How do I start investing in German property as an expat, and who can help?

The simple version: what a first investment looks like

The simplest German property investment for an expat has four parts. One existing flat, not a new build and not a portfolio. A long-term tenant on an unlimited contract, not a holiday let. A German mortgage that carries most of the price. A property manager who deals with the tenant so that the owner does not have to. For its clients LDP Group runs these four parts as one process: it finds the flat, prepares the financing file for the broker FM Zinswerk, and sets up the rental management that places the tenant, with the tax structure set by Helm & Partner before the notary date. Everything else on this page is detail inside those four parts.

The entry point is lower than most people assume, because it is a purchase price and not a cash figure. LDP Group works with purchase prices from 100,000 EUR up to seven figures. A bank finances most of that price; the owner brings the remainder plus the purchase costs. Across LDP's published client cases, a selection, the purchase prices ran from 164,500 EUR to 730,000 EUR with a median of 505,000 EUR.

One number to keep in view from the start: across all published LDP business cases the average gross yield was 2.9 percent at purchase and 5.3 percent planned after renovation, conversion or re-letting; the second figure is the rent planned in the purchase calculation, not an achieved result. A first investment is checked on both figures: it must carry itself at the current rent, and the planned rent after the work is the upside, which is the work a full-service firm is for.

Who can buy, and who gets financed

Germany has no ownership restriction on foreign buyers. A Blue Card holder, an EU citizen, and a person living outside Europe can all hold title to a German flat on the same terms. What differs is not the right to buy but the right to borrow, and residency decides that.

• Residents of Germany, any nationality. 80 to 90 percent of the purchase price is the standard band, and banks go up to 100 percent with a strong income profile. The bank wants German payslips or a German tax assessment and a residence permit that outlasts the early years of the loan.
• Residents of another EU country. 50 to 60 percent of the purchase price, LDP's own working figure as of June 2026. The remaining 40 to 50 percent plus purchase costs comes from equity, which is why a first investment from abroad tends to be cheaper or later.
• Residents outside the EU. The banks our broker partner FM Zinswerk works with do not finance this group, and LDP does not take on these purchases. Buying is legal; the financing routes that exist go through other channels and are outside this guide.

Income in a currency other than the euro is discounted by up to 25 percent in some cases before the bank sizes the loan. A salary paid in Swiss francs, pounds or dollars still qualifies; it simply counts for less. The mortgage rate table and loan-to-value by residency shows the current bands.

How much cash you actually need

For a standard profile banks do not finance the Kaufnebenkosten (purchase costs). Transfer tax is set by the federal state; notary and land registry together come to roughly 1.5 to 2 percent, taken at 2 percent below. The table takes one purchase price, 300,000 EUR, and shows the equity a buyer needs in three states at two loan-to-value levels expats typically meet: 80 percent, the lower end of the standard band for residents, and 55 percent for an EU resident abroad.

Two things follow. The state matters more than the city inside it: the same flat costs 9,000 EUR more to buy in Nordrhein-Westfalen than in Bayern before anything else is counted. And residency matters more than the state: the gap between a resident's 80 percent and a non-resident's 55 percent is 75,000 EUR of cash on a 300,000 EUR flat, which is why the financing conversation comes before the property search and not after. The cash needed study runs the same arithmetic for 25 cities.

Where to buy: three city tiers and why Munich's yield is not the whole story

Across the 25 largest German cities gross yields run from roughly 2.6 percent in Hamburg to 4.9 percent in Wuppertal. LDP's city dataset (July 2026) puts the cities LDP works in into three tiers, and the tiers trade yield against vacancy in a way that a ranking hides.

Tier one buys occupancy and resale depth. Munich has the highest prices in the country and the second-lowest gross yield of the 25 cities at 3.2 percent, with vacancy of 0.1 percent. Tier two is where the trade is least lopsided, and where the individual building does more work than the city average. Tier three pays a higher yield for a vacancy rate a remote owner has to be able to carry.

