Buying an apartment building: Valuation & investment

Compared to single-family homes and condominiums, multi-family homes offer greater investment stability. With several residential units, you spread the risk of rent losses and benefit from a continuous cash flow. However, it is important that you have the property professionally valued so that you neither buy too expensively nor overlook hidden risks.

PS: First investment? Here are 4 tips for your first investment with video.

Real estate valuation: What is important?

The valuation of a property is not only based on square meters and year of construction. Factors such as location (macro and micro), energy status, condition of the roof, pipes and heating, as well as rental contracts, vacancies and development potential are decisive. A rough online estimate is not enough here – it is better to have a valuation report drawn up or use professional valuation models with comparable properties.

• Valuate property

Reminder! Location, annual net cold rent + purchase price: This is how you can quickly evaluate an apartment building.

Recognize value enhancement & exploit potential

Are you looking for properties with development opportunities? Then look out for attics that can be converted, vacant properties that can be renovated or properties with potential for redensification. Converting to modern heating systems or adding balconies can also significantly increase the value. The decisive factor is cost-effectiveness: calculate each measure and compare it with the potential increase in rent or value.

Relationship between price, location and yield

In sought-after locations(A-locations, good B-locations), the purchase price is higher and the rental yield is usually lower. In structurally weak regions, you pay less – but also with a higher vacancy risk. The optimal balance lies in growing medium-sized cities with good infrastructure, stable demand and moderate prices. Pay attention to micro-location, transport links and demographics.

• A, B and C position

Calculate rental yield & value correctly

The gross rental yield shows you what percentage of the purchase price you will achieve annually through rental income. It is calculated very simply: annual net cold rent divided by the purchase price, multiplied by 100. A solid gross yield for apartment buildings is between 6 and 9 percent – lower in prime locations and often higher in structurally weak areas. But be careful: a high yield in a poor location can be deceptive if resale is problematic.

Annual net rent ÷ purchase price × 100 = gross rental yield

• Rental yield vs purchase price factor

Refurbishment property or fully let?

Refurbish & re-let

Buying a house in need of renovation can be worthwhile – if the location and substance are right. If you renovate efficiently, you can then rent it out again – at higher prices and to modern standards. In the case of vacant properties, make sure that there are no tenancies and find out about the renovation costs and possible subsidies in advance.

Fully let properties: Security & immediate income

A property that is already fully let generates income from day one. You should check all rental agreements here: Term, rent amount, indexation, graduated rents, notice periods. You should also ask for the tenants’ payment history. A mixed tenant structure without rent arrears is ideal.

Important: Tenancy law & limits of termination

You cannot give notice or raise the rent at will. Terminations are only permitted for personal use or breach of duty. Rent increases are limited by law – additional regulations apply in regions with rent control. Refurbishment costs may only be apportioned proportionately. Plan these aspects carefully.

Purchase contract & legal basis

Notary & contract review

The purchase contract is drawn up by the notary and must be notarized. The notary acts as a neutral third party and ensures that all legal conditions are met. You will receive a draft contract in advance, which you should check with your advisor or lawyer. At the notarization appointment, the contract is read aloud and any unanswered questions are clarified.

Land register, transfer of ownership & priority notice of conveyance

With the notarization, the purchase is legally binding – but you are not yet the owner. The transfer of ownership only takes place with the entry in the land register. Before this, a so-called priority notice of conveyance is entered to secure you. Prerequisite: The purchase price must be paid and the land transfer tax paid.

• Real estate purchase agreement

Taxes & ancillary purchase costs at a glance

Real estate transfer tax & ancillary costs

When buying a property, there are additional costs on top of the purchase price: Land transfer tax, notary fees, entry in the land register and, if applicable, estate agent’s commission. Depending on the federal state, these amount to 10 to 15 percent of the purchase price and usually have to be paid from equity. Sound financial planning takes these items into account from the outset.

• Real estate transfer tax

Real estate GmbH & family foundation

For larger portfolios, it is worth structuring via an asset-managing GmbH or a family foundation. This allows you to benefit from tax advantages – for example in the event of inheritance or sale after the speculation period. However, the establishment and ongoing administration require good tax and legal advice.

• Real Estate Ltd.
• Family foundation

Letting: Tenants, contracts & income

Successful letting starts with selecting the right tenants. In addition to creditworthiness and credit rating, personal impressions are also important. A clear, legally secure rental agreement protects both parties. The rent is based on the rent index, but must also match the furnishings and location. Pay attention to mandatory details such as operating costs, house rules, notice periods and rent adjustment clauses.

