If you’re looking to buy property in Berlin, you’ve probably heard of Hausgeld, which is a monthly fee that you’ll pay, even after you have purchased an apartment. So, let’s start with that.
What is Hausgeld?
In addition to the conventional service charges, such as heating and water, there are also costs for management and maintenance of your Berlin property. Together they make up the housekeeping fee (or Hausgeld in German), which apartment owners pay into a common pot for their block.
I looked at many apartments in Berlin myself (mainly Altbau) during my property search and, from my experience, the Hausgeld will be somewhere between €150 and €400 per month, depending on the size of the apartment, age of the building, how many other units are in the building etc. Not too bad compared to the rents in Berlin these days!
These are the costs for the Hausverwaltung, which means property management. In an apartment block in Berlin, for example, expect a monthly cost of around €50 per unit.
Apartment blocks form reserves in preparation for any future maintenance and refurbishment work. Often there is a dispute about how high such a reserve should be (surprise, surprise).
For social housing, there are legal regulations on this amount. For instance, for buildings up to 22 years old, up to €7.10 per sqm and year must be set aside. And for houses up to 32 years old, the maximum is €9. For even older buildings it’s €11.50, so the older the building, the higher the maintenance reserve (usually). However, if there is an elevator, which is more common in new builds, the amount increases by €1 per square meter and year.
Usually, more apartments in a block mean a lower monthly maintenance fee per unit, because the costs are shared between more units. Therefore, a higher fee will occur if you buy a large apartment in a block with only 6 units.
Unexpected housing expenses
Unexpected costs can occur over time in many different ways. These can range from necessary repairs and renovations to a rise in your mortgage interest. Let’s take a look at these examples.
Repairs & Renovations
Renovations or repairs are the responsibility of the owner. The tenant does not have to contribute to the costs. The Hausverwaltung should collect sufficient maintenance reserves before any planned refurbishments occur in your block (in the form of Hausgeld).
There may also be unplanned costs that are not covered by insurance, such as repairs due to damage caused by natural events. Or costs that an owner cannot influence or plan. For example, the municipality renovates the road and demands a proportionate development contribution. Or the pipe leading to the sewer is leaking and needs to be rehabilitated.
Interest and repayment for a mortgage loan:
The costs of a mortgage are borne by the owner alone. If your interest rates go up after the fixed interest period has expired, you cannot pass these costs on to a tenant.
For instance, if you take out €100,000 in a mortgage with a 2% interest rate, the monthly payment is €333. After 10 years, the remaining debt will be about €78,000. If the interest rate then rises to 8% on the remaining €78,000, the new monthly payment will nearly double to €600.
Consider making regular special payments as much as financially possible to reduce the risk of rising interest rates. Many banks offer the option to pay up to 5% of the original loan per year.
Should I rent or buy a property in Berlin?
The running costs for maintaining a property in Berlin are slightly higher for owners than for tenants. But banks are providing such low-interest rates on mortgages at the moment, so it’s a good idea to take advantage of that. Most mortgages have a guaranteed rate of just 1% interest for at least 10 years.
When the apartment is paid off, you can enjoy the profit of a good investment in one of the most exciting cities on the planet.