The 3.2 percent in Munich is an average across the whole market, including flats that are let below their potential and have not been touched for twenty years. LDP's published Munich business cases show an average gross yield of 2.7 percent at purchase and a planned 5.2 percent after the work, with cold rent planned at 1.9 times the previous rent. Across all published cases the planned lift is from 2.9 to 5.3 percent. The city average tells you what the market pays for the flat as it stands; the case figures show what the purchase calculation planned for the same flat once it is converted, renovated or re-let. A first investor should read both numbers: the flat must carry itself on the first, and the second is the upside, with a plan for how to get there written down before reservation. The city comparison page has all 25 cities.

Which property type: existing flat, co-living conversion or full renovation

LDP works with existing buildings only (Bestandsimmobilien, existing stock), no new builds and usually no listed buildings. Within that there are three routes, and the aggregated case figures show what each one was planned to deliver.

• Modernised studio or renovated flat, let as one unit. The plainest route: buy, refresh, re-let at market. Published business cases of this type, modernised studios and standard rentals, show an average gross yield of 3.3 percent at purchase and 4.9 percent planned after the work, with cold rent planned at about 1.5 times the previous rent. It suits a first buyer who wants one tenant and one contract.
• Co-living conversion, 3 to 5 rooms let per room. Published business cases show average cold rent of 1,166 EUR before and 2,369 EUR planned after, a 2.0 multiple, with average gross yield of 2.7 percent before and 5.4 percent planned after and a median purchase price of 525,000 EUR. Rent per room averages about 680 EUR cold. Each room has its own tenancy contract under the same tenancy law, so the management load is higher and the vacancy of one room is not the vacancy of the flat.
• Kernsanierung, full renovation. The largest lift and the largest budget. The renovation cost interacts with the 15 percent rule described below, so the tax treatment of the budget has to be planned with the purchase, not after it.

Nuremberg cases, mostly of the first two types, show a planned lift from 2.9 to 4.9 percent with a median purchase price of 307,000 EUR; Munich co-living is planned from 2.6 to 5.4 percent at a 2.1 multiple. Which route is right for a first buyer is a question of budget and appetite for management, and it is settled in the screening call rather than by preference.

The numbers to check before you reserve

Five figures decide whether a listing is worth a reservation fee. All five should be in writing before any money moves.

• Gross yield. Annual cold rent divided by purchase price. Compare it with the city figure above and ask why it differs. A yield far above the city average is either a good building or a problem.
• Vacancy. Not the city average but the flat's own history: how long it stood empty at the last change of tenant, and whether the asking rent then was realistic.
• Hausgeld and the reserve fund. The monthly Hausgeld (owners' association charge) splits into what the tenant pays back and what the owner keeps. The reserve fund balance and the minutes of the last three owners' meetings show whether a roof or a lift is about to be assessed. See the Hausgeld glossary entry.
• Mietspiegel and the rent brake. In most of LDP's cities, including Berlin, Munich, Nuremberg, Cologne, Duesseldorf, Stuttgart and Karlsruhe, the Mietpreisbremse (rent cap on re-letting, § 556d BGB) limits the rent on a new contract. Furnished or temporary lettings are not exempt as such; the exemptions are specific, for example a new build first let after 1 October 2014 or a comprehensively modernised flat (§ 556f BGB). Any rent in the calculation that exceeds the local reference rent needs a stated reason.
• Energy certificate. It must be shown at the viewing at the latest and handed over after signing, under the Gebäudemodernisierungsgesetz (GModG), which replaced the GEG on 29 July 2026, and its class tells you whether energy work is part of the renovation budget.

The tax levers in one page

Rent is taxed under § 21 EStG at the personal progressive rate, filed once a year on Anlage V. What is taxed is the surplus after deductions, and in the first years of a financed purchase that surplus is often negative. Five levers set its size.