• Renting out a house & apartment

Conclusion: Strategy for success

An apartment building is not a short-term deal – it is a long-term investment that needs to be well planned. Anyone who knows the market, calculates the right key figures and strives for a legally compliant transaction will create a stable source of income and increase their assets in the long term. Take advantage of professional advice – for valuation, purchase, refurbishment or letting. This will help you avoid mistakes and ensure long-term success.

If you’re looking to invest in Germany’s thriving real estate market, Lukinski has you covered. From guides to German inheritance law, tax optimization, additional costs and hidden purchase fees, renovation, and the list goes on. Want to delegate the work? As German real estate experts, we can be your man on the ground:

• Realtor, Agent, and Advisor: Lukinski

Germany’s Second City

Munich counts itself to one of Germany’s economic capitals. It is also famous for its high quality of life and surrounding nature. The alps for skiing or hiking, as well as countless lakes for summer activities, are all nearby, not to mention the italian coast just to the south. Nowadays it is Germany’s third-largest city with some 1,5 million inhabitants. It has a very low unemployment rate, strong technology and science sector, as well as increasing popularity for startups, not to mention its everstrong automotive and aviation industries.

Munich Real Estate Market Explained

Munich’s real estate sector is characterized by strong demand and low supply. This is also unlikely to change, with little construction being done within city limits. Munich is also the most expensive city for real estate in Germany. The average prices for single- or double-family residences are around €1.3 mil. (almost twice as high as any other city in Germany) and for apartments around €450.000, also higher than in any other city in Germany.

Buy or Rent in Munich?

If you’re thinking about investing in Munich’s real estate, the question about rent or buy is probably in focus. The recommendation here is clear: Buy or, when possible, build. In recent years, the development has been towards low interest rate on mortgages. This means you’re likely to lose money renting, as opposed to buying, when looking at one property. Furthermore, with the inner city filling up, and with the market extremely tense, the best option is likely to invest in the outer parts of the city. Comparing the buying price and yearly rent in these parts shows that the ratio here is good. Most importantly though, the price is increasing, meaning that your investment will likely pay off. In these regions you’ll find prices like:

• Buy: 5.600 €/m²
• Rent: 16,34 €/m²

Prices Layout for Residentials

With the go-to being near the outer parts of the city, and with Munich being a family-friendly city, the prices for single- or double-family residences give a good indication of the market. These are, in €/m²

• Very Good – €1.550.000-€16.000.000 (increasing)
• Good – €1.300.000-€3.100.000 (increasing)
• Mediocre – €700.000-€1.800.000 (increasing)
• Simple – €500.000-€1.300.000 (steady)

Buy in Munich

First we take a detailed look at current statistics for buyers. Here you will find a lot of information, from the purchase price for a newly built condominium to tips for renting property. We will also take a look at two important issues: buying in Munich and the danger of a real estate bubble Munich.

1. Purchase price for newly built condominium
2. Purchase price development since 2010
3. Highest real estate loans in Munich
4. Munich real estate bubble?
5. Buy in Munich
6. Number of sales of luxury homes
7. Let the property

Munich’s city centre with its famous church.

Purchase price for newly built condominium

Purchase price for newly constructed condominiums in Munich from 2009 to 2019 (in euros per square meter). From 2009 to 2019, the price per square metre for an ETW (new building) rose from 3,400 euros / square metre to 8,100 euros / square metre. An increase of 4,700 euros / square metre, a whole + 138.2% in just 10 years. Will the situation remain tense? Read our analysis with current facts and figures.

More statistics can be found at Statista

Purchase price development since 2010

Already 10 years ago Munich had a significantly higher price level for the purchase of real estate. The development continued. Here you can see a comparison of the purchase price of condominiums in Munich 10 years ago with the whole of Germany in the 1st quarter of 2010 and 2011 (in Euro per m²)

Munich

• Munich, cut: 3.538 Euro / square meter
• 1st quarter 2010: 3,396 euros / square meter
• Increase Q1 2011: 3,680 Euro / square meter

On average higher purchase price at the turn of the year 10 years ago:

+123.78 % purchase price (see Germany)

Germany (comparison)

• Germany, cut: 1,581 Euro / square meter
• 1st quarter 2010: 1,519 euros / square meter
• Increase Q1 2011: 1,643 Euro / square meter

More statistics can be found at Statista

Buying in Bavaria since 2010

Purchase prices for residential real estate in Bavaria by cities in the first half of 2011 (in EUR 1,000).

