Monthly Archives: September 2012

Leipzig

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Leipzig.

Beautiful city. Much much bigger than Chemnitz.

BIG station

We were here twice to look at real estate again, but it turned out that prices had gone up here, and you cannot get as good a rental return as in Chemnitz any more. Not that you can’t find a bargain here if you search for it. Leipzig has always been the financial hub of Saxony and it shows in the buildings. Sometimes it is a bit too much. Trying to show of how much money they had. The train station we arrived in was massive. One of the biggest of Europe and really impressive. Also it is off course the town of Bach. Great downtown area, as it was not bombed much.

Bach

OK.  Leipzig is beautiful.  While we were being driven around by an estate agent, he took us through the area of Jugendstil that is competing with Chemnitz for the title.  No contest.  This area is a lot better.  However  The quality here is better.  It may not be bigger.  Still it was a good area to drive through, and if you have a cool mil and a half, you can pick up a pretty building.  Or at least a unit or two!

Market square in Leipzig

Mark was brilliant.  It was a shame that we met him so late in the game, and we were there, as we felt a bit guilty.  We did explain the situation to him, and he was fine about it.  But he still wanted to show off the city as much as he could.  It was almost enough to make us change our mind.  There is one, well two, really nice buildings.  The second one is now sold, and the first is third on our list.  It is big, and has a good return.  The main point is that there is another building out the back that is included in the price.  This would be perfect for us, but we will see what happens.  It is happening so slowly in Chemnitz that if we change our mind now, we could be here all winter (at -20 degrees, no thank you!).

While we were there to check out the sights for the Auction, we got to walk around the city.  There is plenty of Terraced cafe’s, bars and the like.  There was even a market on.  OK, so this happens all the time in European Cities, but it was still good to see.  There are always the obligatory sausage stall.  Beer.  Mead, Bakeries, flowers?!? (This region has a thing for flowers.  Every balcony has a thing for flowers.  They are everywhere.  If you have a window sill there are at least three blooming flowers on it at any time) veggies, Beer and sausage.  Did we mention the beer and sausage already?  No?  Well there is plenty of beer and Sausage.  With more Sausage stalls with a few more beer stalls.

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Chemnitz Real Estate

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We came to Chemnitz with the ides of buying an old building in an auction and renovating it. It’s a nice idea to rescue a beautiful building and making money while doing it. There are plenty of buildings that still need renovating in this area of Germany.

Our dream building, but we can’t afford it..

After viewing  the buildings in the auction that we were interested in, we narrowed it down to one. (a few others had lost most of the roof, missing floor due to wet rot, and one even had rotten foundation) Our choice was big corner building. 1281m2. In a nice, mostly renovated area of town and very close to the university. Ideal to rent out to students later. Starting sale price of 20000. Unfortunately it turned out to cost over a million to renovated it. New windows, plumbing, heating, electricity, facade etc, etc. Most old buildings take around 1000 euro per square meter to do up from scratch. More than we will ever have.

We started wondering about real estate prices here. Already renovated buildings are being sold for less than the renovation cost would have been. How is that possible?
Chemnitz has some great tax benefits for renovators. Depending of the building and the area you are buying in. 95% of all costs can be tax deducted over the next 12 years. So if you have a good job in Germany it sounds like a great thing. After 12 years you can sell the building cheap and still make a profit. (you would have gotten rental income too and after 10 years of owning a building you do not pay any capital gains tax)
This also explains why most of the buildings on the market have been renovated before 2000.

Some buildings need a bit of work

We started our search over. Now aiming at a renovated multifamily house (apartments) with a good rental return. A lot came up in Sonnenberg. An area of Chemnitz that is allways listed as “up and coming”. There are some beautiful houses here, but the overall area is not really that nice. We would prefer to buy in Kassberg (fanciest area) or Schloss Chemnnitz (old castle area).
Sonnenberg is the working class area of Chemnitz, and has always been so.  It is called the up and coming area, but has been that way for the last ten years.  There are a lot of pretty buildings in the suburb, but there are also a lot of people drinking in the parks at ten in the morning.
Kassberg is a Jugendstil area.  Fancy buildings built at the turn of the 20th century.  It argues with Leipzig that it has the highest density of these buildings.  However as it is the most sort after area of the city, it is basically unaffordable.  Then there is Schloss-Chemnitz.  This is the very exclusive area on top of the hill overlooking the town.  However there are areas that are not as expensive, and also quite pretty.

