Immobilien: Kauf einer Mietwohnung – Das verdienen Vermieter tatsächlich

Many Germans fear receiving insufficient pension in their old age, leading them to explore alternative ways to secure income during retirement. Investing in rental properties in a multi-family house appears lucrative, as many high-net-worth individuals and family offices have been investing in real estate for years. However, a recent survey by the Owner Association Haus & Grund revealed that many private landlords only break even or even incur losses with their properties.

So, how lucrative is it to rent out a multi-family house in the current environment of rent regulations, high property prices, and rising interest rates? Here are three example calculations and a costly mistake to avoid when purchasing a property for rental income.

The biggest mistake when purchasing a property as an investment is setting one's own standards for evaluation, says Jürgen Michael Schick, Managing Director of Schick Immobilien in Berlin and Honorary President of the IVD Real Estate Agents Association. He explains that if a buyer wonders whether they would feel comfortable living there themselves, their children could move in, and if they personally like the neighborhood, they have made a costly error.

This is because such a buyer may choose a district that is too expensive, resulting in a property that costs more than necessary. According to the expert, a simple to medium-sized house in an average location provides a good return on investment, while top locations usually come with top prices. Investors often focus on luxury and aesthetics rather than profitability, warns real estate investor Gerald Hörhan, who calls himself "Investmentpunk".

Small, simple apartments in functional locations offer precisely what matters: predictable rental income, solid demand, and manageable risks. Buyers should consider whether the location is suitable, the building is in good condition, and the city has a positive outlook on population growth, but they should not base their purchase decision solely on personal taste.

Schick advises that buyers should seek a property in a location not too far from their private residence, ideally within 100 kilometers. This minimizes the risk of making a wrong decision when purchasing.

Three example calculations and a costly mistake to avoid when purchasing a property for rental income:

Example Calculation 1 (6.25% return on equity):

The experts Schick and Hörhan created three model calculations for buying a multi-family house and renting it out. The hypothetical house is located in a German major city away from the largest metropolises, with a purchase price of one million euros, and annual net rent is 44,000, 55,000, or 61,000 euros. These rental incomes reflect three different cost levels: the first costs see the house with all purchase costs at 25 times the annual net rent, the second at 20, and the third at 18.

In this example, the calculations show the factor of 20, which is said to apply to most German major cities. The calculations for the other factors are in the graphic. From the net rent, the landlord must also cover maintenance and repair costs, which are set at 11,000 euros in all scenarios and are not passed on to tenants. Possible value increases from rising rental incomes were not considered, nor were tax-deductible special write-offs, as these only apply to new buildings.

A ten-year timeframe was chosen. After ten years, the property is not yet fully paid off, but the ten-year hold period expires, making any profit from selling the property tax-free.

Modelling Calculation 1: Rendite for 200,000 euros of equity:

In this calculation, it is assumed that the buyer brings around 200,000 euros of their own capital, with 900,000 euros to be financed. With an annual interest rate of 3.5 percent and an annual amortization of 1.5 percent, the buyer must generate 31,500 euros annually in interest payments and 13,500 euros in amortization costs. After deducting these costs, the buyer receives a net annual rent of 55,000 euros, of which 11,000 euros are not deductible from tenant costs.

This leaves 44,000 euros in net profit. Subtracting the annual interest payment of 31,500 euros leaves a profit of 12,500 euros on the equity investment. The return on equity is therefore 6.25 percent. However, when conservatively considering the amortization costs of 13,500 euros, the landlord's expenses increase to 45,000 euros, resulting in a net loss of 2,500 euros in the first ten years.

While the buyer still benefits from the increasing share of the property's value, this may only be realized upon sale.