How much money do you need to buy a rental property in Germany?

For a first rental apartment in Berlin, Dresden or Leipzig, plan on paying roughly 11 to 12 per cent of the purchase price in cash for purchase costs alone. That is before any down payment. On top of that, you need two reserves that remain untouched after completion: one for the property and one for your household. For an illustrative €250,000 apartment, that comes to around €41,000 to €44,000 of your own money, even if a lender finances the full price.

The monthly side matters as much as the upfront sum. A surplus of €800 a month can comfortably support a rental property, or it can disappear in a single empty month. This guide shows how to test which applies to you, and when continuing to save is the better decision.

German buyers talk about Eigenkapital, meaning the money you contribute from your own funds. It is worth separating what that money pays for.

• Purchase costs (Kaufnebenkosten) are paid on top of the price. They include transfer tax, notary and land registry fees and, where applicable, broker commission. They do not add value that a bank can lend against.
• The down payment is the part of the purchase price you pay yourself. It reduces the loan.

Many German lenders expect buyers to cover at least the purchase costs from their own funds. Contributing less usually narrows the choice of lenders and raises the price of the loan. Some borrowers can finance the full purchase price, which we explain in 100% property financing in Germany. Whether a lender will do so depends on its assessment of you and the specific property, not on income alone.

Transfer tax (Grunderwerbsteuer)

Each federal state sets its own rate. Berlin charges 6.0 per cent of the purchase price (Berlin Senate Department for Finance). Saxony, where Dresden and Leipzig are located, has charged 5.5 per cent since 1 January 2023 (SächsGrEStSatzG).

Notary and land registry fees

Every German property purchase is notarised, and the change of ownership is recorded in the land register (Grundbuch). Both fees are set by statute according to the transaction value, and they rise if a land charge (Grundschuld) is registered to secure your mortgage. Together they are commonly estimated at around 1.5 to 2 per cent of the price. We use 2.0 per cent as a planning assumption below. Ask the notary for a cost estimate once you have a draft contract.

If you are not confident reading a German contract, budget for a sworn interpreter at the notary appointment as well. The notary must be satisfied that you understand what you are signing.

Broker commission (Maklerprovision)

Commission is not always payable. Many listings in all three cities advertise a buyer's share of 3.57 per cent including VAT, but that figure is a market convention, not a legal rate. Some apartments are offered without commission (provisionsfrei).

Where a private buyer purchases an apartment or a single-family house, the law limits how commission is shared. If the broker acts for both parties, each pays the same amount (§ 656c BGB). If only the seller engaged the broker, the buyer cannot be required to pay more than the seller, and payment falls due only after the seller has paid (§ 656d BGB). Confirm with the notary or a lawyer whether these rules apply to your purchase.

Illustrative example: purchase costs on a €250,000 apartment

Inputs: purchase price €250,000; commission assumed payable; no separate payment for a fitted kitchen or furniture. Without commission, each total falls by €8,925.

After completion, you need two separate pools of money.

The property reserve covers costs that belong to the apartment: an empty month between tenants, repairs inside the unit that the owners' association (WEG) reserve does not cover, a shortfall in the year-end service-charge reconciliation, or your share of a special levy (Sonderumlage) for building works. The examples below assume €6,000. An older building with planned roof or façade works may need considerably more, which is why the owners' meeting minutes matter before you set this figure. See the checks to make before buying.

The household reserve covers your own life: job loss, illness, a family emergency abroad, or an unplanned move. Three to six months of essential spending is a common starting point. The examples use three months.

The rule is simple. A euro can sit in only one reserve. If your emergency fund is also your property reserve, you have one reserve, and it is smaller than it looks.

Start with your net monthly income. Subtract your own rent, living costs, insurance, childcare, existing loan payments, pension saving and any money you send to family. If relatives rely on those transfers, treat them as a fixed cost. If they vary, use the higher typical amount rather than the average. What remains is your surplus.

A lender will run its own household calculation (Haushaltsrechnung). Banks often apply standard allowances for living costs and count only part of the expected rent, so their result may differ from yours. The lender's assessment, not your spreadsheet, determines how much you can borrow.