As we were focusing on a 10% return for our investment, we could narrow down what we were looking at.  With extensive online research we started ringing real-estate agents in the city.
This proved to be an interesting experience.  A lot refused to talk to us, and everyone required a german address and phone number before they would send us any information.  We found out a lot later that this is to stop rival agents poaching the building.  Apparently this happens a lot.

Lots of fixer-uppers around

Still we used one of the contacts we had found when looking at renovating to talk us through the process.  Mr Viedemann was very helpful, and set aside a few hours at his office to run through everything.  Now we had an idea of what to expect, and a few buildings we wanted to look at.  Still we had the problem that people would not talk to us.  Not sure if it was Anna’s broken german, or if people really don’t want to sell buildings.  By this stage we had narrowed down our buildings to three.  Kreherstrasse, a nice old building that had the original paintings on the inside walkway.  It had been advertised as a high quality finnish, and a rental guarantee for the first year.  On the inspection however it looked good, but the rooms were tiny.  2 flats were under 35m2!  Three were vacant (hence the guarantee) and there was a school assistance business at the bottom, which was good.  However the finnishings were not what we had been led to believe.  Hilbersdorf, which was a nice small building in a leafy suburb north of the city.  This was good, as it was fairly cheap.  However the real estate agent is telling us it is sold.  We have told him it is still listed on his website, and to this date it is still there!  Then there was a big brown building all by itself in an industrial area.  Not the prettiest, but great parking out the back (a valuable commodity in this town) and close to the big businesses, and main park.  However it is ugly and on the main, main street with a second hand car dealership next door.  So these all scratched it was back to the drawing board.

On walking around town we noted all the people selling buildings (as they all have signs up, or banners hanging out the windows) and did some more research.  Expanding our search to international sites.  Here we found Sven, and another company Nagel.  Nagel has a brilliant building in Schloss Chemnitz.  720+m2 of living, and roughly 70-100m2 units.  Well layed out, big yard, parking and a nice building in a nice street.  However it also needs three units modernised (new floors, tiles in the kitchen, paint).  Still it has  good return, and although it would be a problem renting out the office space on the ground floor, it would return our 10% without it.
Sven had a nice building a few streets away.  It was single standing, and although a lot smaller, the owner was a person that buys repossessed buildings, renovates them and sells them.  He also has his own management company and offers an all in one solution.  The building is not as pretty, and is being fixed after a fire.  But he does the rental guarantee, and we both got a good feeling about Sven and Joachin (the owner)

The deal that Sven has is perfect, but we have fallen in love with the other one.  We were half way through the process with it, when we offered what we could to Nagel.  Fully expecting them to say no,  They said come in and talk it through, so we did.  This has proved to be a bit of a run around.  The price went up, than back to the same, then the same with 19% tax, then back to what we offered.  We had expected to make a deal then and there, but now they are taking our offer to the owners.  This is the same deal we had offered 3 weeks ago, and are a bit miffed at it.  No where near as professional as Sven!  So now we wait.  We did debate whether just to buy Sven’s building, and if this one falls through we hope it is still on the market, as I will be calling him before we even leave the other office to see if it is still available!

A quick rundown on costs:  Building Price.  Stamp Duty (Government taxes): 3.5%  Notary: 1.5%  Commission:  This varies from about 3.5% inc tax to 7.14% inc tax.  Legal (If you choose to have a lawyer) $2,200 inc tax, Building inspector:  Be crazy Australians buying in Chemnitz, and they will come along for the fun of it.  We haven’t received the bill for this yet, but as it is the same guy that talked to us for a few hours, we think he deserves something!  Thats about it.  The main thing you need it time.  It has taken us two months to get to this stage, and we can still leave here without buying.

We have walked around most of the city, checking buildings, and streets before deciding on whether we wanted more information, and managed to cut out a lot of time this way.  However it seems as if you get faster replies if you book a viewing of the building rather than just more info on it.

