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Investing in Rental Properties in Germany as an Expat

September • 20th, 2021
by Martina Chalar, co-founder HORBACH Expats

Houses in Germany

No cross-countries tenants-chasing: investing in rental properties 


One of the most efficient tax-saving assets available in the market is rental properties. In this article we will explain what they are and why it is especially interesting for expats in Germany.


If after reading this article you would like to know more, get in touch with the HORBACH Expats team.


What you should know about rental properties in Germany before investing. And why they are worth it.


What is a rental property?

A rental property is a real estate object you purchase and which belongs to you but which is ideally managed, allowing you to so that you can step back and be the investor while rent comes in steadily every month. Because it’s a purchase that generates you more money, we call this an asset, and it is a clever way of creating wealth for expats in Germany. 


There are different types of rental objects – each of them bringing you different advantages and requiring different approaches: 


Type 1: You can purchase an existing object (and perhaps even renovate it or have it renovated),  

Type 2: You can purchase an object which is currently being built

Type 3: You can invest in historical buildings, 


If you want, you can even go for a mix of all three types.


What are the advantages of owning a rental property?


A lifelong asset

You now possess a lifelong asset that, when played well, continues to increase in value over time so it does not only generate income for you monthly but also adds to your wealth.


Say hello to tax benefits – on steroids

Should you take out a loan to purchase your objects this would significantly help in repaying it faster and more efficiently. Every bit counts in the long term in a country where the maximum tax bracket (not unusual for highly qualified labor!) is at 42%


Easy to grasp investment

It’s one of the easiest-to-grasp types of investments because it entails a physical object which can always be resold or renovated if desired while providing stability and stable value accruement.


Passive income

It requires a lot less own equity than just buying real estate for your own use allowing you to leverage your cashflow with passive income for the years to come way faster and smarter.


A steady income source

Regardless of where you end up in the world, you still have an income source – ideally being managed. 


What is different when you are an expat?


Being an expat adds multiple layers of complexity to the topic of rental properties. Which means there is a lot to consider before, during, and after purchasing your coveted object. Also, loan eligibility needs a lot more thorough previous checking process. No worries, we are here to help you!


Why is buying rental property specially interesting for expats in general?


Low risk for „later-in-life“ investments

Expats tend to start their financial journeys later in life, which rental properties allow with less risk than other investments


No cross-countries tenants-chasing

You are not chasing tenants around for their rental fees, traveling every weekend to the object to play custodian, and suffering headaches in the long-term by owning something abroad should you relocate back or move somewhere else.


Horbach Expats benefits

The German market is not only thoroughly regulated but also more stable than most developed countries. Additionally tax beneficial investments are available in the market.

What is relevant when choosing an object?


There are several points to take into consideration when you choose a property. In general these are:


General location

Is the city growing steadily? Are the inhabitant influxes positive? Is it well connected to public transportation? What are the regulations?



Not the same considerations for an object meant for families (well connected to kindergartens, schools, and doctors) than for seniors (nursing care facilities, accessibility) or for students (short distances, smaller units, active nightlife).


Future uses

If you ever plan on inhabiting this yourself in the far future or if it’s meant as an investment for e.g. your children, this is also definitely something to consider.


Equity available

Less equity is needed both monthly as well as a down payment for most rental properties compared to average housing objects in Germany’s metropolitan areas. 


Structural conditions and developer’s reputation

We have all at some point heard the horror stories related to unfinished projects, accidents on-site, or faulty or wrongly insulated assets


Management strategy 

If you are taking the leap into becoming an investor then you should make sure you are not chasing tenants around for their rental fees, traveling every weekend to the object to play custodian, and suffering headaches in the long term by owning something abroad should you ever relocate somewhere else.



What can the HORBACH Expats team help you with? 


With the entire process from A to Z. Together with our partners and our team of experts, we do not only have the properties, but also the managed concepts behind it. If you’re lucky, sometimes the possibility to guarantee the objects are always being rented out is an option! 


Additionally, we at HORBACH Expats know how hard it can be to take care of bureaucracy when being an expat – so we manage the entire paperwork, loan application, and arrange visits to the sites. Additionally, we facilitate access to a legal and fiscal team that can assist with the areas beyond the scope of our services. All of that in the language of your choice! 

Horbach Expats Contact

What are you waiting for?

Request your initial consultation with the HORBACH experts HERE They are happy to help you find your perfect rental property in Germany!

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