240 000.00 €
Type: Buy to Let
Interest payment schedule: Monthly
Min. amount of investment - € 100
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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Eberswalde is a town of the Barnim district in Brandenburg (DE) and is located about 50 km northeast of Berlin (about 30 km from the border with Berlin). The city has a population of 41.5 thousand inhabitants and its area is 58.20 km2. The distance from Eberswalde to the German-Polish border in a straight line is about 20 km.
The town is located in a picturesque rural area between lakes and rivers and close to the Schorfheide forest landscape, which is considered to be Germany's largest forest.
It’s infrastructure includes schools, gymnasiums, large grocery stores (Kaufland, Lidl, Net, Penny Market, Real), restaurants, cafes, bars, a sports hall, kindergartens, a swimming pool with a sauna and slides for children, a zoo and a nature reserve with large beautiful lakes, with hiking trails and parks throughout the city.
According to the Brandenburg state funding strategy, Eberswalde is classified as a "Regional Growth Core", making it one of the 15 premium locations in the Brandenburg state that benefit from maximum assistance. The most developed industries of the city are healthcare, logistics, and woodworking.
The object is a combination of two buildings, on the land plot with a total area of 2498 sqm. One of the buildings is on the street side (502.1 sqm) and the second building in the courtyard (305.5 sqm), which are connected by big garages with 3 parking slots. At the courtyard building there is another garage, which was equipped for the economic needs of the object.
In the street side building, renovation and construction works were carried out in 2015. The works included the repair of the roof, facade, including the replacement of windows, heating, water supply and electricity. The building has 3 floors and 14 rooms with 40 beds. Each room is equipped with a separate bathroom. On the ground floor, which occupies 168 m2, it is planned to place a reception and a restaurant.
It is planned to continue with renovation works, making a second fire exit, refreshing the facade painting, as well as equipping the reception and restaurant.
The courtyard building was built in 2016 and consists of 2 floors and 5 rooms (two rooms are equipped with their own kitchen). The construction process of it was suspended due to the lack of funds from the previous owner. At the moment, the object is completed for 70%. It remains to perform the following works:
Monthly rental payments – repayment of principal amount together with capital growth by end of the investment period.
The premises will be divided into 5 units, each unit represents 1 floor. After the unit is funded, investors will start earning proportional rental income from the total income of the premises. Currently, all the rooms are rented out mid-term (weekly-monthly). When all 5 units are funded, they will be merged into one property. The property comes with a pre-agreement to sell the premises with 12% premium (from the funding target), after we have finished the renovation works.
Market current state
The property prices in Berlin range from 2500 to 7000 €/sqm. Due to the growing demand for housing, the renting costs are also increasing. In this case, the rental price range is from 8 to 16 €/sqm. In fact, there is a trend of demand for residential premises outside of Berlin, within a radius of 50-60 km, where Eberswalde is located. Currently, the cost of residential real estate or renovated buildings varies from 1900 €/sqm to 3800 €/sqm, and the rental price ranges from 7-10 €/sqm.
Since Eberswalde is a satellite city of Berlin, and the main transport link between the two cities is the railway, there is a great demand for apartments, especially for the ones that are located near the Eberswalde Train Station (up to 1-1. 5 km).
The first unit of this property will be the 2nd floor of the street side building, with a total area of 164.5 sqm. In the street side building, there are 14 guest rooms in total. On the 2nd floor there are 6 rooms (15 - 31 sqm each). The price per sqm is 1460 EUR, which is well below the market average and provides the opportunity for profitable exit after finishing renovation works.
After acquiring this property, we are planning to renovate the premises (expenses are included in the funding amount), while keeping most of the building rented out.
Our strategy with this property is to maintain the cash flow for a 24-month period and by the end of this period, the profitable exit will provide our investors with 12% total capital growth.