• Seihenhaus (blue)
• One-family house (dark blue)

More statistics can be found at Statista

Highest real estate loans in Munich

The chart shows a ranking according to highest average mortgage loan in the 20 largest cities in Germany based on a current evaluation of the comparison platform Check24. Loans of 500,000 euros are compared here, for 101 square metres of living space.

1. Munich – 504,000 Euros
2. Frankfurt – 417,000 Euro
3. Hamburg – 384,000 Euros
4. …

More statistics can be found at Statista

Real estate bubble Munich?

The chart shows the risk of a real estate bubble by index value in selected major cities worldwide. The UBS Global Real Estate Bubble Index places the real estate market in a long-term perspective and aims to track the risk of real estate bubbles in global cities. The index examined 24 major cities. Munich ranks first in the survey.

More statistics can be found at Statista

Where is it worth buying? comparison

Where is it worth buying a property (house, semi-detached house, condominium, etc.)? In comparison, one sees the potential that lies dormant above all in NRW and Hessen. This chart shows the cost advantages of home ownership compared to rents in German metropolitan areas in 2018.

1. Düsseldorf with 53.8%
2. Cologne with 53.6%
3. Frankfurt with 50.1%
4. Stuttgart with 44.0%
5. Leipzig with 41.8%
6. Munich with 37.6%
7. Hamburg with 35.0%
8. Berlin with 26.9%

More statistics can be found at Statista

Exclusive houses and designer homes in Munich.

Exclusive freehold flat, in the middle of the Viktualienmarkt.

Number of sales of luxury homes

How many luxury properties are sold and bought in Germany each year? These statistics show how manageable the market is. Here you can see the number of sales of luxury homes in selected cities in Germany.

More statistics can be found at Statista

Data show for visualization last survey in the 1st half of 2010 and 2011.

Are there enough apartments built?

You can live in your own property yourself or you can rent it out. With the current housing shortage, this is a good prerequisite for increasing rental income. Because as always, supply and demand. The chart shows the share of annual building completions in 2016-2018 in the annual demand in the period 2016-2020.

1. Hamburg and Düsseldorf Coverage / year at 86%
2. Frankfurt am Main Coverage / year at 78%
3. Berlin coverage / year at 73%
4. Munich Coverage / year at 67%
5. Stuttgart Coverage / year at 56%
6. Cologne Coverage / year at 46%

More statistics can be found at Statista

Rent

1. Rental price for the perfect apartment
2. Housing market: Current requests and offers
3. Reality Check: Prices for first time rentals
4. Residential building in Munich
5. Service charges in comparison
6. Rent a commercial property
7. Rent office: Free areas and practices
8. Rent office: compare prices

Rental price for the perfect apartment

As with the purchase of real estate, Munich is also at the top of the German-wide comparison of average rents. The chart shows the average rent for an apartment with 3 to 4 rooms (81 to 105 sqm).

1. Munich – 1.500 Euro / month
2. Frankfurt – 1.170 Euro / month
3. Stuttgart – 1.080 Euro / month
4. Hamburg – 1.030 Euro / month
5. Düsseldorf – 900 Euro / month
6. …

More statistics can be found at Statista

Home market: Current requests and offers

The chart shows requests and offers for rental apartments in the 14 largest cities in Germany. 150,000 advertisements for rental apartments and the corresponding contact enquiries were evaluated.

More statistics can be found at Statista

Reality Check: Prices for first time rentals

The chart shows the cold rents for first-time rentals in top 7 cities per square metre.

1. Munich from 12.96 Euro to 17.42 Euro (+ 4.46 Euro)
2. Stuttgart from 10.00 Euro to 14.21 Euro (+ 4.21 Euro)
3. Frankfurt from 11.57 Euro to 14.18 Euro (+ 3.01 Euro)
4. Hamburg from 12.00 Euro to 13.16 Euro (+ 1.16 Euro)
5. Düsseldorf from 8.62 Euro to 12.55 Euro (+ 3.93 Euro)
6. Berlin from 7.05 Euro to 12.40 Euro (+ 5.35 Euro)
7. Cologne from 9.12 Euro to 12.39 Euro (+ 2.59 Euro)
8. Comparable value: Germany from EUR 6.99 to EUR 9.58 (+ EUR 2.59)

