How to Start Investing in German Property as an Expat 2026

The simplest first investment, the cash it takes in three states, where the yields are, the tax levers that matter, and what each kind of helper does and does not do.

Quick answer

Buy one existing flat, let it long term, finance up to 80 percent of the price if you live in Germany, pay 5.5 to 8.5 percent purchase costs from equity, and fix the tax structure before signing. LDP starts at a 100,000 euro purchase price.

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. 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 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 the purchase prices ran from 164,500 EUR to 730,000 EUR with a median of 505,000 EUR, which shows where most first-time expat buyers actually land.

One number to keep in view from the start: across all published LDP cases the average gross yield was 2.9 percent at purchase and 5.3 percent after renovation, conversion or re-letting. A first investment is bought on the second figure, not the first, and the work between the two is what 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. Up to 80 percent of the purchase price is LDP's working loan-to-value figure; published broker figures go to 90 percent. 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. Not financed by LDP. 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

Banks never 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 the two loan-to-value bands that apply to expats.

Equity for a 300,000 EUR flat, purchase costs at the 2026 state rates plus 2 percent notary and land registry, no agent commission included
Item	Bayern (3.5%)	Berlin (6.0%)	Nordrhein-Westfalen (6.5%)
Transfer tax	EUR 10,500	EUR 18,000	EUR 19,500
Notary and land registry at 2%	EUR 6,000	EUR 6,000	EUR 6,000
Purchase costs in total	EUR 16,500 (5.5%)	EUR 24,000 (8.0%)	EUR 25,500 (8.5%)
Equity at 80% loan-to-value (20% of price plus costs)	EUR 76,500	EUR 84,000	EUR 85,500
Equity at 55% loan-to-value (45% of price plus costs)	EUR 151,500	EUR 159,000	EUR 160,500

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.

Selected cities from the LDP city dataset, July 2026: average purchase price, cold rent, gross yield and vacancy
Tier	City	Price EUR per sqm	Cold rent EUR per sqm	Gross yield %	Vacancy %	Transfer tax %
Tight and expensive	Munich	8,200	21.44	3.2	0.1	3.5
Tight and expensive	Berlin	5,320	18.00	4.1	0.3	6.0
Tight and expensive	Stuttgart	4,310	16.76	4.5	0.5	5.0
The middle	Nuremberg	3,680	11.97	3.9	0.8	3.5
The middle	Cologne	4,277	14.70	4.1	0.8	6.5
The middle	Duesseldorf	4,435	15.41	3.5 to 4.2	1.59	6.5
The middle	Karlsruhe	4,206	11.94	3.4	0.7	5.0
Higher yield, real vacancy	Bremen	2,934	10.49	4.3	3.7	5.5

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 cases show an average gross yield of 2.8 percent at purchase and 5.2 percent after the work, with cold rent 1.9 times the previous rent. Across all published cases the 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 tell you what the same flat pays once it is converted, renovated or re-let. A first investor should read both numbers and buy on the second, 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 has delivered.

Modernised studio or renovated flat, let as one unit. The plainest route: buy, refresh, re-let at market. Published cases of this type show gross yields of 2.9 to 4.9 percent and cold rent 1.8 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 cases show average cold rent of 1,201 EUR before and 2,369 EUR after, a 2.0 multiple, with average gross yield of 2.8 percent before and 5.4 percent 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 lift from 2.9 to 4.9 percent with a median purchase price of 307,000 EUR; Munich co-living runs from 2.7 to 5.4 percent at a 2.0 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 Berlin and Munich 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 viewing under the GEG, 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 cases the median first-year tax benefit 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 (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.

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, designs the tax structure 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.

How LDP handles this for clients

LDP Group is a Munich-based firm, active since 2022, 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 and Karlsruhe, 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: LDP designs the structure; the tax advice and filings come from the partner firm Helm & Partner, 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 structure design 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 client cases. They describe what past work delivered, not what a specific flat will deliver, and 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 from June 2026. Individual banks go above or below them depending on the borrower, and published broker figures reach 90 percent for residents.
The city dataset is dated July 2026; prices, rents and vacancy are city averages, and the spread inside a city is wider than the spread between 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, both last amended by the Wachstumschancengesetz.
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.

Last reviewed September 14, 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

How much money do I need to start investing in German property?

The equity for the price share the bank does not finance, plus the purchase costs. A resident of Germany at 80 percent loan-to-value needs 76,500 EUR for a 300,000 EUR flat in Bayern and 85,500 EUR for the same flat in Nordrhein-Westfalen. An EU resident abroad at 55 percent needs roughly double. The 100,000 EUR figure LDP quotes is a minimum purchase price, not a cash requirement.

Can a non-resident get a German mortgage for an investment flat?

Yes if the buyer lives in another EU country, at 50 to 60 percent of the purchase price on LDP's working figures as of June 2026. Residents of Germany, whatever their nationality, are financed up to 80 percent. Buyers living outside the EU are not financed by LDP. Non-euro income is discounted by up to 25 percent in some cases before the loan is sized.

Is Munich a bad place to invest if the yield is only 3.2 percent?

Not on the case figures. The 3.2 percent is the city average for flats as they stand, with vacancy of 0.1 percent and Germany's lowest transfer tax at 3.5 percent. LDP's published Munich cases show an average gross yield of 2.8 percent at purchase and 5.2 percent after conversion, renovation or re-letting, with cold rent 1.9 times the previous rent. The lift is the investment, not the average.

What is the biggest tax lever on a first rental flat in Germany?

Building depreciation under § 7 Abs. 4 EStG, at 2 percent a year for most existing buildings, on the building share of the full acquisition cost including transfer tax and notary. It is followed by loan interest and running costs as Werbungskosten under § 9 EStG. Across LDP's published cases the median first-year tax benefit was 21,400 EUR, within a range of 4,800 to 58,320 EUR.

Who should I talk to first: a broker, an advisor or a full-service firm?

Whoever will tell you the loan-to-value your residency allows before showing you a flat. A mortgage broker does that but does not source property or plan tax. A full-service firm does all four parts in one process; the questions to ask it are who pays for each part and whether the property comes from the open market. LDP's screening call is free and takes 30 minutes.