Buying a home abroad is an important event in the life of every investor. But after the deal is concluded, the hassle of the new owner will not diminish. On the contrary, from now on he will have to take care of his purchase, taking into account local laws and regulations. This is where it comes in handy to have a personal representative in place, who will save you from the hassle of taking over the property and help you get the most out of renting it out to tenants. Anyone who intends to purchase a certain amount of square meters here needs to study the principles on which property management in Germany is based.
Trust management: what is hidden behind the concept
A term such as "trust" is used in certain circles in most of the countries of the world. In any case, the legislation of developed countries will certainly operate with it when it comes to transferring part of the rights of the owner of immovable property to another person. Most often, the range of these rights applies to all actions with it, with the exception of the alienation procedure. The authorized person is not endowed with such powers.
The need for management arises due to the fact that a foreign citizen cannot stay in the country where his house is located all the time. In any case, in the German state, the fact of entry into ownership does not provide an opportunity to obtain a residence permit. Yes, it characterizes the owner from the beneficial side, but does not provide residency.
While staying in their home country, the happy owner of foreign real estate will not be able to keep track of the timely payment of utility bills, the payment of funds to the account of rent by tenants, and monitor the careful handling of the apartment as a whole. All this is undertaken by the official representative.
Thus, the trusted company will have to:
- carry on correspondence with all parties related to the residential object - tenants, owners, utilities, local executive bodies;
- carry out all related payments, monitor payments under the lease agreement;
- provide a report to the owner on all financial transactions;
- accept complaints from tenants;
- recieve mail;
- to ensure the repair of the premises (payment for materials and labor is paid separately);
- look for new tenants if necessary.
It follows that an authorized representative deals with all technical and economic issues related to the management of real estate, as the owner himself would do if he had the opportunity to constantly be in the same territory with his property.
What to consider when choosing an item to buy
If 2021 is marked for you with the purchase of overseas property, do not forget that a successful transaction can be considered not only when something at a good price turns up to you. In most cases, the object itself matters. Before deciding on anything, consider the following characteristics:
- the location of the house or apartment. In large cities in Germany, it is very difficult to acquire unclaimed housing. Whatever you decide to acquire in cities such as Berlin or Munich, you can always rent this home. The same cannot be said about the countryside.
- quality of construction. Despite the fact that everything in this country is so good, the probability of getting to a dilapidated or low-quality facility is very high. This means that you have to find out everything about your purchase: the date of construction, information about the materials used, if possible, the infrastructure of the house, the facade and other technical characteristics. Pay special attention to the roof, heating, walls. Specify how long ago the last repairs were carried out, what alterations were carried out after construction. Perhaps the load-bearing walls were affected or the floor was insulated;
- compliance of the requested value with the market in the given region. Very often it is overstated, which is a personal whim of the previous owners;
- carefully study the conclusions of the meetings of the owners of the premises. Sometimes they can contain very useful information;
- analyze utility bills. It matters how regularly they were deposited, whether they were overcharged. If such a fact took place, you need to find out why. It may turn out that the previous owners are at the stage of legal proceedings on this issue;
- clarify how many people owns the property at the time of the sale.
Before the day of the deal, you should not have the slightest doubt about your purchase.
What responsibilities are assigned to the management company
The main goal of the buyer as an investor is to make the most of his purchase. It is quite logical that I would like to find tenants who would regularly pay the rent, carefully use the property entrusted to them and do not bother the landlord on all sorts of minor issues. In this regard, it will be important to understand exactly what tasks you can entrust to your representative in Germany.
Commercial aspects
First, let's deal with the commercial nuances that the intermediary takes on:
- Opening a bank account. Sometimes the principal allows the use of an existing account, on which the management company will be able to conduct all transactions online. At the same time, the trustee only manages the rental account, without obtaining the right to use the funds received for it for his own needs.
- Control of receipt of payments for rent.
- Sending alerts to tenants if they have not paid for their accommodation on time.
- Payment of all current expenses: taxes, loans, various services. Payments are made from the rental account, if all the necessary documents and money are available.
- Implementation of the annual recalculation of the consumption of utilities in authorized organizations - water, gas, heating, electricity.
- Annual reconciliation of operating costs with tenants.
- Providing reports on all payments.
- Tracking the receipts and storage of pledges to the payment for accommodation fund.