Both households are considering a €250,000 apartment in Leipzig. Both have €800 a month left after all regular spending.

• Household A is a couple, both employed, with €70,000 in savings, no consumer debt and essential spending of €3,500 a month.
• Household B is a single professional who sends €300 a month to their parents and pays €250 a month on a car loan with 12 months remaining. Both amounts are already included in their spending. They have €32,000 in savings and essential spending of €2,400 a month.

Upfront funding

Household A could contribute €25,000, or 10 per cent of the price, and borrow €225,000 while keeping both reserves intact.

Household B is €8,875 short even if a lender financed 100 per cent of the price. A cheaper €180,000 apartment would reduce purchase costs to €19,926, but B would still be €1,126 short and dependent on full financing being approved. The stronger option is to keep saving. At €600 a month, rising to €850 once the car loan ends after 12 months, B closes the gap in about 14 months. Ending the car loan also improves how a lender views B's income.

Adverse-month budget for Household A

Inputs: loan €225,000 at an assumed 3.7% nominal interest rate with 1.5% initial repayment, giving €975 a month (an assumption, not a live offer); cold rent €900; owner-paid costs not recoverable from the tenant, such as the WEG administration fee, reserve contribution and unit management, €150; operating costs normally reimbursed by the tenant, €200.

In a normal month, the apartment needs a €225 top-up and €575 of the surplus remains. In the adverse month, €925 comes from the property reserve, not the household reserve. The €6,000 reserve covers six months like this. It does not cover a prolonged period of rent arrears, which we address in what happens if your tenant stops paying.

Two further points. Around €280 of the first loan payment repays principal. That builds equity, but it does not help pay this month's bills; see rental property cash flow. And a rental loss may reduce your income tax, but relief usually arrives after the annual assessment and is worth only a fraction of the loss. Budget without it.

A steady €800 surplus shows that your household lives within its means, that it could carry a modest monthly top-up, and that it could rebuild reserves after a difficult month.

It does not establish:

• Borrowing capacity. Only a lender's assessment does that.
• Resilience to a lost income. For a couple, run the budget again with one salary removed. If the surplus disappears, see how to stress-test your rental investment.
• Room for other goals. Pension saving, children's costs and future remittance increases draw on the same money.
• A margin for rising costs. Service charges and loan payments at refinancing can increase.

The rent is only the starting point. What matters is what remains after financing, ownership costs and your household's own obligations.

Waiting is often the sound decision. Consider continuing to save, keeping the cash or choosing a different investment if:

• your savings do not cover purchase costs plus both reserves;
• the plan only works if you commit the entire surplus every month;
• you are in a probation period or a residence permit renewal is pending (see mortgages with a Blue Card or temporary permit);
• you may leave Germany within a few years;
• you carry high-interest consumer debt.

How much Eigenkapital do I need for a rental property in Germany?

Many lenders expect you to pay at least the purchase costs from your own funds, which is roughly 11 to 12 per cent of the price in Berlin, Dresden or Leipzig when commission is payable. Some lenders finance more, others ask for a down payment as well. Separately, keep a property reserve and a household reserve.

Can I invest in property with €800 a month?

Possibly. The monthly figure answers only part of the question. You also need savings that cover purchase costs and both reserves, a property whose top-up leaves part of the surplus unused, and a lender's approval.

Are purchase costs lower in Dresden and Leipzig than in Berlin?

Transfer tax is 0.5 percentage points lower in Saxony, which saves €1,250 on a €250,000 apartment. Notary, land registry and commission costs depend on the price and the contract, not on the city.

Do I have to pay broker commission when buying?

Only if the listing and contract provide for it. Commission-free apartments exist. Where the statutory rules for private buyers of apartments apply, you cannot be required to pay more than the seller.

I live outside Germany. Do the same figures apply?

Purchase costs apply in the same way. Financing is often stricter for non-residents, with some lenders requiring more equity or declining to lend. Your country of residence may also tax the rental income, so obtain advice there as well.