Warm rent (Lexikon) to cover all additional costs

The rent including utilities is the total rent that a tenant pays monthly to the landlord — consisting of the cold rent (pure compensation for the use of the living space) plus the warm operating costs for heating and hot water. It is therefore the amount that actually comes off the account, but not the final housing cost amount: electricity, internet, and partly also cold additional costs such as trash or caretaker services may still be added or already included. Anyone comparing rental agreements, evaluating a property as an Investment, or calculating their housing additional costs must precisely distinguish the rent including utilities from the cold rent and gross rent including utilities — otherwise, wrong decisions can be made in the four- to five-digit range per year.

What exactly is included in the rent including utilities?

The composition of the rent including utilities is regulated in the Operating Costs Ordinance (§ 2 BetrKV). At its core, it consists of two blocks: the contractually agreed cold rent and the allocable heating and hot water costs. The latter are usually collected as monthly prepayments and settled exactly once a year through the heating cost statement.

• Rent — payment for the pure living area
• Heating costs — fuel, maintenance, chimney sweep
• Hot water costs — energy and water treatment portion
• Heating maintenance — annual service contract
• Meter reading service — reading, calibration of meters
• Emissions measurement — chimney sweep according to KÜO

Practical example: 75 m² rental apartment in Cologne

Concrete numbers help more than any definition. The following example calculation shows a typical warm rent structure for an average insulated old building apartment with gas central heating in 2025.

Attention: Strictly speaking, this is the gross heated rent, because it also includes the cold additional costs. In everyday language — and in most rental portals — this total amount is however referred to as “heated rent”.

Rent, heated rent, gross cold rent — the clear distinction

The greatest confusion arises from four similar terms that are used differently depending on the region and landlord. Anyone reading a rental agreement or evaluating a commercial property should master this distinction effortlessly.

Why warm rent is crucial for buyers and investors

Investors think in cold rent, because only this flows into the return calculation — additional costs are recurring items. Those who, on the other hand, analyze tenant structures or assess vacancy risks must know the warm rent, because it determines the actual burden limit of the tenant. As described in the guide on real estate as an investment, the warm rent should make up a maximum of 30–35 % of the household’s net income — anything above that increases the probability of rent default measurably.

Rule of thumb: If the warm rent increases faster than the cold rent, it is almost always due to energy prices — not due to rent increases. That’s exactly why buyers should check the energy certificate before looking at the rental index.

For the gross return calculation formula, only the annual cold rent is relevant. Those who calculate with the warm rent typically overestimate their return by 15–25 %. The same rule applies when calculating the purchase price factor: only use cold rent.

Common Mistakes and Misunderstandings

In practice, misinterpreted heating costs regularly cost tenants and landlords four-figure amounts. These stumbling blocks occur most frequently — often because terms are used ambiguously or contract texts are deliberately vague.

• Flat rate instead of advance payment — no top-up, but also no refund
• Confusing electricity — household electricity is never part of the heating cost
• Comparison with rental index — rental index shows net cold rent, not heating cost
• Too low advance payment — unpleasant surprise during annual settlement
• Adjustment missed — landlord may adjust for rising energy prices (§ 560 BGB)
• Consumption settlement missing — at least 50 % must be settled based on consumption

Heating Cost in Sales and Valuation Context

Who is selling a rented property must transparently disclose the cold rent structure to potential buyers — the warm rent is secondary here, but relevant for the tenant’s creditworthiness. In the income value method, only the sustainably achievable annual cold rent is included in the Rating. When buying a multi-family house, the warm rent should still be part of the due diligence: it shows how energy-efficiently the property needs renovation and whether future CO₂ costs will burden the cash flow.

FAQ

Is electricity included in the warm rent?

No. Household electricity is never part of the heating costs and is billed directly by the tenant with a self-selected electricity provider. Only the general electricity (stairwell lighting, outdoor facilities) counts as chargeable cold additional costs and may be included in the gross heating costs depending on the contract definition. Anyone looking for an apartment should therefore plan for around 35–80 € monthly for electricity in addition to the stated heating costs.

Can the landlord unilaterally increase the heating costs?

The cold rent is subject to strict provisions of the BGB (§ 558 ff.) and can only be increased under certain conditions. The heating cost advance payment, on the other hand, can be adjusted by the landlord after each annual settlement according to § 560 BGB if the actual consumption costs have changed permanently — for example, due to increased gas or oil prices. The increase must be documented in writing and verifiable, and there is a right to object in case of calculation errors.

What heating costs are considered reasonable?

There is no one-size-fits-all answer, because energy efficiency, location, and apartment size vary greatly. As a rough guideline: the warm operating costs (heating plus hot water) in an average energy-efficient building range between 2.00 € and 2.80 € per square meter and month. If the value is significantly higher, this indicates poor insulation or outdated heating technology — an important warning signal for both tenants and buyers, which should definitely be checked during the evaluate the property phase.

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