More statistics can be found at Statista

Residential building in Munich

Number of residential buildings in Munich in the years from 1980 to 2018 (in 1,000). The changes at a glance. Residential buildings increase in the last 10 years (2008 – 2018):

+ 9,000 residential units (+ 6.7%)

Residential buildings increase in the last 38 years (1980 – 2018), since survey:

+ 35,300 residential units (+ 32.9%)

More statistics can be found at Statista

Service charges in comparison

The chart shows the total ancillary housing costs per year for a three-person household (in euros). The average in Germany is EUR 1,900.84 per year. The cheapest cities for ancillary costs are:

1. Munich – 1.643,00 Euro / year (257,84 Euro less)
2. Mainz – 1,686.02 Euro / year
3. Hamburg – 1,682.40 Euro / year
4. Kiel – 1.682,40 Euro / year
5. Stuttgart – 1,729.74 Euro / year

More statistics can be found at Statista

Commercial property rent

Location is everything! Especially for entrepreneurs and companies. In all major cities the rents for commercial properties are rising, only in Berlin the costs for the monthly rent are getting cheaper, and that in the best location. This chart shows the indexed costs for commercial real estate in the largest cities in Germany (Hamburg, Cologne, Frankfurt, Munich and Berlin) in comparison. A joint index takes into account shop rents in prime locations, shop rents in secondary centres, office rents in city centres and the prices for commercial properties.

1. Hamburg
2. Cologne
3. Frankfurt
4. Munich
5. Berlin

More statistics can be found at Statista

Rent office: Free areas and practices

Finding the perfect office – How does Munich compare to other German cities? How many free spaces and practices are there in relation to Stuttgart, Hamburg, Berlin & Co. This chart shows the proportion of vacant office space as a proportion of total office space in selected German cities in 2018.

1. Frankfurt am Main – 6.8% free / 93.2% rented
2. Düsseldorf – 6.4% vacant / 93.6% rented
3. Hamburg – 3.6% vacant / 96.4% rented
4. Cologne – 2.8% free / 97.2% rented
5. Stuttgart – 2.3% free / 97.7% rented
6. Munich – 1.8% free / 98.2% rented
7. Berlin – 1.5% free / 98.5% rented

More statistics can be found at Statista

Rent office: Prices in comparison

Where are office rents currently highest? Munich is at the top of the league, with current average office rents of 39.50 euros / m² and thus second place in the ranking of office rents in Germany. Here you can see the top rents for office space in German cities.

1. Frankfurt – 45.50 Euro / m² (+ 23.1%)
2. Berlin – 39.90 Euro / m² (+ 44.9%)
3. Munich – 39.50 Euro / m² (+ 24.6%)
4. Hamburg – 29.00 Euro / m² (+ 19.0%)
5. Düsseldorf – 28.50 Euro / m² (+ 19.3%)
6. Cologne – 25.50 Euro / m² (+ 20.4%)
7. Stuttgart – 24.00 Euro / m² (+ 21.7%)

More statistics can be found at Statista

Munich at sunset.

The romantic and typically European, Bavarian city centre.

Living, economy, city and inhabitants

1. City Map of Munich
2. Private households: Forecast until 2030 in Bavaria
3. Munich is family-friendly
4. Comparison: Munich, Hamburg, Cologne and Berlin

City map Munich

Private households: forecast until 2030

How is Munich developing as a city and in Bavaria as a federal state? Here you can see the number of private households in Germany by federal state in 2018 and forecast for 2030 (in 1,000). This is an optimal situation for landlords as the demand for living space increases.

More statistics can be found at Statista

Munich is family-friendly

Do you consider your city to be family-friendly?

1. Stuttgart – 65%
2. Dortmund – 63%
3. Bremen – 61%
4. Hamburg – 60%
5. Cologne – 60%
6. Dusseldorf – 57%
7. Munich – 56%
8. Frankfurt – 51%
9. Berlin – 48%
10. Essen- 41%

More statistics can be found at Statista

Comparison: Munich, Hamburg, Cologne and Berlin

Where do most of the inhabitants live? Here you see visualized, the 4 biggest cities in Germany. The graph shows the number of inhabitants in the German megacities on 31 December 2018, at the turn of the year 2018 / 2019.

• Berlin – 3,644,826 inhabitants
• Hamburg – 1,841,179 inhabitants (- 1,625,647 cf. Berlin)
• Munich – 1,471,508 inhabitants (- 2,173,318 see Berlin)
• Cologne – 1,085,664 inhabitants (- 2,559,162 cf. Berlin)

More statistics can be found at Statista

Buy in Germany

Tip! Read more about Buy an apartment: The 10 most expensive German cities.