- Providing reports to the property owner if there have been some changes in the invoice.
- Annual report to the landlord on the movement of funds in the rental account.
Solution of technical issues
In addition to financial issues, the management company assumes the solution of all technical issues that inevitably have to be faced when dealing with buildings and structures. In particular, the owner can count on assistance in the following:
- Organization and implementation of repair work of various types, both planned and unplanned. This can be an update of outdated or worn-out communication systems or parts of the building itself. This also includes repairs that were needed as a result of an emergency.
- Taking the necessary measures to save and optimize consumed resources.
This list of responsibilities is not complete. It will depend on the personal requirements of the property owner and on the characteristics of the object itself.
Legal and Representative Issues
The most difficult one can be considered the legal sphere, affecting the relationship with the laws of a foreign country. Without the proper knowledge, experience and command of the German language, the owner of a residential or commercial space may find himself in a rather disadvantageous situation for himself.After all, the legislation of the Federal Republic of Germany can have many pitfalls, which can only be bypassed by a person who is well aware of them. So, in legal terms, the management company will have to deal with the following points:
- Represent the interests of the owner in all state bodies and other structures that are related to the issue of ownership of real estate.
- Negotiate with third parties and tenants to optimize property management
- Inform tenants about the increase in rent after it has been agreed with the owner.
- Enter into and terminate lease agreements on behalf of the home owner.
- Conduct correspondence and store all correspondence regarding the entrusted object. Provide the owner with copies of letters and notices received.
- Work with insurers if insured events arise.
- Interact with lawyers when their intervention is required.
This list is also not final. The complete list will be due to the characteristics of the building and its condition.
How to make sure you trust your property to professionals
Given the importance of issues that will have to be entrusted to outsiders, it is quite logical to assume that the main concern of a property owner is the correct choice of a management company. And here it is important to remember a few points:
- in most cases, the property management service is provided by the real estate agency through which you make the purchase. This is one of the after-sales services provided by resellers.
- if we are talking about a building that is intended for business, that is, about commercial real estate, then, as a rule, the owner himself takes responsibility for managing it. It is more profitable, cheaper and more reliable. If it is nevertheless necessary to hire a trusted person, in this case the owner has the right to independently decide who he will give preference to.
- in the case of buying an apartment, things are a little different. This is due to the fact that only part of the building is acquired. Therefore, it will be possible to influence the choice of the trustee only indirectly. It is usually determined by a vote at a general meeting of owners.
So how do you get your property into safe hands? One thing is certain - you need an organization with an excellent reputation. First of all, specify how many objects are already under the care of the intermediary you are interested in.
To make sure your property ends up in the hands of the professionals, ask them for the contacts of the clients they already do business with.
Pay special attention to the costs of paying for the services of an intermediary. It should not be too different from what currently exists on the German market. To do this, monitor the situation and find out how much other firms evaluate their work.
Another aspect is the terms of the contract. Companies that do not perform their duties too conscientiously tend to sign a document without the right to terminate the relationship. This kind of companion is definitely not for you.
Give preference to those who allow termination of the contract within one month. In this case, the company will be interested in keeping you. But if the agreement is concluded for a long time, no one risks being fired for poor-quality work, and you will only get new problems instead of solving them.
Take the trouble to figure out exactly what the company is doing. So, say, in Bavaria, there are about 80 offices that provide services in this area. But most of them carry out multidirectional activities, being engaged in real estate, tourism, and car rental at the same time.
For a foreign investor, a company with a narrow specialization is more suitable. This is a guarantee that she is more familiar with the market you are interested in.
And one more important point is the participation of your chosen intermediary in specialized organizations, namely the Association of Management Firms and the Society for the Protection of Consumer Rights.
Outcomes
When purchasing real estate abroad, be prepared for the fact that you will need an intermediary who will take care of the object of your purchase. In Germany, such a service is provided by management companies. But before you conclude an agreement with one of them, take into account the following points:
- a professional mediator takes care of all current tasks - legal, technical, financial;
- the authorized person, according to the signed agreement, receives the right to resolve all issues on behalf of the owner, except for the alienation of property;
- When choosing specialists, ask them to provide recommendations, study the history of their work, make sure that they are members of specialized associations.
But whether you can independently choose who to entrust your purchase will depend on the type of object and your share of ownership in it.
