
Property requires time and commitment. From finding tenants to maintenance and billing service charges - these tasks can be extensive.
Strategic approach: Professional property management can significantly reduce the administrative burden. Especially in Berlin, where many service providers specialise in the management of residential and commercial properties, investors benefit from a wide range of services. Alternatively, digital tools such as platforms for tenant communication and document management make organisation easier and save time.
5 Financing and interest rate risks
Most investors finance property with loans. A change in interest rates can have a significant impact on your monthly instalments and the total cost of the investment.
Strategic approach: With a solid equity base and a long-term fixed interest rate, you create planning security. The current interest rate trend in 2025 shows that construction interest rates are stabilising again after a rise in previous years. In Brandenburg in particular, local banks and subsidy programmes offer favourable conditions for investing in energy-efficient properties.
Conclusion
Property will remain one of the most attractive capital investments in 2025, especially in dynamic regions such as Berlin and Brandenburg. Challenges such as high entry costs or vacancies can be overcome through strategic planning and well-founded decisions. By choosing the right location, professional management and sound financing, you create the basis for a successful long-term investment.
Take advantage of our expertise and let us advise you individually so that you can make the best choice for your property and benefit from the positive market development.