• Ranking: Square meter prices for condominiums
• House price index: development of house prices
• Development of construction investments in Germany
• Ownership ratio in Germany

Ranking: Square meter prices for condominiums

Cities with the highest prices per square meter for condominiums in 2015 and 2019 (in euros per square meter).

1. Munich – 8,993 Euro / square meter
2. Frankfurt am Main – 6,701 Euro / square meter
3. Stuttgart – 6,324 Euro / square meter
4. Potsdam – 6.1.64 Euro / square meter
5. Berlin – 5.578 Euro / square meter
6. Hamburg – 5,507 Euro / square meter
7. Düsseldorf – 5,470 Euro / square meter
8. Erlangen – 5.416 Euro / square meter
9. Regensburg – 5.411 Euro / square meter
10. Freiburg im Breisgau – 5,349 Euro / square meter

More statistics can be found at Statista

House price index: development of house prices

Development of house prices in Germany in the years from 2000 to 2018 (2015 = Index 100).

More statistics can be found at Statista

Development of construction investments in Germany

Development of construction investments in Germany in the years 2000 to 2016 (compared to previous year).

More statistics can be found at Statista

Ownership ratio in Germany

Ownership rate in Germany in the period from 1998 to 2018 by Länder

All further information on statistics can be found at Statista

Rentals in Germany

Tip! Read more about Rent an apartment: The 10 most expensive German cities.

1. Development of the rental price index
2. Ranking: Rents for apartments
3. Number of newly constructed residential buildings

Development of the rental price index

Development of the rent price index for Germany in the years from 1995 to 2019 (2015 = Index 100)

More statistics can be found at Statista

Ranking: Rents for apartments

Cities with the highest rental prices for apartments in Germany in the 4th quarter of 2019(in euros per square metre)

More statistics can be found at Statista

Number of newly constructed residential buildings

New construction: Where are new apartments being built? Number of newly constructed residential buildings in Germany by federal state in 2017 and 2018 (in 1,000).

Premium or luxury property? Read more: Realtor Stuttgart

Buy in Stuttgart

First we take a detailed look at current statistics for buyers. Here you will find a lot of information, from the purchase price for a newly built condominium to tips for renting property.

1. Buying in Stuttgart?
2. Development of property prices (10 years)
3. Number of sales of luxury homes
4. Let the property

If you’re looking to invest in Germany’s thriving real estate market, Lukinski has you covered. From guides to German inheritance law, tax optimization, additional costs and hidden purchase fees, renovation, and the list goes on. Want to delegate the work? As German real estate experts, we can be your man on the ground:

• Realtor, Agent, and Advisor: Lukinski

Where is it Worth Buying? Comparison

Where is it worth buying a property (house, semi-detached house, condominium, etc.)? In comparison, one sees the potential that lies dormant above all in NRW and Hessen. This chart shows the cost advantages of home ownership compared to rents in German metropolitan areas in 2018.

1. Düsseldorf with 53.8%
2. Cologne with 53.6%
3. Frankfurt with 50.1%
4. Stuttgart with 44.0%
5. Leipzig with 41.8%
6. Munich with 37.6%
7. Hamburg with 35.0%
8. Berlin with 26.9%

Development of Real Estate Prices (10 years)

Many are interested not only in current prices, but also in the development of values. The 10-year review is very helpful in this case. Therefore, we have here for you a statistic from 2011 about purchase prices for residential properties in Saarland and Baden-Württemberg by cities in the first half of 2011.

• Stuttgart – Terraced house 467.821 Euro / single family house 685.941 EUro
• …
• Freiburg – terraced house 431.528 Euro / single family house 562.552 Euro
• Friedrichshafen – terraced house 328.278 Euro / single family house 476.439 Euro
• Heidelberg – row house 376.731 Euro / single family house 549.292 Euro

Number of Sales of Luxury Homes

How many luxury properties are sold and bought in Germany each year? These statistics show how manageable the market is. Here you can see the number of sales of luxury homes in selected cities in Germany.

Data show for visualization last survey in the 1st half of 2010 and 2011.

Are there Enough Apartments?

You can live in your own property yourself or you can rent it out. With the current housing shortage, this is a good prerequisite for increasing rental income. Because as always, supply and demand. The chart shows the share of annual building completions in 2016-2018 in the annual demand in the period 2016-2020.