Running costs will come later, as there are two sections to rent here.  Cold rent, which goes to the owner, and warm rent.  Warm rent is heating, taxes, electricity, water, grounds keeping etc.  The only expenses in cold rent are the management costs.  About 20 euro a unit a month.  To find a tenant is two months of the cold rent to the agent, and if a unit is empty you pay a percentage of the warm rent to cover those expenses that are needed.  EG: Taxes are paid by the tenant, and by the owner if no tenant.

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Chemnitz more

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Chemnitz:

There are about 250,000 people in Chemnitz at the moment. It used to be called Karl Marx Stadt under DDR times.
It is a fairly industrial city with VW and other industry.  It is trying to position itself as a high tech city, and its Technical university is in prime position to solidify this.  The uni itself is quite large with over 10,000 students and growing. (And apparently free to attend.  Whether German or foreign!)

Chemnitz theater

The city itself has lost a lot of its population since the wall fell, and last year is the first year that it grew.  About 150 people all told!  Still, if this is the new trend then people will start moving back.  Especially as it is a lot more expensive to live in the west than the east.
There is one big housing company the GGG that took over from the fall of communism, and it has all the old (1960’s) style buildings.  However it has been demolishing the bad ones to create parks and parking.  Still it has over 30,000 vacant units.  Then there are all the private buildings.

Most graffiti is anti fascism

Although the city is industrial, it does have a good feel about it.  There is always something happening in the town square, and plenty of pubs and clubs around.  We have never felt unsafe walking around, even though you see some of its 11% unemployed drinking beer at 10 in the morning.  So I am having Vodka at 11!  There is a lot of graffiti on the buildings, and street fixtures, but surprisingly most of this is Anti Nazi!  The rest is just tagging.  A bit disappointing, but not unusual in any city.  Apparently there is a large nazi population in the city, but most of them live in the suburbs.  There is also a big Punk movement and everything else in between.

Losts of parks

The city is fairly well spaced out, with industrial areas, shopping, and living.  There is one of the biggest collection of Jugendstil buildings in Germany.  These are build around the turn of the 20th Century.  1890 – 1910ish.  And although it has been a city since the 11th century, this was one of the periods it did really well, and the architecture shows it.  Having said that, it is not Leipzig, Dresden or Berlin.  But it has its own charm.  Kassberg is the place for this, and the entire suburb has almost been renovated.  There is Sonnenberg which has some beautiful buildings as well, and this is more the working class area.  Then Schloss-Chemnitz.  Around the castle region, and other suburbs.  They all have a wide variety of building types from the over the top ornate, through to the GGG “60’s” housing blocks (It looks like social housing, but is for anyone).

There is a nice canal running through the city, and a large park on one side of it.  This is a very social area, and you always see the very active german people out on bikes, roller blades, walking, jogging etc through here.  The same with the parks around the uni.  There is always a soccer game, or volleyball, basketball and even tennis happening.  Usually all of them.  Too active for us.

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Chemnitz in September

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Chemnitz
Accommodation
Around Chemnitz
Around Leipzig

We arrived in Chemnitz on Sunday.  This is not a good time to arrive here.  Everything is closed on Sundays.  Not knowing where tourist Info was (other than it being close to Downtown) we started walking.  Past some fantastic old buildings and the church, theatre, and some very expensive hotels.

The black stump of Germany

On making it to the main square, we found that there was a large food market happening.  There were wine stalls, sausage stalls and plenty of beer stalls.  Summer in Europe is something.  Every town seems to be doing things.  The Rathouse (Town Hall) is a majestic building that is right on the square.  Old and gothic.  It is about the only good thing you can say about downtown though.  The rest of it is glass monstrosity.  Modern buildings that probably looked dated the day they were opened.  This is a bit disappointing, as when the wall fell there was a lot of money put into the east, and Chemnitz apparently won awards for how it had developed the area.  You can see that they have tried, it just isnt to our taste.  There are not that many ould buildings here as most were destroyed during the war, and god knows what happened under the DDR.