• Depreciation (AfA, § 7 Abs. 4 EStG). 2 percent a year on buildings completed 1925 to 2022, 2.5 percent on buildings completed before 1925, 3 percent on buildings completed 2023 or later. Only the building share depreciates, never the land.
• The land and building split. The Federal Ministry of Finance publishes a working aid to split the price; a qualified appraisal can substantiate a higher building share or a shorter remaining life. On an inner-city flat the difference is worth a valuation before the first return.
• Werbungskosten (§ 9 EStG). Loan interest, management fees, the Hausgeld except the reserve fund, insurance, travel to the property and advisory fees are deductible against rent. Repayment of principal is not.
• The 15 percent renovation line (§ 6 Abs. 1 Nr. 1a EStG). Renovation within three years of purchase that exceeds 15 percent of the building share of the acquisition cost, net of VAT, is capitalised and depreciated with the building. Below the line it is deductible as maintenance, in full or spread over two to five years (§ 82b EStDV). It is a threshold, not a taper.
• The ten-year rule (§ 23 EStG). A private sale is tax-free after ten years between the two notarised contracts; inside ten years the gain is taxed and the depreciation claimed is added back.

Across LDP's published business cases the median first-year tax benefit estimated in the purchase calculation was 21,400 EUR, with a range of 4,800 to 58,320 EUR. For a non-resident the deductions are identical but the loss cannot be set against a foreign salary; it is carried forward under § 10d EStG (§ 49 Abs. 1 Nr. 6 and § 50 Abs. 1 S. 2 EStG). The tax page works one flat through for both owners.

Financing and the timeline to approval

From first call to bank approval takes about four weeks when the file is complete on day one. The bank wants a passport, the residence permit, the last three payslips, the last tax assessment, a SCHUFA extract, and proof that the equity exists in an account in the buyer's name. Self-employed buyers add two years of accounts. Non-euro income is discounted as described above.

LDP coordinates financing with the independent broker FM Zinswerk, which works with more than 400 bank partners. The broker is paid by the bank, so the service is free for the client; LDP's own brokerage licence under § 34i GewO is in preparation. Any fixed-rate German mortgage can be terminated ten years after full disbursement with six months notice and no prepayment penalty (§ 489 Abs. 1 Nr. 2 BGB), which is the exit an expat should note on the day of signing.

Management after the keys

A property manager places and screens the tenant (income about three times the rent, SCHUFA, employer confirmation), draws up the contract, holds the deposit, collects the rent, coordinates repairs, and issues the annual operating cost statement. The last three are legal duties: the statement is due within 12 months of the end of the billing period (§ 556 Abs. 3 BGB), the deposit is capped at three months' cold rent and held separately (§ 551 BGB), and the energy certificate is shown at every viewing (GModG, formerly GEG).

The fee model matters for the yield calculation. A percentage of rent rises with every rent increase; a flat fee does not. LDP's rental management is a flat fee from 30 EUR per tenant per month depending on the city, with no placement fee and third-party repairs at cost. Owners abroad get viewing videos and digital handover protocols.

The two objections every forum raises: a tenant who stops paying, and a tenant you cannot remove

Both objections are real, both are priced in by professional landlords, and neither is a reason to skip Germany. They are a reason to run the numbers with the German rules in them rather than with the rules of your home market.

A tenant who stops paying. Under § 543 Abs. 2 Nr. 3 BGB the landlord may terminate without notice once the tenant is in arrears on two consecutive payment dates with more than an insignificant part of the rent, or once the arrears over a longer period add up to two months' rent. A written termination follows, then, if the tenant does not leave, an eviction claim (Räumungsklage) at the local court. The court phase takes about three to six months in a simple case and in practice often six to twelve months; enforcement by the bailiff adds one to three more. The cost is set by the value in dispute, usually the annual net cold rent, and lands first with the landlord: roughly 1,500 to 2,500 EUR of court and lawyer fees for a small flat, recoverable from the tenant only if the tenant can pay.

One rule surprises every foreign owner: under § 569 Abs. 3 Nr. 2 BGB the tenant can cancel the no-notice termination by paying the full arrears within two months of the eviction claim being served, once in any two years. The Bundesgerichtshof confirmed (VIII ZR 307/21, judgment of 5 October 2022, confirmed again on 23 July 2025, VIII ZR 287/23) that this grace payment does not undo an ordinary termination issued alongside it, which is why every termination for arrears is sent in both forms. A government bill (Mietrecht II, BT-Drs. 21/6807, not law in October 2026) would change this: the grace payment would then also cure the ordinary termination, once per tenancy.

