Most buyers focus on the purchase price and closing costs. They run the numbers on Grunderwerbsteuer, notary fees, and agent commission, and then assume the property will simply generate rent. But the gap between gross rental income and what actually lands in your bank account is filled with ongoing costs that many first-time landlords only discover after the keys are handed over.
This guide covers the recurring costs that eat into your yield, some obvious, some hidden, and some that recently changed due to legal reform.
Hausgeld: the monthly bill most buyers underestimate
If you’re buying an apartment (Eigentumswohnung), you’ll pay Hausgeld every month to the WEG (Wohnungseigentümergemeinschaft). This is the single largest ongoing cost for most apartment investors, and it’s non-negotiable, you pay it whether the unit is rented or vacant.
Hausgeld typically covers:
- Building insurance (Gebäudeversicherung)
- Property management (Hausverwaltung)
- Cleaning and caretaker (Hausmeister, Treppenhausreinigung)
- Elevator maintenance (Aufzugswartung), if applicable
- Shared utilities, water, heating for common areas, electricity for stairwells and outdoor lighting
- Garden and grounds maintenance (Gartenpflege)
- Waste disposal (Müllabfuhr)
- Instandhaltungsrücklage, the maintenance reserve (more on this below)
What does Hausgeld actually cost?
A realistic range for 2026:
| Property type | Hausgeld per m² per month |
|---|---|
| Simple building, no elevator | €2.50–€3.50 |
| Standard building with elevator | €3.50–€5.00 |
| Modern building with amenities | €4.50–€6.50+ |
For a 70 m² apartment in a standard building, expect €250–€350 per month in Hausgeld. That’s €3,000–€4,200 per year, before any unit-specific costs.
The critical distinction: umlagefähig vs. nicht umlagefähig
Not all Hausgeld costs can be passed on to your tenant. German law (Betriebskostenverordnung, BetrKV) defines exactly which operating costs are allocable:
You CAN pass on to the tenant (umlagefähig):
- Water and sewage
- Waste disposal
- Building cleaning
- Garden maintenance
- Elevator operating costs
- Building insurance
- Street cleaning and winter service (Winterdienst)
- Chimney sweep
- Shared antenna or cable TV (subject to the 2024 Nebenkostenprivileg abolition, see below)
You CANNOT pass on (nicht umlagefähig):
- Instandhaltungsrücklage (maintenance reserve)
- Property management fees (Verwaltungskosten)
- Bank charges for the WEG account
- Repair costs for common property
The non-allocable portion is typically 20–30% of total Hausgeld. This is pure cost to you as the owner, it comes straight out of your yield and cannot be recovered from the tenant.
Example: Your Hausgeld is €320/month. Of that, €230 is allocable operating costs and €90 is non-allocable (€50 management fees + €40 maintenance reserve). You charge your tenant €230 in Nebenkosten. The remaining €90/month, €1,080/year, is your cost to carry.
Instandhaltungsrücklage: the reserve that’s never enough
Every WEG is required to build a maintenance reserve (Instandhaltungsrücklage) for future repairs and renovations. This is part of your Hausgeld, but it deserves separate attention because it’s one of the most misunderstood costs in German property investment.
How much should the reserve be?
The Peters’sche Formel (Peters formula), widely used in German property valuation, suggests:
- New buildings (0–22 years): €7.10/m² per year
- Older buildings (22–32 years): €9.00/m² per year
- Old buildings (32+ years): €11.50/m² per year
For a 70 m² apartment in a 30-year-old building, that’s roughly €630–€805 per year, or €52–€67 per month.
The Sonderumlage trap
When the reserve isn’t sufficient to cover a major repair, and it often isn’t, the WEG votes on a Sonderumlage (special levy). This is a one-time payment that can range from a few hundred euros to five figures.
Common triggers for Sonderumlagen:
| Repair | Typical cost per owner |
|---|---|
| Roof replacement | €5,000–€15,000 |
| Facade renovation / thermal insulation | €8,000–€20,000 |
| Elevator replacement | €3,000–€10,000 |
| Balcony structural repair | €2,000–€8,000 |
| Heating system replacement | €3,000–€8,000 |
| Pipe renovation (Leitungssanierung) | €4,000–€12,000 |
These costs cannot be passed on to your tenant. They are not Betriebskosten, they are capital expenditure borne entirely by the owner.
Due diligence before buying: Always request the last three years of Eigentümerversammlungsprotokolle (owners’ meeting minutes) and the current Wirtschaftsplan. Look for discussions about upcoming repairs, planned Sonderumlagen, and the current balance of the Instandhaltungsrücklage. A reserve of less than €30 per m² of total building area is a warning sign.
Grundsteuer: the tax that just got reformed
Grundsteuer (property tax) is a recurring annual tax paid by every property owner in Germany. It has existed for decades, but the 2025 Grundsteuer reform fundamentally changed how it’s calculated, and the impact varies enormously depending on where your property is and what it’s worth.
