All Forum Posts by: John Stanley

So what am I missing here? If I have a year with higher expense and have 0 cash flow, I still have to pay taxes out of pocket on 14,000€ income? This 14k then raises my overall tax bracket and I have to pay higher tax on my day job income as well.

I'd like a sanity check on my math. Am I estimating the taxable amount correctly? I'm in Germany where we can depreciate property 2% per year. This is a bit disappointing because the taxes will eat up most of the profit which I plan to save for capital expenses in the future.

Purchase price € 1,000,000
2% of price (depreciation) € 20,000
principal paid p.a. € 27,000
interest paid p.a. € 16,000
rental income € 60,000
costs € 10,000

taxable amount € 14,000 (=rental income - depreciation - interest - costs)
actual profit € 7,000 (=rental income - principal - interest - costs)

Thanks Bassit. I'm wading through all this now and will eventually have an accountant on both sides of the pond. I already file an FBAR. 

Thanks so much for the detailed response. My plan is to buy a property here in Germany so I can have better oversight. It will have positive cash flow so all owner expenses, including the mortgage, are covered by rental income. The plan is to rent it out for ten years, at which point German law allows a sale without any capital gains tax, then use the profits to buy more properties. I think depreciation (2% per year of purchase price allowed) will likely exceed net income so I should have paper losses until selling in year 11.

From what I have seen so far, building here are always owned by an LLC (GmbH here). My main purpose to hold it in an entity is to shield myself from personal liability and protect my other assets in case something goes sour, but this is just my initial thought.

Hi everyone,

I'm a US citizen living in Germany (with local residency). I'm looking at buying an investment property and need to decide whether to do it as a US or German company. Does anyone have insight into the pros and cons of each from a tax/legal perspective? I'm starting to research double taxation treaties now but there are other considerations like "controlled foreign corporations" laws that I'm not familiar with yet. What's your experience?

 Thanks! I had a look through one of GC's PPM's and found the details:

Fees Paid to the Manager in Conjunction with the Acquisition and Disposition of the Asset and Management of this
Entity:
Annual Asset Management Fee: one percent (1%) of capital under management calculated and paid quarterly
Asset Acquisition Fee: one percent (1%) of the purchase price of real estate asset
Asset Disposition Fee: one percent (1%) of the sale price of real estate asset
Participation: thirty-five percent (35%) of net distributable profit from operations subject to payment of Class A Preferred Return
and Member distributions per the Operating Agreement.

Could you guys help me clear up GC (or syndicators in general) fees? When they say 1% each for acquisition, management, and disposal, what is that 1% of? Is it of the total invested by each person? Or just of profits? Or...?

Hi everyone,

I'm also now researching the German market. I'm in the Stuttgart area and what I have found so far is that it's difficult to get any positive CoC because rental rates are so low compared to purchase prices. However, interest rates are so low now. It seems the goal is to hold for 10 years, then sell and profit on the back end without capital gains tax. @Kristoffer Ruohonen where in B-W are you? It would be great to chat.