What a first-time investor does with this: the calculation carries a reserve of at least three months' rent on a separate account, the tenant is screened before the contract (income of about three times the rent, SCHUFA extract, employer confirmation, previous landlord's confirmation that no arrears exist), the deposit is taken at the legal maximum of three months' cold rent under § 551 BGB, and a rent default insurance (Mietausfallversicherung) is at least priced. On the flats LDP manages the screening and the arrears process are the manager's job, from the first reminder to the lawyer's instruction.

A tenant you cannot remove. A German residential tenancy is open-ended by default and the landlord can end it only with a legitimate interest under § 573 BGB: a serious breach, own use for the landlord or close family, or a documented economic necessity. Wanting a higher rent is expressly not a reason. Notice periods under § 573c BGB run three months and grow to six after five years and nine after eight years of tenancy. If the flat was converted into a condominium after the tenant moved in and then sold, § 577a BGB blocks own-use and economic-use termination for three years after the sale, up to ten in areas the state government designates, which includes the large cities.

For an investor this is simpler than it sounds. You are not buying to move in, so own use is irrelevant. You are buying the rent, so the sitting tenant is the asset, not the obstacle, and the rent moves within § 558 BGB: up to the local comparable rent, no more than 20 percent in three years, 15 percent in designated tight markets, and at a new letting inside the rent brake of § 556d BGB in Berlin, Munich and most large cities, now extended to the end of 2029. The rule of thumb: a tenanted flat is priced on the rent it pays today, and a plan that only works if the tenant leaves is not a plan.

The third objection, less often spoken: the work. The operating cost statement within twelve months, the separate deposit account, the German-language correspondence, the tradesman at 7 a.m. Self-managing from abroad is possible and is compared task by task in self-managing versus a professional manager; most owners who live outside the city decide against it after the first operating cost statement.

Who can help, and what each one does not do

Four kinds of helper appear in an expat's search. They overlap less than their websites suggest.

• Mortgage broker. Finds the loan and negotiates the rate across many banks, usually paid by the bank. Does not find the property, check the Hausgeld, or plan the tax basis.
• Financial advisor. Places property inside a wider plan and may sell products alongside it. Does not source individual flats in a specific district or manage tenants.
• Turnkey seller. Sells its own renovated or new-build stock, often with financing and management attached. The stock is the seller's, so the buyer compares the flat against the seller's other flats rather than the open market.
• Full-service firm. Sources on the open market, coordinates financing, has the tax structure set by a tax adviser and manages the let, and is paid either by fee or by the parties it introduces. The question to ask is where the money comes from and whether the four parts are actually integrated. LDP Group, which wrote this guide, is a full-service firm: its commission is part of the purchase price, with no separate invoice for finding, checking and structuring the purchase, and rental management is a flat fee from 30 EUR per tenant per month.

How LDP handles this for clients

LDP Group is a Munich-based firm, founded as LDP Immobilienberatung GmbH in October 2024 by founders who were already active in the market before, that has served more than 100 clients, most of them expats buying a first investment property in Germany. Four services run as one process, in English throughout, and the founders Nicholas Runtic and Abdelrahman Maged review every purchase calculation.

• Property sourcing and acquisition in Berlin, Munich, Nuremberg, Erlangen, Fuerth, Duesseldorf, Cologne, Stuttgart, Karlsruhe, Frankfurt and Hamburg, including viewings on the client's behalf with photos and video and remote purchase by power of attorney.
• Mortgage financing coordination with FM Zinswerk, about four weeks to approval, for residents of Germany and other EU countries.
• Tax-optimised structuring: the tax structure is set by the tax firm Helm & Partner (Steuerberater) before the notary date; LDP prepares the purchase figures and coordinates, and gives no tax advice. Helm & Partner also handles the filings, with an annual German return available case by case.
• Rental management and tenant placement in every city LDP operates in, through LDP's own company FairMieten in Berlin and Bremen and vetted partners elsewhere.

Sourcing, financing coordination and coordination of the tax set-up carry no separate fee to the client; rental management is the flat fee above. The first step is a free 30-minute screening call, in which residency, budget and horizon are checked before any property is discussed. The services page lists scope and fees in one place.

