Is buying a property in Friedrichshain a good investment?

Last updated on December 29, 2023

Yes, the analysis of Berlin's property market is included in our pack

If you've seen the trendy bars and artistic vibe in Friedrichshain, you may have considered living in this vibrant Berlin neighborhood.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Germany, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Friedrichshain?

Friedrichshain, nestled in the vibrant heart of Berlin, has steadily emerged as a sought-after location for property buyers, and it's not hard to see why.

Imagine strolling through a neighborhood where the echoes of history blend seamlessly with contemporary urban charm. This unique blend is what sets Friedrichshain apart from other real estate markets.

One of the key attractions of Friedrichshain is its rich cultural tapestry. This area is famed for its dynamic art scene, trendy cafes, and bustling nightlife, which are a magnet for those seeking an energetic and youthful urban environment.

Compared to other areas in Berlin, Friedrichshain offers a more eclectic and bohemian vibe, which is quite distinct from the more polished and upscale character of neighborhoods like Charlottenburg or the historic gravitas of Mitte.

The rise in popularity of Friedrichshain can be traced back to the post-reunification era of Berlin in the early 1990s. It was during this period that the area began transforming from an industrial zone into a cultural hotspot.

This transformation was driven by an influx of artists and creatives drawn by the affordable rents and the allure of spacious loft apartments in former industrial buildings.

Over time, this influx has led to significant gentrification, which, while increasing property values, has also sparked debates about the socio-economic changes in the area.

Friedrichshain tends to attract a diverse mix of people. It's particularly appealing to young professionals, artists, and expatriates who are drawn to its vibrant culture and relatively affordable living (compared to other major European capitals).

The presence of several tech startups and creative agencies in the area also adds to its appeal for those in the digital and creative industries.

However, it's important to consider some potential drawbacks of Friedrichshain. The very factors that make it attractive are its lively nightlife and cultural scene can also be a source of noise and congestion, which might not appeal to everyone.

Furthermore, the rapid pace of development and gentrification in the area raises concerns about the sustainability of its cultural diversity and the risk of losing its unique character.

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Why is Friedrichshain a nice place to live?

Friedrichshain is often celebrated as a fantastic place to live, thanks to its unique blend of culture, lifestyle, and amenities.

The lifestyle and culture in Friedrichshain are dynamic and diverse. Known for its vibrant arts scene, the neighborhood is dotted with galleries, street art, and indie cinemas, like the famous Kino International.

Cafes and bars line the streets, each with its own unique flair, reflecting the area's bohemian spirit. This cultural richness makes Friedrichshain not just a place to live but an experience to be a part of.

For expatriates, Friedrichshain is particularly attractive. Its international vibe means that newcomers from abroad often find it easier to integrate here. The presence of various language schools and a cosmopolitan community facilitates a smoother transition for those adjusting to life in Berlin.

When it comes to living costs, Friedrichshain is somewhat of a mixed bag. While historically it was known for its affordability, recent years have seen a rise in living costs due to its growing popularity.

However, when compared to other major cities in Europe, Friedrichshain still offers reasonable value for money, especially considering the cultural and lifestyle benefits it provides.

Safety is a crucial aspect of any living area, and Friedrichshain fares well in this regard. While, like any urban area, it's wise to be cautious, especially at night, the neighborhood is generally considered safe with a strong community feel, adding to the comfort of its residents.

The area is well-equipped with amenities and facilities. For families, there are several schools, including the well-regarded Andreas Gymnasium.

Healthcare facilities are robust, with hospitals like the Vivantes Klinikum im Friedrichshain providing excellent medical care. For shopping enthusiasts, the East Side Mall offers a contemporary shopping experience with a variety of stores and eateries.

The quality of infrastructure in Friedrichshain is quite commendable. The roads are well-maintained, and utilities function reliably. Internet connectivity is generally strong, a crucial factor in today’s connected world, particularly for the tech-savvy and professionals working remotely.

Accessibility is another strong point for Friedrichshain. It’s well-connected to other parts of Berlin, making commuting relatively straightforward. The neighborhood is served by several major train and subway stations, like the Warschauer Straße and Ostkreuz, linking it to different parts of the city.

For international connectivity, the Berlin Brandenburg Airport is accessible via public transport, making travel in and out of the city convenient.

Speaking of public transportation, Friedrichshain benefits from Berlin's efficient system. Trams, buses, and the U-Bahn (subway) provide extensive coverage, making it easy to navigate the city without a car.

The availability of various transportation options underscores the area's commitment to sustainable and accessible urban living.

How much does it cost to buy real estate in Friedrichshain?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Germany.

In Friedrichshain the cost of buying a property can vary widely, influenced by factors like property type, location, and market dynamics.

This district, known for its vibrant culture and historical significance, offers a range of residential properties.

