Before You Set the Rent: What Landlords in Germany Should Have on Paper

If you are renting out an apartment in Germany for the first time, it is tempting to start here: open a property portal, find a few similar apartments, see what they are asking, and pick a number.

That gives you an idea of the market. It does not necessarily tell you what rent you can legally charge.

That distinction is a good example of how renting out property in Germany works generally: the difficult part is often not knowing that a rule exists. It is knowing which rule applies to your property, what number it produces, and what you need to keep on file to support it later.

Start with the Kaltmiete

Your Kaltmiete — roughly, the rent before operating and heating costs — is the starting point for most of the other numbers in the tenancy.

But do not treat asking rents on property portals as your legal benchmark.

If your property is in an area where the Mietpreisbremse applies, the starting rent will generally be limited to 10% above the ortsübliche Vergleichsmiete, the local comparable rent. The Mietpreisbremse has now been extended until the end of 2029, although it only operates in areas designated by the individual states.

There are important exceptions. A newer apartment first used and rented after 1 October 2014, for example, is generally exempt. The first rental after comprehensive modernisation is another exception. A sufficiently high previous rent may also matter.

But this is exactly where good records matter.

If you are relying on certain exceptions, German law requires information to be given to the tenant before they enter into the contract. So do not just arrive at a rent number. Keep the calculation behind it: the Mietspiegel or other basis you used, relevant property characteristics, previous rent where applicable, and the reason for any exception you are relying on.

Six months later, you should not have to reconstruct why you charged €1,150 instead of €1,050. You should already know.

Nebenkosten are not simply “everything else”

This is another easy place to get confused.

You own the apartment. You receive bills. Perhaps you are part of a WEG and pay monthly Hausgeld. It can feel natural to take those costs and pass them on to the tenant.

German rental law does not work that way.

Operating costs can be charged to the tenant where this has been agreed in the rental contract. But not every cost of owning an apartment is a recoverable operating cost.

Administration costs are not. Repairs and maintenance are not.

That means the Hausgeld you pay as an owner and the Nebenkosten you can charge your tenant are not automatically the same number.

For a self-managing landlord, it is worth separating those two from the beginning instead of trying to untangle the WEG statement at the end of the year.

If your tenant pays monthly operating-cost advances, you will normally prepare a yearly Nebenkostenabrechnung. The landlord generally has 12 months after the end of the accounting period to send it. The tenant can also request access to the documents behind the calculation.

So keep the invoices, statements, allocation keys and meter data that produced the number. The calculation and the evidence belong together.

The Kaution is not extra cash flow

A residential security deposit can generally be no more than three months of rent, excluding the operating-cost payments.

And if it is a cash deposit, the tenant is entitled to pay it in three monthly instalments.

The deposit also has to be held separately from your own assets. That is worth treating as a separate account and a separate record from day one.

It is security belonging to the tenancy — not additional rental income.

Document the apartment before you hand over the keys

German law does not require you to create a formal handover report every time someone moves in. You should probably create one anyway.

• Walk through the apartment with the tenant.
• Record existing scratches, damaged fittings or marks.
• Write down the electricity, water and heating meter readings where relevant.
• Record how many keys were handed over.
• Take clear photographs, then keep everything together with the signed protocol.

The point is not to create paperwork for its own sake.

Imagine the floor has a deep scratch when the tenant moves out three years later. Was it already there?

A photograph from the day of move-in is a much better answer than either side trying to remember. That is what good property records do: they turn a future argument into a fact.

Notice periods are another reason not to rely on memory

People often say the notice period for a German rental is “three months”. That is incomplete.

For an ordinary landlord termination of a residential tenancy, the landlord needs a legitimate legal interest in ending the tenancy. The initial statutory notice period is roughly three months, but the period the landlord must observe extends after the tenant has occupied the property for five and eight years. The reason for termination also needs to be stated in the written notice.

So before sending a notice based on something you remember reading years ago, check the actual tenancy dates and the actual ground you are relying on.

The pattern is the same

Renting out an apartment in Germany is not impossible. But there are a lot of small decisions where guessing becomes expensive.

• What is the permitted Kaltmiete?
• Which Nebenkosten are actually recoverable?
• What was the meter reading when the tenant moved in?
• Why was this repair charged to the landlord rather than the tenant?
• When does the Nebenkostenabrechnung need to be sent?
• What evidence supports the condition of the apartment?

Individually, none of these questions is particularly complicated. The difficulty is keeping the numbers, documents and decisions connected over several years.

That is why good rental management is not just collecting rent every month. It is being able to explain, later, where every important number came from.