Real estate remains the most popular form of investment among Germans. In times of volatile stock markets, a real estate investment is still seen by many private investors as a secure return opportunity. However, not all private owners use their apartments themselves, but rent them out. In doing so, however, they often underestimate the costs and time required for a new rental. A current analysis by the real estate technology company Home shows the costs that private owners will incur if they rent out their apartments on their own.
The apartment expert recorded any vacancy costs as well as the costs and time required for renovation, advertisements, the selection of tenants and the handover and compared the costs for a new lease for the different parts of the city in Berlin, Munich and Hamburg. With the German yield calculator from Home, landlords can individually calculate what renting their own apartment to Home would save.
It is the business model of Home to help landlords and tenants: “With Home, landlords no longer have to worry about anything. The primary goal of minimizing rental costs is to find the right tenant quickly. Home takes on this costly and time-consuming search and accelerates it through technologies such as contactless visits and digital contract signing. The company is rethinking the letting process and offers an all-round carefree package for homeowners.
Owners have to reckon with costs of more than 3,000 € for each new rental
overall, renting a condominium in Munich costs the most, with costs of around 3,250 € for vacancies, renovations and looking for a tenant, including signing the contract and handover. In Berlin, owners should expect costs of around 3,090 €. Hamburg follows in third place with average costs of 3,080 €.
If the apartment remains unoccupied for a while between two tenants, this is annoying and can quickly become expensive – especially in Munich. On average, tenants in the Bavarian capital miss out on rental income of around 755 € with a daily rent of 37.89 € and around 20 days that the apartment is uninhabited on average. In Hamburg, the vacancy does not cost the landlords quite as dearly: At 582 €, the Hanseatic city ranks second. Berlin follows with the lowest loss for an empty apartment (524 €).
In Berlin-Grunewald, the tenant-free time causes costs of 1,465 € on average for the owners. An apartment here stands empty for around a month. Landlords in Alt-Treptow in Berlin make significantly less losses (around 146 €), as the apartments here are on the market for a significantly shorter time (6 days) and are on average cheaper (630 €).
Screening the new tenants requires patience, especially in Berlin. In addition to the “lost” rental income, the search for new tenants can also cost time, money and nerves. In particular, communication with prospective tenants, carrying out inspections and the final handover of the apartment cause effort in Germany’s metropolises – no wonder with over 100 prospective tenants per rental property.
In Berlin, private owners have to be particularly patient. With an average of around 450 contact requests and around 140 applicants, the screening and viewing process in the capital takes the longest. In Munich this process is much faster with an average of 135 contact requests and around 40 applicants. Hamburg residents are likely to be the fastest with processing around 60 contact inquiries and around 30 applicants.
In addition to the time required, advertising your own apartment is also associated with costs. Since apartments in Berlin, Hamburg and Munich are available for around 20 days on average between two tenants, landlords should post their advertisements online for at least one month. On average, landlords have to reckon with costs of around 100 € in one of the common portals (Immoscout, Immowelt or Ebay classifieds).
Renovation costs vary by up to 1,200 €, according to Home. Owners also have to take into account the costs of a renovation. Although some cosmetic repairs can be contractually passed on to the moving tenants of an apartment, maintenance costs are regularly incurred. Owners should repair signs of wear and tear that have arisen through years of use in order to maintain the value and condition of the apartment. In Germany’s major cities, landlords can expect an average of around 2,500 € for a professional renovation.
Here, the highest costs fall on the districts with the largest average living space. The renovation of a condominium costs the most at around 3,325 € in the Grunewald district. In Berlin-Gesundbrunnen (around 2,100 €), on the other hand, you pay significantly less due to smaller apartments.