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A guest article by Henry Werner & Franz Sattler

Various reasons move people like you to find out more about the possibility of “buying and renting an apartment”. Whether protection against inflation, as an addition to your current investment portfolio, to save taxes or just to expand your knowledge.

In times of persistently low interest rates, real assets are increasingly coming into focus. They should be in everyone’s portfolio somewhere. There are many real assets: gold, silver and other precious and industrial metals, vintage cars, art, real estate and … the rented property. This is exactly what this article is about.

In this article you will learn how the concept of “buying and renting an apartment” works, what advantages it has for you and also how exactly you can implement such a project.

Structure of the expert article “Buying and renting an apartment”

Definition of the concept “Buy and rent an apartment”

Why renting a property pays off better

What do you have to consider when choosing the apartment to rent?


Common questions

Definition of the concept “Buy and rent an apartment”

One can differentiate between two basic types of real estate. The owner-occupied property is the more frequently used one. The name “self-used” is self-explanatory: You buy an apartment or a house and move into it yourself.

If you buy an apartment that you then rent out, one speaks of a rented property or investment property or investment property.

Which of the two should I invest in?

There is no “right” answer to this question. It depends on what type of investor you are. Basically, it is always great from a “gut feeling” to live in your own property. But don’t be fooled by the argument that you will then live rent-free in old age! An apartment needs regular maintenance. The costs for this are often massively underestimated!

If you want to answer this question from a profit point of view, the answer is clear! The rented property pays off better (provided, of course, you pay attention to important things when buying).

Why renting a property pays off better

Below you will find out the reasons why renting a property pays off better for you in the end.

Feel-good factor

If you buy a self-sufficient property, everything has to fit! The sun has to shine in the bedroom in the morning, a meadow has to be in front of the door to be able to walk with the dog, the bathroom has to have a bathtub AND a shower. The feel-good factor has to be right and of course you like to spend more money on it. From the point of view of the return rather disadvantageous.


In addition, you would like to live in a detached family house or at least in smaller properties. The smaller the community of owners, the more expensive the maintenance is for you! Here is an example: We assume that the roof needs to be renovated. Who pays for the new roof in your owner-occupied family home? You! And 100%!

If you have built a little more height and another apartment in the converted attic that is rented, the roof is just as big. The costs are the same, but shared by 2 owners. True to the motto “The roof doesn’t know how many people live under it”.

As a capital investor, you are more likely to buy rented properties in large owner associations. That is not always nice for the eye – the maintenance is therefore all the cheaper! Everyone would like to live in a detached house with a large plot of land. But most of them can’t! In metropolises in particular, the majority of people live in large properties with many apartments. This is where the demand is highest and the return is better at the same time. The following applies: Always put on investor glasses when buying a rented property! You don’t have to move in yourself!


With rented property you can claim significantly more tax than with owner-occupied property. The most noticeable here are probably the interest on the financing, which is fully recognized as an expense in the tax return for the property as retirement provision. Every investment in the rented property is tax deductible! Trips to the apartment or to the owners’ meeting, as well as administrative costs, are tax-relevant. The tax advantage that results from this should not be underestimated and, in the area of “tax”, sets the rented property apart from owner-occupied property.

What do you have to consider when choosing the apartment to rent?

Next you will learn how buying a property works in practice and what you can expect as a landlord.

First of all, you should check with your trusted banker whether your current financial situation is suitable to finance a property in whole or in part. And if so, how much would the bank loan you?

You can use the following criteria to search for the right property.

The community of owners should be in good financial shape

This is either the case when the renovation status is very good or when the community’s maintenance reserve is full! So don’t choose the object by appearance! Sometimes less beautiful properties with full reserves are better. When you buy an apartment, you buy into the community and thus also into the reserves. A nice side effect: Imagine buying an apartment in an ugly building with full reserves. After the purchase, the roof, facade, electrics and heating will be renovated and the money will be completely taken from the reserve that you bought into. The costs are arithmetically divided between the owners. If your apartment accounts for € 20,000, you can state this € 20,000 as an expense in your tax return – although this comes from the reserve of the owners’ association! Therefore, “ugly” properties are not necessarily the worse ones.

Read the minutes of the last three owners’ meetings to see what has been discussed over the past 3 years.

Pay attention to the ownership structure

In one property you buy an apartment of 10 and the other 9 apartments belong one Owner, the other decides EVERYTHING! When will what be redeveloped, which company redevelops for what price, a caretaker is hired and how many garbage cans are in the yard. How often does the cleaning company wipe the hallway and and and …

Buy in the right location

Tenant demand must be given at all times, including in the long term!

There is no such thing as THE right choice of location. Buying an apartment building in the country for a cheap price can be just as good an investment as buying a single condominium for old-age provision in a German metropolis like Frankfurt, Munich or Hamburg.

The question is: which concept suits you better?

Is important to you

  • to keep the administrative effort as low as possible after purchase?
  • not having to calculate rent losses?
  • To be able to choose the “perfect” tenant from many rental inquiries when letting a new one?

Then the metropolis is probably your option.

  • Is it important to you that you buy as cheaply as possible?
  • Do you enjoy looking after your retirement home yourself?

Then you should buy near where you live.

Don’t buy emotionally

You don’t want to move in yourself, never forget that! Would you never live on the ground floor yourself? No matter! Older people prefer to climb a few stairs. Are you dying to have a bathtub in the bathroom? No matter! Others prefer to shower. So remember to put on your investor glasses.

Once you have found the right property and the bank has agreed to finance it, you should of course visit the apartment! Here you also have the opportunity to get to know your future tenant.

