Why Is Rental Yield (Mietrendite) the Key Metric for Real Estate Investors?
If you purchase real estate as a **capital investment** in Germany, you must determine whether the investment is profitable. The rental yield measures the annual rental income relative to the purchase price, showing the **return on the capital invested**. It is essential to distinguish between the **gross rental yield (Bruttomietrendite)** and the **net rental yield (Nettomietrendite)**.
For detailed calculations, you can use our free rental yield calculator.
Calculating Gross Rental Yield
The gross rental yield is a simple metric. It does not account for purchase costs or ongoing maintenance expenses:
Formula:
Gross Rental Yield (%) = (Annual Net Cold Rent ÷ Purchase Price) × 100
Example: Purchase price 250,000 €, monthly net cold rent 850 €:
(850 × 12) ÷ 250,000 × 100 = 10,200 ÷ 250,000 × 100 = 4.08% Gross Yield.
Calculating Net Rental Yield (Nettomietrendite)
The net rental yield is far more accurate because it includes **property purchase costs (Kaufnebenkosten)** and **non-recoverable operating costs (nicht umlagefähige Nebenkosten)**:
Formula:
Net Rental Yield (%) = ((Annual Cold Rent − Non-recoverable Costs) ÷ (Purchase Price + Purchase Costs)) × 100
What Are the Property Purchase Costs (Kaufnebenkosten) in Germany?
Purchase costs can add **8% to 15%** to the purchase price:
- Real Estate Transfer Tax (Grunderwerbsteuer): 3.5% to 6.5% depending on the federal state (e.g., Bayern: 3.5%, NRW: 6.5%).
- Notary & Land Registry Fees: approx. 1.5% to 2.0%.
- Real Estate Agent Commission (Maklercourtage): Up to 3.57% (including VAT) for the buyer under current laws.
Real Estate Transfer Tax Rates by German State
| Federal State | Grunderwerbsteuer Rate |
|---|---|
| Bayern, Sachsen | 3.5% |
| Hamburg | 5.5% |
| Baden-Württemberg, Bremen, Niedersachsen, Rheinland-Pfalz, Sachsen-Anhalt | 5.0% |
| Berlin, Hessen, Mecklenburg-Vorpommern | 6.0% |
| Brandenburg, NRW, Schleswig-Holstein, Thüringen, Saarland | 6.5% |
Comparison: Gross vs. Net Rental Yield
Assumptions: Purchase costs of 10%, non-recoverable operating/maintenance costs at 15% of annual cold rent:
| Purchase Price | Cold Rent/Month | Annual Cold Rent | Gross Yield | Net Yield | Multiplier (Kaufpreisfaktor) |
|---|---|---|---|---|---|
| 150,000 € | 600 € | 7,200 € | 4.80% | 3.71% | 20.8 |
| 250,000 € | 850 € | 10,200 € | 4.08% | 3.15% | 24.5 |
| 350,000 € | 1,100 € | 13,200 € | 3.77% | 2.91% | 26.5 |
| 500,000 € | 1,500 € | 18,000 € | 3.60% | 2.78% | 27.8 |
German Real Estate Tax Benefits
- Building Depreciation (AfA): 2% of the building value per year (3% for new buildings completed after 2023).
- Loan Interest: Deductible in full against rental income (§ 21 EStG).
- Renovation Costs: Fully deductible in the year incurred, provided they don't exceed 15% of the building's value within the first three years of acquisition.
- Tax-Free Sale: Capital gains on rented properties are completely **tax-free** after a **10-year holding period** (§ 23 EStG).
Sources: §§ 7, 21, 23 EStG, Grunderwerbsteuergesetz (GrEStG), BGB, as of 2026.