1. Hamburg and Düsseldorf Coverage / year at 86%
2. Frankfurt am Main Coverage / year at 78%
3. Berlin coverage / year at 73%
4. Munich Coverage / year at 67%
5. Stuttgart Coverage / year at 56%
6. Cologne Coverage / year at 46%

Rental

1. Rental price for dream apartment
2. Reality Check: Prices for first time rentals
3. Service charges in comparison
4. Housing market: Current requests and offers
5. Rent office: Free areas and practices

Rental price for Dream Apartment

When it comes to the rent you’re willing to pay for the perfect apartment, Stuttgart is way up there in a Germany-wide comparison of average rents. The chart shows the average rent for an apartment with 3 to 4 rooms (81 to 105 sqm).

1. Munich – 1.500 Euro / month
2. Frankfurt – 1.170 Euro / month
3. Stuttgart – 1.080 Euro / month
4. Hamburg – 1.030 Euro / month
5. Düsseldorf – 900 Euro / month
6. …

Reality Check: Prices for first time rentals

The chart shows the cold rents for first-time rentals in top 7 cities per square metre.

1. Munich from 12.96 Euro to 17.42 Euro (+ 4.46 Euro)
2. Stuttgart from 10.00 Euro to 14.21 Euro (+ 4.21 Euro)
3. Frankfurt from 11.57 Euro to 14.18 Euro (+ 3.01 Euro)
4. Hamburg from 12.00 Euro to 13.16 Euro (+ 1.16 Euro)
5. Düsseldorf from 8.62 Euro to 12.55 Euro (+ 3.93 Euro)
6. Berlin from 7.05 Euro to 12.40 Euro (+ 5.35 Euro)
7. Cologne from 9.12 Euro to 12.39 Euro (+ 2.59 Euro)
8. Comparable value: Germany from EUR 6.99 to EUR 9.58 (+ EUR 2.59)

Service Charges in Comparison

The chart shows the total ancillary housing costs per year for a three-person household (in euros). The average in Germany is EUR 1,900.84 per year. The cheapest cities for ancillary costs are:

1. Munich – 1.643,00 Euro / year (257,84 Euro less)
2. Mainz – 1,686.02 Euro / year
3. Hamburg – 1,682.40 Euro / year
4. Kiel – 1.682,40 Euro / year
5. Stuttgart – 1,729.74 Euro / year

More statistics can be found at Statista

Home market: Current requests and offers

The chart shows requests and offers for rental apartments in the 14 largest cities in Germany. 150,000 advertisements for rental apartments and the corresponding contact enquiries were evaluated.

More statistics can be found at Statista

Rent office: Free areas and practices

Finding the perfect office – How does Stuttgart compare to other German cities? How many free spaces and practices are there in relation to Frankfurt, Cologne, Düsseldorf, Munich & Co. This chart shows the proportion of vacant office space as a proportion of total office space in selected German cities in 2018.

1. Frankfurt am Main – 6.8% free / 93.2% rented
2. Düsseldorf – 6.4% vacant / 93.6% rented
3. Hamburg – 3.6% vacant / 96.4% rented
4. Cologne – 2.8% free / 97.2% rented
5. Stuttgart – 2.3% free / 97.7% rented
6. Munich – 1.8% free / 98.2% rented
7. Berlin – 1.5% free / 98.5% rented

More statistics can be found at Statista

Living, economy, city and inhabitants

1. City map of Stuttgart
2. Private households: Forecast until 2030 in BW
3. Place 1 of the most livable cities in Germany
4. Stuttgart is family-friendly

City map Stuttgart

Private households: forecast until 2030

How is Stuttgart developing as a city and in Baden-Württemberg as a federal state? Here you can see the number of private households in Germany by federal state in 2018 and forecast for 2030 (in 1,000). This is an optimal situation for landlords as the demand for living space increases.

More statistics can be found at Statista

Place 1 of the most livable cities in Germany

Do you consider your city worth living in?

1. Stuttgart – 89% think the city is worth living in! 9 out of 10 people live in Stuttgart
2. Cologne – 89%
3. Hamburg – 88%
4. Dusseldorf – 87%
5. Bremen – 86%
6. Munich – 84%
7. Berlin – 83%
8. Essen – 80%
9. Frankfurt – 79%
10. Dortmund – 76%

More statistics can be found at Statista

Stuttgart is family-friendly

Do you consider your city to be family-friendly?