Tourist Info was closed (Sunday) and only had a small map on the window of a few hotels.  Most of which we had passed on the way in.  Looking for accommodation then was not an option today, as we had our bags and no idea on where to go.  As Chemnitz doesn’t get the tourists, there is no over abundance of cheap hotels on every street.  We ended up going into the Mercure hotel to ask what they charged, and if there was a cheaper one nearby.  It turns out they are quite reasonable.  66 Euro a night.  Done!  They even provided us with a map of the city region.

Feeling a bit better, as we now had a place to dump our bags, we settled down to enjoy the view from our 21st floor window.  You could see a long way west of the city.  The city seems quite dispersed.  Plenty of greenery, and lots of built up streets.  It was a good view.  Picking out a few landmarks to help us navigate around the city (a brightly coloured smokestack that over a month later, we still dont know what it is for!) The church on the hill, which is the only part of the original castle still standing, and the main park close to the city centre.  This should be enough, along with the map to start seeing the city.

We had the catalogue of the buildings going up for Auction in a months time, and set out to have a look at our short list.  We had selected three or possibly four that we wanted to look at.  These ranged in opening price from 3000 euro up to 22000 euro (more on this later!)

Going for a walk in the city was like walking through a ghost town with people.  It did not feel like a city.  There was hardly any traffic, few people out and about and very quite.  This is due to it being Sunday.  The city did liven up a bit the next day.  Chemnitz is easy to find your way around.  There are a few big arterial roads, with suburbs coming off them.

One of the things we noticed first was the amount of older people about.  Chemnitz has the lowest birthrate in the world, and an aging population.  This then should not be unexpected.  However there were still people with prams about, and the longer we stay here, the more we see young people and families.  The second thing was the amount of dilapidated buildings there are in the city.  Every street seems to have a couple.  If not entire streets.  This explains why there are such cheap buildings to be had.  They are everywhere!

Nice house.

The ones that have been done up vary in quality.  Some have had all decorations removed (If they had any) and look like plain square buildings.  Others have had a fortune spent on them.  The decorations fixed or replaced, immaculate details in the facade restored, and widened walk-through so that you can park out the back of the buildings.  The funny thing is that you can see every level on one street.  Places with the roofs collapsing next door to a building that has had millions spent on it.  But hey.  Thats why we are here.  To save one of these turn of the 20th century buildings from being demolished, and find it a new future.  Still, it is going to be tricky, as we are seeing a good 20-25% vacancy rate in all buildings.  Just going off whether a unit has curtains or plants in the windows.  Very scientific.

Still.  We have a month until the Auction so we had better get cracking.  More about that in a different topic.  This is just Chemnitz!

Over the next few days we needed to find better long term accommodation, as we would be here a while.  Walking around we found more hotels, and asking in them, we got the daily rate down to about 50 euro, but that is still more than our daily budget.  Monthly rates were not that much better.  That night we asked at the Mercure, and jumped when they said 600 a month.  Perfect.  However, she had to call her manager over to make sure, and it turned out to be 850.  Pretty good as far as we knew, but we wanted better.  It also turned out that the rate for tonight would be 88 euro?!?  Apparently they charge on how full they are.  New accommodation was now needed.  We walked up to a pension we had visited earlier, and booked in for a few nights.  During this time we got online and started looking for accommodation.  We found some furnished apartments that were a pretty good price, and on ringing them, found out they were booked until the tenth.

Student quarters

Then we found a place at the University.  150Euro a month to stay on campus!  We would be students again!  Organising everything with Jose.  An Indian studying here but going home for holidays.  We could rent his room for the time we are here.  It is a basic room.  about 18m2 with a single bed, shared toilet with the rest of the floor (35 rooms) and showers.  Still, we don’t need much, so it would do us.  The big point was that it is only 150.  More beer money (Well it turns out that although german beer is cheap, you can get 700ml corn vodka for about 5 euro and 1.5L wine for 2!  Stuff the beer!)  So that is our accommodation sorted.  A quick shopping trip for another mattress, kettle and cooking gear and we are set.  Still here to.  A bit sick of the people that slam their doors every time they go in and out (Usually between 2-4am when they come home drunk) as the hallways are not soundproofed and the noises are amplified.  Sharing the bathroom leaves a lot to be desired as well, but hey.  I had forgotten what it was like at Uni, so needed reminding!