The most common types of residential properties in Friedrichshain are apartments. These range from old, character-rich Altbau (pre-war) apartments to more modern Neubau (post-war) ones.

Houses and luxury villas are less common but can be found in some parts of the district. Apartments, particularly those with historical charm or in well-connected areas, are in high demand.

This demand is driven by a mix of factors, including the area's cultural vibrancy, its proximity to central Berlin, and the appeal of living in a historically rich yet modern urban environment.

In terms of market composition, Friedrichshain has a mix of new developments and resale properties. There has been a surge in new apartment complexes, catering to the increasing demand for modern living spaces. These new developments often offer amenities that older buildings lack, such as elevators, balconies, and energy-efficient designs.

The price range for properties in Friedrichshain varies. Prices per square meter for apartments could range from approximately €4,500 to over €7,000, depending on factors like the age of the building, location, and amenities. It's essential to note that these figures can fluctuate based on market conditions.

Over recent years, property values in Friedrichshain have seen a steady increase. This trend is largely attributed to the area's growing popularity among both locals and expatriates, coupled with Berlin's overall real estate market dynamics.

The district's ongoing development and gentrification have also played a significant role in this upward trend.

Looking ahead, several factors could influence the real estate market in Friedrichshain. Any upcoming city planning changes or new developments could impact property values.

For example, projects like the East Side Gallery development, which includes new residential and commercial spaces, could further enhance the area's appeal.

Additionally, improvements in infrastructure and public transport could make Friedrichshain even more accessible, potentially driving up property prices.

Predictions for the real estate market in Friedrichshain in the coming years suggest a continued rise in property values, albeit possibly at a slower pace than in the past decade.

Factors indicating a potential increase in value include ongoing urban development, the area's sustained popularity, and Berlin's status as a growing European hub.

For potential buyers, it's crucial to consider these dynamics. Friedrichshain's blend of historical charm, modern amenities, and cultural richness, combined with Berlin's overall growth, positions it as an attractive area for real estate investment.

However, like any property market, it's important to stay informed about local trends and developments to make a well-informed decision.

Where is the best area to buy a property in Friedrichshain?

When considering the best area to buy property in Friedrichshain it's essential to understand how the different parts of the district vary in atmosphere, property types, and prices.

Friedrichshain is diverse, with each area offering its own unique charm and characteristics.

One of the most sought-after parts of Friedrichshain is the area around Boxhagener Platz. Known for its lively atmosphere, this area boasts a variety of cafes, restaurants, and boutique shops. The properties here are primarily Altbau apartments, which are pre-war buildings known for their high ceilings and ornate details.

These properties are in high demand due to their historic charm and the vibrant lifestyle the area offers. However, this also means that prices in this area are generally higher compared to other parts of Friedrichshain.

Another notable area is the vicinity of Simon-Dach-Straße, renowned for its lively street scene and artistic vibe. This area is similar to Boxhagener Platz in terms of property types and prices but offers a slightly different cultural experience, being known for its street art and alternative scene.

For those looking for up-and-coming areas, the vicinity of Ostkreuz station is worth considering. This area is undergoing significant development, with new residential projects and renovations of old buildings.

It's becoming increasingly popular among young professionals and families due to its improved amenities and the influx of new cafes and shops. The property prices here are currently more reasonable than in the central parts of Friedrichshain, but they are expected to rise as the area develops further.

On the contrary, the areas closer to Warschauer Straße, while having excellent connectivity and a vibrant nightlife, may not be advisable for everyone.

This area can be quite noisy and crowded, especially on weekends, which might not be ideal for those seeking a quieter living environment.

Additionally, the property prices here can be inflated due to the high demand from investors and short-term rental operators.

When deciding where to buy a property in Friedrichshain, consider your lifestyle preferences, budget, and long-term investment goals. Areas like Boxhagener Platz and Simon-Dach-Straße offer a quintessential Friedrichshain experience with a lively urban atmosphere but come with a higher price tag.

In contrast, areas like those around Ostkreuz offer potential for growth and more affordable options, albeit with ongoing development and changes.

Ultimately, the best area for you will depend on what you value most in a neighborhood whether it's being in the heart of a bustling area, enjoying the charm of historic buildings, or finding a balance between urban living and a more relaxed environment.

Each part of Friedrichshain has its unique appeal, and exploring these areas in person can help you make an informed decision.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Germany.

Area	Atmosphere	Property Types	Price Range	Notes
Boxhagener Platz	Lively, cultural	Altbau apartments	Higher	Historic charm, vibrant lifestyle
Simon-Dach-Straße	Artistic, vibrant	Altbau apartments	Higher	Known for street art and alternative scene
Ostkreuz	Developing, upcoming	Mix of old and new apartments	Moderate, rising	Undergoing development, increasingly popular
Warschauer Straße	Noisy, crowded	Varied	Varied, potentially higher	Active nightlife, not ideal for quiet living

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Is there a strong rental demand in Friedrichshain?