Limitations and what we do not know

• LDP is a property investment firm, not a tax adviser or a lender. The statutes above are stated as of September 2026; a specific return and a specific loan are decided by Helm & Partner and by the bank.
• The case figures are averages and medians across published, anonymised business cases. The rents after the work are the rents planned in the purchase calculation, not achieved results, and the first-year tax figures are estimates from the same calculation; the flats were selected because the lift was available.
• The equity table omits agent commission, which varies by listing, and takes notary and land registry at the upper end of the 1.5 to 2 percent range.
• The loan-to-value bands are LDP's working figures: 50 to 60 percent for EU residents abroad as of June 2026, and 80 to 90 percent as standard for residents of Germany. Individual banks go above or below them depending on the borrower, up to 100 percent with a strong income profile.
• The city dataset is dated July 2026; prices, rents and vacancy are city averages, and the spread inside a city is often wider than the gap between two cities.
• Whether the owner's country of residence taxes the German rent a second time is a question for a local adviser and is not covered here.

What would change this answer

• A change to the AfA rates in § 7 Abs. 4 EStG or to the 15 percent threshold in § 6 Abs. 1 Nr. 1a EStG (applied under the Federal Ministry of Finance letter of 26 January 2026), or the planned § 6f EStG on splitting the price between land and building (Jahressteuergesetz 2026, a draft in October 2026).
• A change to any state's transfer tax rate, which would move every line of the equity table; Bayern's 3.5 percent has been the lowest in Germany for years and is a recurring budget topic.
• A refresh of the LDP city dataset or of the aggregated case figures, which are updated as new cases are published.
• A change to the loan-to-value bands LDP's bank partners apply to EU residents outside Germany, which are reviewed with the broker at least twice a year.
• A change to the arrears thresholds in § 543 BGB, the grace payment in § 569 BGB or the landlord's termination grounds in § 573 BGB, or a further change to the rent brake in § 556d BGB, last extended in July 2025 to the end of 2029.

Last reviewed October 1, 2026. Reviewed by Nicholas Runtic and Abdelrahman Maged, co-founders of LDP Group, before publication and at every review date. We review this page every quarter, after every city dataset refresh and after every Jahressteuergesetz; if you are reading it more than three months after the date above, check the transfer tax rates and the loan-to-value bands before relying on the table.

Frequently asked questions

Sources

• § 7 EStG, Absetzung für Abnutzung, Abs. 4 (gesetze-im-internet.de)
• § 6 EStG, Abs. 1 Nr. 1a anschaffungsnahe Herstellungskosten
• § 9 EStG, Werbungskosten
• § 21 EStG, Einkünfte aus Vermietung und Verpachtung
• § 23 EStG, private Veräußerungsgeschäfte
• § 82b EStDV, Verteilung größeren Erhaltungsaufwands
• § 556d BGB, zulässige Miethöhe bei Mietbeginn (rent brake)
• § 489 BGB, ordentliches Kündigungsrecht des Darlehensnehmers
• BMF Arbeitshilfe zur Kaufpreisaufteilung (land and building split)
• LDP city dataset 2026, prices, rents, yields and vacancy
• LDP mortgage rate table and loan-to-value by residency
• LDP rental management fee and scope
• FM Zinswerk, independent mortgage broker
• § 543 BGB, außerordentliche fristlose Kündigung (rent arrears thresholds)
• § 569 BGB, Abs. 3 Nr. 2 grace payment after an eviction claim
• § 573 BGB, ordentliche Kündigung des Vermieters (legitimate interest)
• § 573c BGB, Kündigungsfristen (notice periods)
• § 577a BGB, Kündigungsbeschränkung bei Wohnungsumwandlung
• § 551 BGB, Begrenzung und Anlage von Mietsicherheiten (deposit)
• § 558 BGB, Mieterhöhung bis zur ortsüblichen Vergleichsmiete
• ImmoScout24, Räumungsklage: Dauer, Ablauf und Kosten (read 21.09.2026)
• KGK Rechtsanwälte, Wie lange dauert eine Räumungsklage in Deutschland (read 21.09.2026)
• Bundesregierung, Mietpreisbremse verlängert (law in force 23.07.2025, runs to 31.12.2029), 24.07.2025