28 July 2012

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Yes we know.. We have not put in a blog for a while.
We have been with family in the south of France. Near Gibles to be precise. (You can google-earth it if you want) We left on the 26th and after a night stop over made it to Nurnberg yesterday. The trains in Europe are very expensive, and honestly a bit slow.. Even the TGV didn’t go that fast, it just doesn’t stop much..

Church in Nurnberg

Nurnberg: Off course famous for it’s Nazi history, but we have not found any references to this. We found a nice hotel close to the train station and after check in, went for a walk around.
The town is like most German cities, a very pretty old downtown. They seem to have rebuild a lot after the war, and the newer buildings fit in just fine.
We have made it to the land of beer and bratwurst. A bit too early for us still..

Perfect place for lunch

We make our way to a tiny little park along the river and have lunch. Walking back the music has started. It is bard festival this weekend, and there are stages and buskers everywhere. It is nice to be in such a festive atmosphere. We settle down in front of a stage with our store-bought bottle of white and bratwurst on a bun and wait for the entertainment to start.

Folk music

We get a three girl group with violins performing folk music. Their German is a bit hard to understand, but even with the little things we pick up, they are hilarious. Songs about bratwurst and beer etc. Even tough we did not get all the jokes, the music was enough for us. These girls know how to play! By the end of the show our bottle was empty and we decided to call it a night.

Big tower of Nurnberg Castle

Inside castle

Beautiful little street

28th: Unfortunately Andrew is not feeling well today, so Anna is on her own.
The plan was to check out the old city walls and make our way up to the big castle on the other side of old town. I got a bit distracted as I had to make my way through the shopping district. Lost my direction a bit, but eventually saw a tower stick out. There are still a few impressive wall towers standing. From there it is easy to make your way along and up the hill. The caste is amazing, but a bit busy. The castle is one of the most important castles of the region and all the meetings during the Roman empire were held here. Good views over the city.

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20 July 2012

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ticket for train
line
catacombs
rain

How many bones must a man throw down?

Only two things on the list today: Train ticket and the Paris Catacombs.
Back to Gare du Nord. Back in line. This time we try the TGV. When we get to the desk, we are told you cannot buy TGV tickets at the TGV ticket desk (? so french) So we line back up at the French railway ticket desk. This time we get lucky. This lady speaks english and is willing to help us. We love her! The only downside is that the trains are full and the only ticket available to Macon leaves at 6.45 in the morning from a station across Paris. This will mean a very early rise, but we have no choice. The trains are all booked as today is the start of summer holidays for most of Paris. We have to be in Macon tomorrow as Anna’s brother will be there returning a rental car.
The early wake up is nothing to look forward to, but we do look forward to the catacombs.

Before it’s called a catacomb

The Paris catacombs is the biggest necropolis in the world. Not in size, but in the amount of people buried there. About six million. Back in the day, they quarried the stone for Paris’s big buildings here. When later the city cemeteries got full and became a health hazard, they moved all the bones into the old quarry tunnels. Later, when it was opened for the public, they rearranged the bones a bit to make it look more attractive.
We expected a line, but not one as big as this. The entrance is in a little building on the edge of a round park. The line stretches three quarters around this park, and does not seem to move much. We join and try to be patient. It takes almost three hours to finally buy a ticket and make our way down.

And how many bones must a man go through?

This better be worth it. We waited for three hours to do a one hour walk. The catacombs are very big, but we are only allowed to do this one walk and not explore on our own. We do understand it, but it does take the fun out of it a bit. The skulls and bones are nicely stacked up at the front. Femurs, skulls, femurs, skulls, etc. Everything else was chucked behind. They missed a big opportunity to do something more creative with it. We were not allowed to take photo’s with flash, so sorry if they are blurry.  Winding our way through the named streets underground was interesting though, and although, not fun, was fun.

Before he finds great Auntie Joan?

When leaving, our bags get checked. They want to see that we did not take any bones with us. Andrew makes a joke, but that is not appreciated. To prove his point the Frenchman shows the catch for the last few hours. He has a bag full of bones and even whole skulls that people have tried to smuggle out to take home. Why do people do that? What are you going to do with a strangers skull any way?

 

 

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