1. Stuttgart – 65%
2. Dortmund – 63%
3. Bremen – 61%
4. Hamburg – 60%
5. Cologne – 60%
6. Dusseldorf – 57%
7. Munich – 56%
8. Frankfurt – 51%
9. Berlin – 48%
10. Essen – 41%

More statistics can be found at Statista

Buy in Germany

Tip! Read more about Buy an apartment: The 10 most expensive German cities.

• Ranking: Square meter prices for condominiums
• House price index: development of house prices
• Development of construction investments in Germany
• Ownership ratio in Germany

Ranking: Square meter prices for condominiums

Cities with the highest prices per square meter for condominiums in 2015 and 2019 (in euros per square meter).

1. Munich – 8,993 Euro / square meter
2. Frankfurt am Main – 6,701 Euro / square meter
3. Stuttgart – 6,324 Euro / square meter
4. Potsdam – 6.1.64 Euro / square meter
5. Berlin – 5.578 Euro / square meter
6. Hamburg – 5,507 Euro / square meter
7. Düsseldorf – 5,470 Euro / square meter
8. Erlangen – 5.416 Euro / square meter
9. Regensburg – 5.411 Euro / square meter
10. Freiburg im Breisgau – 5,349 Euro / square meter

More statistics can be found at Statista

House price index: development of house prices

Development of house prices in Germany in the years from 2000 to 2018 (2015 = Index 100).

More statistics can be found at Statista

Development of construction investments in Germany

Development of construction investments in Germany in the years 2000 to 2016 (compared to previous year).

More statistics can be found at Statista

Ownership ratio in Germany

Ownership rate in Germany in the period from 1998 to 2018 by Länder

All further information on statistics can be found at Statista

Rentals in Germany

Tip! Read more about Rent an apartment: The 10 most expensive German cities.

1. Development of the rental price index
2. Ranking: Rents for apartments
3. Number of newly constructed residential buildings

Development of the rental price index

Development of the rent price index for Germany in the years from 1995 to 2019 (2015 = Index 100)

More statistics can be found at Statista

Ranking: Rents for apartments

Cities with the highest rental prices for apartments in Germany in the 4th quarter of 2019(in euros per square metre)

More statistics can be found at Statista

Number of newly constructed residential buildings

New construction: Where are new apartments being built? Number of newly constructed residential buildings in Germany by federal state in 2017 and 2018 (in 1,000).

Real Estate Agent Commission: What the Fee Legally Includes

The commission — used synonymously with real estate agent’s fee or real estate agent’s wage — is the success fee of the real estate agent for the mediation of a purchase, rental, or lease agreement. It is due exclusively if the agent’s involvement is proven: If the contract is concluded without the agent’s participation, there is no claim. The legal basis is § 652 BGB, supplemented by the special rules for residential properties that have been in effect since the end of 2020. The following overview summarizes the essential legal characteristics that buyers and sellers need to know.

• Success fee — due only upon effective contract conclusion
• Basis for calculation — gross purchase price or net cold rent
• Value added tax — 19 % on the net commission
• Client principle — applies since 2015 for rentals
• Split 50/50 — mandatory for residential property purchases since 2020
• Written form — the real estate agent contract must be in written form

What is the actual commission in 2025? Regional rates in comparison

Unlike the land transfer tax, the commission is not legally fixed in amount — it is negotiable, but has settled on market-standard rates regionally. In Berlin, Brandenburg, Hamburg, Hessen, and Bremen, the usual total rate is 7.14 % including VAT, in Bavaria, Baden-Württemberg, and North Rhine-Westphalia it is 7.14 %, and in Mecklenburg-Vorpommern it is sometimes as low as 4.76 %. Since 2020, the buyer pays a maximum of half — if the seller has commissioned the real estate agent.

Buyer’s principle when purchasing: § 656a–656d BGB in plain language

With the “Law on the Distribution of Real Estate Agent Fees” (effective since December 23, 2020), when buying single-family homes and condominiums: the buyer may pay a maximum share equal to the one the seller bears. If the seller agrees with the real estate agent on 3.57%, the buyer may also pay 3.57% — not a single cent more. This rule does not apply to multi-family homes, commercial properties, and land — here, the commission is freely negotiable.

Important: The buyer must pay only after the seller has demonstrably settled their share (§ 656c para. 2 BGB). In case of violation, the buyer’s claim is invalid — a frequently overlooked lever in negotiations.