The old system vs. the new system
The old Grundsteuer was based on assessed values (Einheitswerte) from 1964 (West) or 1935 (East), absurdly outdated figures that bore no relation to current market values. The Federal Constitutional Court (BVerfG) ruled this unconstitutional in 2018, and all 16 states were required to implement new assessment models by January 1, 2025.
What changed in practice
Under the federal model (used by most states), Grundsteuer is now calculated based on:
- Bodenrichtwert (land value guideline), this is the key driver
- Living area (Wohnfläche)
- Building age
- Type of property (residential vs. commercial)
- Statutory rent level (Mietniveau-Stufe) of the municipality
Several states opted for their own models:
- Baden-Württemberg: Pure land value model, only the plot matters, not the building
- Bavaria: Area-based model, calculated from plot size and living area only
- Hamburg, Hessen, Niedersachsen: Modified federal models with state-specific adjustments
How much does Grundsteuer cost?
The range is wide because it depends on the municipality’s Hebesatz (multiplier rate):
| City | Typical Grundsteuer B Hebesatz (2026) |
|---|---|
| Berlin | 470% |
| Munich | 535% |
| Hamburg | 975% |
| Frankfurt | 500% |
| Cologne | 515% |
| Rural areas | 200–400% |
For a typical 70 m² apartment worth €300,000 in a mid-sized city, expect €300–€800 per year under the new system. In expensive urban locations with high Bodenrichtwerte and high Hebesätze, it can exceed €1,000.
Can you pass Grundsteuer on to the tenant?
Yes, Grundsteuer is explicitly listed in the Betriebskostenverordnung (§ 2 Nr. 1 BetrKV) as an allocable operating cost. You include it in the tenant’s Nebenkostenvorauszahlung.
However: if the tenant pays a Pauschalmiete (inclusive rent) rather than Kaltmiete plus Nebenkosten, any Grundsteuer increase comes out of your pocket.
Insurance: what you need and what it costs
Gebäudeversicherung (building insurance)
This is typically included in the Hausgeld for WEG properties. If you own a whole building, you pay it directly. It covers structural damage from fire, storm, hail, tap water damage (Leitungswasser), and, if added, natural hazards (Elementarschäden).
Cost: €150–€500 per year for a standard apartment; €500–€2,000+ for a whole building, depending on size, location, and coverage.
Important since 2024: Multiple states are pushing for mandatory Elementarschadenversicherung (natural hazard insurance) covering flooding, earthquakes, landslides, and heavy rain damage. While not yet federally mandatory, the political momentum is building, and properties in flood-risk zones may face significantly higher premiums, or struggle to get coverage at all. Factor this into your location analysis.
Haus- und Grundbesitzerhaftpflicht (property owner’s liability insurance)
If someone slips on ice in front of your building, trips over a loose tile in the stairwell, or gets injured by a falling roof tile, you are liable. This insurance covers third-party bodily injury and property damage claims arising from your property.
Cost: €50–€150 per year for a single apartment; €100–€300 for a small multi-family building.
This is allocable to the tenant as a Betriebskosten item.
Mietausfallversicherung (rental loss insurance)
Covers lost rent if your tenant stops paying or the unit becomes uninhabitable due to insured damage. Premiums vary based on the annual rent and coverage period (typically 6–12 months of lost rent).
Cost: €100–€300 per year for a typical apartment.
This is NOT allocable, it’s your cost as landlord.
Rechtsschutzversicherung für Vermieter (landlord legal protection insurance)
Covers legal costs for disputes with tenants, eviction proceedings, rent arrears, damage claims. German tenancy law heavily favours tenants, and eviction cases can drag on for 12–18 months. Legal costs of €5,000–€15,000 for a contested eviction are not unusual.
Cost: €150–€300 per year.
Not allocable to the tenant.
Verwaltungskosten: managing the property
WEG-Verwaltung (for apartments)
Already included in your Hausgeld. The Hausverwaltung handles the building, accounts, maintenance coordination, owners’ meetings. Typical cost: €20–€35 per unit per month.
Sondereigentumsverwaltung / Mietverwaltung (for your rental unit)
This is optional but common, a property manager who handles your specific rental unit. They find tenants, collect rent, handle complaints, coordinate repairs, and create the annual Nebenkostenabrechnung.
Cost: €20–€35 per unit per month, or 5–8% of monthly Kaltmiete.
For a unit renting at €800 Kaltmiete, that’s €40–€64/month or €480–€768/year.
This cost is NOT allocable to the tenant. If you self-manage, you save this fee but invest your time, and you need to know German tenancy law (BGB Mietrecht) well enough to avoid costly mistakes.
Maintenance and repairs inside your unit
The WEG handles common property. But everything inside your apartment, the Sondereigentum, is your responsibility.
What breaks and what it costs
Budget for these recurring items:
| Item | Typical lifespan | Replacement cost |
|---|---|---|
| Boiler / Therme | 15–20 years | €2,000–€5,000 |
| Kitchen appliances | 10–15 years | €500–€3,000 |
| Bathroom renovation | 20–30 years | €5,000–€15,000 |
| Interior doors | 25–30 years | €200–€500 each |
| Flooring (Laminat/Parkett) | 15–25 years | €30–€80/m² |
| Electrical outlets / switches | 25–30 years | €50–€150 each |
| Interior paint | 5–10 years (between tenants) | €5–€15/m² |
Rule of thumb: Budget 1–1.5% of the property’s current value per year for maintenance and unit-internal repairs. For a €300,000 apartment, that’s €3,000–€4,500/year.