Now you can go to the notary to sign the sales contract.

Expiry after buying the apartment

A few weeks later the bank pays the purchase price to the seller and you become the owner! From this point on you are entitled to the rent, but you can also do it Landlord’s Obligations over to you. This includes a certain availability for your tenant and the preparation of the utility bill once a year. The effort can be minimized as far as possible by outsourcing these obligations to an administration. In technical jargon, this is called “management of private property”. Private property is everything that belongs to the community alone and not to the community. So your apartment, your basement and possibly a parking space. The tenant then does not call you when the tap drips on Sundays, but rather the authorized administration. Many administrations then also take over the re-letting of your apartment if there is a change of tenant.


Now you know how the concept “buy and rent an apartment” works. Here it is the same as with complex insurance . If you are not an expert in the field yourself, it makes sense to get a professional at your side for such a long-term investment.

You can use the contact form below to send a non-binding request send and you in one free initial consultation with a Experts | inform about your individual options. There are no costs for you. Through the Online advice It doesn’t matter where you live in Germany.

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    Common questions to “Buy and rent an apartment”

    Is it worth investing in care properties?

    Opinions differ here. A large part of the care costs is currently covered by the state, i.e. the statutory long-term care insurance. The cost of care has exploded in recent years due to demographic change. The pension and care pots are empty, fewer and fewer workers have to finance more and more pensioners and those in need of care. If there are cuts in care services (which has to happen when looking at the numbers soberly), the trend towards home care will presumably intensify and the demand for care homes / care properties will decrease. Anyone who considers our state’s budget to be rock solid in the long term for the coming decades can think about investing in nursing homes.

    What are ancillary acquisition costs?

    Ancillary acquisition costs are incurred with every property purchase in Germany. These include: costs for notary and land registry (around 2% of the purchase price)
    Costs for the broker (if any, usually 7.14%)
    Real estate transfer tax (depending on the federal state 3.5 %-6,5% the purchase price)

    How much equity do I need to buy?

    That depends very much on the financing bank and your financial situation. Many banks want you to at least pay the incidental acquisition costs from your own funds. One then speaks of 100% financing. There are also banks that finance 108%, i.e. the purchase price plus additional costs. A property purchase without equity is therefore possible.

    Buying and renting an apartment – why doesn’t everyone do it when it’s so great?

    On the one hand, many of our fellow human beings do not have the financial situation to get a loan from the bank. On the other hand, there is often a lack of know-how for this investment area (real estate is only for the rich). Fear of too much administrative effort plays just as important a role as the gut feeling about taking out a six-figure loan from the bank (typical German mentality: “You don’t get into debt”. Unfortunately, there is seldom a distinction between consumer waste and investments.)

    I have equity – what percentage of the purchase price should I finance?

    Interest rates have never been lower than they are today. So it definitely makes sense to finance part of the purchase price, even if the property could be financed entirely from your own funds. It can therefore make sense to finance two properties at 50% with a bank than to pay for one property at 100% yourself. Of course, the answer to this question again depends on the individual case.

    What if the nationwide rent cap comes?

    One thing in advance: The rent cap is currently only decided in Berlin. Whether this is legal has not even been clarified. Tenancy law is a federal matter and took the initiative years ago to counter sharply rising rents by introducing a rent brake. At that time, a conscious decision was made against a nationwide rent cap. The state of Berlin does not even have the competence to introduce a rent cap. The possibility of a nationwide rent cap should still influence the location of your property. In one location, a rent cap would have a greater impact than in another.

    Rent cover is not a KO criterion

    Rising rents are a luxury problem for landlords. If the property pays off well without increasing rents, you are on the safe side. It is rather unlikely that rents will not increase in the long term. Politicians will sooner or later recognize that a rent cap does not increase the supply of apartments and thus does not have the desired effect.

    How do I protect myself against loss of rent?

    An important point is the conscientious selection of the tenant. Despite the best choice, it can happen that the tenant does not pay his rent because, for example, he becomes seriously ill, his salary is lost and he can no longer afford the rent. You can protect yourself against this scenario by taking out rental loss insurance. Then the insurance continues to pay the rent.
    Another option is the tenant pool. Imagine you have one of 30 apartments in a community. All rents go into one large pot (the pool) and are then distributed (depending on the size of the individual apartments). If a tenant does not pay his rent, the rent loss is shared among all 30 owners. So the risk is spread.

    When can I sell the apartment again?

    At any time! The apartment is yours and you decide when to sell! However, an early sale can result in a loss. If you redeem the loan at the bank early, you usually have to pay early repayment penalties. (There are only a few banks that waive this compensation) You will also pay taxes on profits on sales within the first 10 years.
    The good news is hidden here at the same time: After 10 years, the profit from the sale of your property is TAX FREE!

    What will it cost me to buy an apartment to rent out?

    That again depends on the individual case. How soon do you want to repay the loan? What interest do you get at the bank?
    As a rule, you don’t pay more than € 200-250 a month (so-called underfunding). The shortfall decreases every time the rent increases. So often every year.

    What if interest rates go up again?

    Interest rates are historically low and will rise again sooner or later. You have to protect yourself against this risk. How you do this depends on the individual case. You can arrange a long fixed interest rate with the bank. You can also hedge the interest rate risk with a home loan and savings contract. And last but not least, you can also minimize the interest rate risk with a high repayment rate (quick repayment of the loan). Or you can build up assets at the same time in order to repay a large part of the outstanding loan in the event of a high interest rate after the fixed interest rate.