Calculation example: Commission on a purchase price of 500,000 €

Who buys a rented condominium in Berlin for 500,000 € should calculate the commission exactly into his purchase additional costs. It is, besides the land transfer tax and notary costs calculation, the largest single item of the acquisition additional costs and directly influences the purchase price factor calculation.

With an annual net cold rent of 18,000 €, the gross return calculation is 3.6 % on the purchase price — but only 3.24 % based on the total investment. Thus, the commission reduces the return by about 11 basis points.

Tax treatment: Commission as acquisition ancillary costs

For investors, the tax classification is crucial. According to § 255 Abs. 1 HGB, the commission belongs to the acquisition ancillary costs and is allocated to the building portion. It is not immediately deductible as advertising expenses, but increases the basis for depreciation. For an apartment built in 1985 with 80 % building portion and 2 % linear depreciation, this means: 17,850 € × 80 % = 14,280 € go into the depreciation — 285.60 € are claimed as tax deductions annually.

• Rental — commission increases depreciation basis, § 7 Abs. 4 EStG
• Own use — no tax deductibility
• Sale within speculation period — reduces taxable profit
• Seller’s commission — advertising expenses if rental intention

As described in the guide on real estate capital gains tax, the commission paid at the time of purchase can be deducted from the disposal gain if the property is sold within a 10-year period — a frequently overlooked tax lever that can save five-figure amounts on high investments.

Commission when renting out: Maximum of 2 monthly rents

Since 2015, the strict principle of the person who orders pays applies to rental agreements under § 2 WoVermRG: whoever commissions the real estate agent pays. In practice, this is almost always the landlord. The maximum limit is 2 net cold rents plus 19 % VAT, meaning a maximum of 2.38 gross net cold rents. With a cold rent of €1,500, this amounts to a maximum of €3,570 — the real estate agent may not ask the tenant for a single cent more.

Negotiation strategies: Where the real room for maneuver lies

The commission is negotiable even at premium locations, despite market-standard rates. Experienced investors use three levers: volume, market phase, and exclusivity. When buying a Apartment building for sale starting from 2 million €, 2.5 % instead of 3.57 % is realistic — often even less in private sales with time pressure.

Decision matrix: When is a real estate agent even worth it?

For Seller, the question arises whether the commission of 3.57 % of the sales proceeds is justified by the real estate agent’s performance. The honest answer: It depends on location, market phase and own competence. Whoever correctly assesses the options in the Real Estate Buying Market Conditions and knows the market can often gain 2–3 % net proceeds when selling a house without a real estate agent.

• Real estate agent makes sense — Off-Market, inheritance, time pressure, complex properties
• Selling on your own makes sense — Standard locations, high demand, clear properties
• Hybrid — Rating with a real estate agent, marketing yourself
• Fixed-price real estate agent — often cheaper with lower purchase prices

For detailed calculation of the commission amount and tax effects, the real estate agent commission calculator is recommended — it immediately shows how the commission affects net yield calculation and equity requirement calculation.

Frequently asked questions about real estate agent commission

Exactly when is the commission due?

The commission becomes due upon notarization of the purchase contract, not only after the property transfer is registered in the land register. The real estate agent must have demonstrably caused the contract to be concluded — meaning they brought the parties together or actively promoted the conclusion of the contract. Regarding the buyer’s share under the principle of the ordering party, § 656c Abs. 2 BGB applies additionally: the buyer pays only after the seller has settled their share and this has been proven. Anyone who pays in advance without this proof can reclaim the payment as being without legal basis.

Can I deduct the commission for tax purposes?

For rented real estate, yes, but not immediately as a deductible expense — the commission counts as part of the acquisition costs and increases the depreciation base of the building portion. With an investment of 500,000 €, 17,850 € commission, and 80 % building portion, 14,280 € flows into the depreciation, which provides a tax relief of 285.60 € annually at 2 % depreciation. There is no deduction for personal use. If the property is sold within the 10-year speculation period, the commission paid at that time further reduces the taxable gain from the sale under § 23 EStG.

Is the commission negotiable?

Yes, completely — there is no legally defined minimum or maximum rate when purchasing real estate, only market-based regional values. According to the buyer’s principle under § 656c BGB, only the distribution of 50/50 is prescribed, not the absolute amount. Negotiation room is particularly present for high-priced properties starting at 1 million €, multi-family homes, commercial real estate, and off-market deals. Realistic reductions range between 0.5 and 2 percentage points — for large volumes, this can quickly amount to five- or six-figure sums. Only when mediating rental apartments does the fixed upper limit of 2 net cold rents plus VAT apply.

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