In Friedrichshain the rental market is indeed strong, characterized by a high demand that caters to both short-term and long-term rentals.

This demand is driven by various factors including the area's vibrant culture, its location in Berlin, and the diverse population it attracts.

Regarding short-term versus long-term rentals, there's a notable demand for both. Short-term rentals are popular among tourists and visitors attracted by Friedrichshain's renowned nightlife, cultural venues, and historical significance. Platforms like Airbnb often have numerous listings in the area.

On the other hand, long-term rentals cater to a more stable demographic, including young professionals, students, and expatriates, drawn by the area's dynamic lifestyle and employment opportunities in Berlin.

The target demographic for rentals in Friedrichshain is quite varied. Young professionals, often in the creative, tech, or startup industries, are a significant group. These individuals typically look for modern apartments with amenities that support a fast-paced, connected lifestyle.

Students and academics, drawn to the area's proximity to universities and research institutions, often seek more affordable, smaller apartments or shared living arrangements.

Expatriates, including both professionals and families, also form a substantial part of the tenant base, attracted by the area's cosmopolitan atmosphere and English-speaking community.

When it comes to property types, the demand is generally high for well-maintained Altbau (pre-war) apartments due to their historical charm and central locations.

However, there is also a growing interest in Neubau (new build) apartments, especially among those who prefer modern amenities.

Potential tenants usually look for features like good internet connectivity, modern kitchens and bathrooms, and, if possible, outdoor space such as a balcony or terrace.

Specific areas within Friedrichshain like Boxhagener Platz and Simon-Dach-Straße are particularly popular due to their lively atmosphere and proximity to various amenities like cafes, bars, and public transport. These areas are highly sought after for rentals.

To reduce vacancy and attract tenants, amenities like high-speed internet, modern appliances, proximity to public transportation, and access to local shops and entertainment venues are crucial. For short-term rentals, providing fully furnished options with flexible lease terms can be a significant draw.

Regarding the potential returns on investment for properties in this area, it varies but can be quite promising. Depending on the property's location, condition, and amenities, landlords can expect a decent yield.

Estimates for rental yields in Berlin's popular areas typically range from around 2% to 4%. Friedrichshain, with its high demand, can potentially offer yields towards the higher end of this spectrum, especially for well-located and well-furnished properties.

In terms of property types gaining more demand and potentially better yields, modernized Altbau apartments and new developments with energy-efficient features and modern amenities are on the rise.

These properties not only attract a wide range of tenants but also offer the potential for higher rental incomes and long-term value appreciation.

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Is it easy to buy a property as foreigner in Friedrichshain?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Germany.

Buying a property in Friedrichshain, Berlin as a foreigner is relatively straightforward, as Germany generally has an open property market.

There are no specific regulations or restrictions that apply exclusively to foreign buyers, which means that foreigners have the same rights and responsibilities as German citizens when it comes to property ownership.

The purchasing process in Friedrichshain is similar to other parts of Berlin and Germany. It typically involves the following steps; property search, making an offer, due diligence, signing a notarized purchase agreement, and finally, the transfer of ownership.

The process is legalistic and requires a notary's involvement, who plays a critical role in the transaction.

However, there are primary risks and potential pitfalls associated with property investment in Friedrichshain, as with any real estate market. One of the common mistakes is underestimating the additional costs involved in the purchase.

Such as notary fees, real estate transfer tax (Grunderwerbsteuer), and possibly a real estate agent's commission. These can add up to a significant percentage of the purchase price.

Another risk is not thoroughly researching the property and the area, which can lead to unexpected issues like building maintenance needs or less-than-ideal location attributes.

Unique to the German property market, and especially relevant in areas like Friedrichshain, is the potential for pre-emption rights (Vorkaufsrecht) by the municipality.

In some cases, the local authority may exercise its right to purchase a property if it's being sold, usually to preserve social housing or for urban development reasons. This doesn't happen frequently, but it's something to be aware of.

Working with a local real estate agent or lawyer can be very important, especially for foreign buyers who might not be familiar with the German property market and legal procedures.

A local expert can provide valuable insights into the market, assist with the negotiation process, and help navigate the legalities and paperwork involved.

Common exit strategies for property investors in Friedrichshain include selling the property after a period of appreciation, renting it out for income, or a combination of both. The choice of exit strategy largely depends on the investor's goals and the market conditions.

Given Friedrichshain's popularity and the steady growth in Berlin's real estate market, both strategies can be effective, although they come with their own set of considerations like property management for rentals or timing the market for a sale.