The tenant changeover cost
Every time a tenant moves out, you face costs:
- Cosmetic repairs, repainting (€1,000–€3,000 for a 70 m² unit), floor refinishing, minor fixes
- Vacancy period, typically 1–3 months in most markets. Zero rental income, but Hausgeld and loan payments continue
- Re-letting costs, listing fees, viewings, credit checks (Schufa-Auskunft), new rental contract drafting
- Potential renovation, if the unit hasn’t been updated between long-term tenants, you may need a more significant refresh to achieve market rent
A conservative estimate for tenant turnover: 2–4 months of Kaltmiete in combined costs and lost income. If your tenant stays 5 years, that’s effectively 0.5–1 month of rent per year averaged out.
The Nebenkostenprivileg abolition: a cost shift you need to know
Until June 30, 2024, landlords could include cable TV costs (Kabelgebühren) in the Nebenkosten and pass them on to tenants. This was the Nebenkostenprivileg, and it’s gone.
Since July 1, 2024, cable TV costs can no longer be allocated as operating costs. If your building has a bulk cable contract (Sammelvertrag), this cost is now either:
- Borne by each owner individually, or
- Handled through individual tenant contracts with the cable provider
For landlords: this means losing the ability to pass through €8–€15/month per unit. It’s a small amount individually, but across a portfolio or over years, it adds up.
Grundsteuer and Hausgeld together: the real impact on yield
Let’s put this all together with a concrete example.
Property: 70 m² apartment in a mid-sized German city Purchase price: €250,000 Monthly Kaltmiete: €700
| Annual cost | Amount | Allocable to tenant? |
|---|---|---|
| Hausgeld (allocable portion) | €2,760 | Yes |
| Hausgeld (non-allocable: management + reserve) | €1,080 | No |
| Grundsteuer | €450 | Yes |
| Haus- und Grundbesitzerhaftpflicht | €80 | Yes |
| Mietausfallversicherung | €180 | No |
| Rechtsschutzversicherung | €200 | No |
| Unit maintenance reserve (1% of value) | €2,500 | No |
| Average vacancy cost (amortised) | €840 | No |
| Total annual cost | €8,090 | |
| Of which non-allocable (your cost) | €4,800 |
Your gross annual rent is €8,400 (€700 × 12). After subtracting the €4,800 in non-allocable costs, your net operating income before financing is €3,600, a net yield of 1.44% on a €250,000 property.
Compare that to the gross yield of 3.36% that looked attractive in the listing. This is why running realistic numbers matters, and why our rental yield calculator asks for operating costs, not just purchase price and rent.
Tax deductions that offset your costs
Not all of these costs are pure losses. As a landlord (Einkünfte aus Vermietung und Verpachtung, § 21 EStG), you can deduct:
- All non-allocable costs, management fees, insurance, maintenance reserve contributions (when spent), vacancy costs
- Loan interest (Schuldzinsen), not the principal repayment, only the interest portion
- AfA depreciation, 2% per year for buildings constructed before 2023, 3% for buildings completed from 2023 onwards. Use our AfA calculator to estimate your annual depreciation deduction
- Renovation and repair costs, immediately deductible if they maintain (not improve) the property’s condition (Erhaltungsaufwand)
- Travel costs to the property for management purposes
- Professional fees, Steuerberater, Rechtsanwalt for tenancy matters
At a marginal tax rate of 42%, the €4,800 in non-allocable costs effectively costs you €2,784 after tax. This significantly improves the real economics, but only if you have sufficient other income to offset against.
How to protect yourself before buying
-
Request the full Hausgeld breakdown, not just the total, but the Wirtschaftsplan showing every line item. Calculate the non-allocable share yourself.
-
Check the Instandhaltungsrücklage balance, and compare it to upcoming maintenance needs. A low reserve in an old building means a Sonderumlage is coming.
-
Read the last three Eigentümerversammlungsprotokolle, they reveal planned works, disputes, and the general financial health of the WEG.
-
Get the Teilungserklärung and Gemeinschaftsordnung, these define what you own, what’s shared, and what rules govern the WEG. Restrictions on short-term rental (Ferienwohnung) or commercial use can limit your options.
-
Run the numbers with realistic costs, use our closing cost calculator for the acquisition, our mortgage calculator for the financing, and our rental yield calculator for the ongoing economics. Don’t trust the seller’s Renditeberechnung.
-
Budget for the unexpected, a Sonderumlage, a boiler failure, or a three-month vacancy can turn a profitable year into a loss. Keep a cash buffer of at least €5,000–€10,000 per unit for unplanned expenses.
The difference between a good rental investment and a money pit is rarely the purchase price, it’s the ongoing costs that weren’t in the spreadsheet. Know them before you buy, not after.