Investment Property in Munich

Investment Real Estate in Munich

Munich property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Munich .

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Search Map of Munich Investment Real Estate

Munich ( MEW-nik; German: München [ˈmʏnçn̩] (listen); Bavarian: Minga [ˈmɪŋ(ː)ɐ]) is the capital and most populous city of Bavaria. With a population of 1,558,395 inhabitants as of 31 July 2020, it is the third-largest city in Germany, after Berlin and Hamburg, and thus the largest which does not constitute its own state, as well as the 11th-largest city in the European Union. The city’s metropolitan region is home to 6 million people.

Straddling the banks of the River Isar (a tributary of the Danube) north of the Bavarian Alps, it is the seat of the Bavarian administrative region of Upper Bavaria, while being the most densely populated municipality in Germany (4,500 people per km²). Munich is the second-largest city in the Bavarian dialect area, after the Austrian capital of Vienna.

The city was first mentioned in 1158. Catholic Munich strongly resisted the Reformation and was a political point of divergence during the resulting Thirty Years’ War, but remained physically untouched despite an occupation by the Protestant Swedes. Once Bavaria was established as a sovereign kingdom in 1806, Munich became a major European centre of arts, architecture, culture and science. In 1918, during the German Revolution, the ruling house of Wittelsbach, which had governed Bavaria since 1180, was forced to abdicate in Munich and a short-lived socialist republic was declared. In the 1920s, Munich became home to several political factions, among them the NSDAP. After the Nazis’ rise to power, Munich was declared their “Capital of the Movement”. The city was heavily bombed during World War II, but has restored most of its traditional cityscape. After the end of postwar American occupation in 1949, there was a great increase in population and economic power during the years of Wirtschaftswunder, or “economic miracle”. The city hosted the 1972 Summer Olympics and was one of the host cities of the 1974 and 2006 FIFA World Cups.

Today, Munich is a global centre of art, science, technology, finance, publishing, culture, innovation, education, business, and tourism and enjoys a very high standard and quality of living, reaching first in Germany and third worldwide according to the 2018 Mercer survey, and being rated the world’s most liveable city by the Monocle’s Quality of Life Survey 2018. According to the Globalization and World Rankings Research Institute, Munich is considered an alpha-world city, as of 2015. It is one of the most prosperous and fastest growing cities in Germany.

Munich’s economy is based on high tech, automobiles, the service sector and creative industries, as well as IT, biotechnology, engineering and electronics among many others. The city houses many multinational companies, such as BMW, Siemens, MAN, Linde, Allianz and MunichRE. It is also home to two research universities, a multitude of scientific institutions, and world class technology and science museums like the Deutsches Museum and BMW Museum. Munich’s numerous architectural and cultural attractions, sports events, exhibitions and its annual Oktoberfest attract considerable tourism. The city is home to more than 530,000 people of foreign background, making up 37.7% of its population.

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The financial stability of Munich has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.

Buy to Rent in Munich

Renting out your Munich buy-to-rent investment property can grow wealth and income.

Whatever your goals with investment property in Munich are – preparation is key.

Set goals based on how much rental yield will be required and the local rental yield rates in Munich and be prepared to change your initial outlook.
Thoroughly research the Munich location with a special emphasis on fringe areas outside the main Munich metropolis that may be valued lower than their better-known neighbors. Rental yields of around 5% are still attainable in certain areas of Munich.
Ensure that your target investment property in Munich appeals to professionals. This is a demographic that ensures maximum income and low voids.
Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
You may think that managing your Munich properties yourself is an easy option, but are these savings justifiable when you run into Munich red tape? Physis Realty Munich office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Munich buy-to-rent sector.

With our expert guidance, investing in Munich provides the secure knowledge that your money is working harder than it would in a local Munich bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Munich, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Munich property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Munich

Flipping property in Munich

Flipping property is when we advise clients to buy a Munich property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Munich market has a time to react to the renovation.

The Flipping Strategy in Munich

Investment property flipping in Munich is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Munich real estate investments are sometimes referred to by professionals as ‘distressed’ Munich real estate.

What is distressed Munich property:

Munich property in need of renovation
Munich real estate with a change of purpose and use
Oversold Munich property
Bank repossessions in Munich

Put simply, long term investors in Munich purchase the property, renovate it and make it a lot more attractive to potential buyers.

Calculate profit that you make from Munich investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Munich property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

Experienced property developers in Munich use a minimum profit value of 22% when looking at potential Munich projects. The reason for this is because there are lots that can go wrong in Munich property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Munich

For luxury property investors hoping to add a superb property in Munich to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Munich, Physis Realty caters particularly to high net-worth individuals and families. A luxury real estate investment in Munich should be entrusted to only the highest-quality agency.

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