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Comment by mmarq | Hacker News Reader

A flat that cost 500-600K in Berlin would be rented out at 1000€ a month, that can’t increase more than the rent control allows. A mortgage would cost 3 times as much.

So you’d be better off renting and investing the deposit, the stamp duty, notary costs and the 2000€ you save each month in government bonds.

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Are you sure about these numbers? As ROI doesn't make any sense to me in context of the new investments built solely for rent. How does it work?

Yes, check Numbeo for Berlin, Frankfurt, etc. Then look at the tier 1 and 2 cities in China.

https://www.numbeo.com/property-investment/rankings.jsp

The ROI absolutely does not make sense but it's real. A large portion of the world believe that the only two investment classes are real estate and government bonds.

average cost for an apartment in Berlin is apparently around 5.100/m2 and rent is around 11/m2, so back of the napkin math pretty much checks out

If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere. In the UK it may still be profitable because you can evict tenants for the lulz, so they have to accept that properties are not maintained and that children may die of mould.

We would be all better off if people invested in the stock market instead of “investing” in properties (including landlords)

> If landlords are forced to follow all regulations, the ROI on renting doesn’t work anywhere.

Then, who builds the new apartments that people rent? If 50% of people in Germany rent and there is no ROI from building for rent, then who finances the new buildings??

I don’t know, maybe local authorities build them or probably new apartments are exempt from rent controls. But even in London, where my neighbour pays £3500K a month to rent a 65sqm flat, the landlord is earning much less than they would if they invested in the stock market. And they would be actually losing money if they carried out repairs, instead of having their tenant living like a rat.

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