Buy or rent in Germany: Which option should you choose?

Renting is a common practice in Germany, far more prevalent than buying property. For example, in Berlin, 84% of residents are tenants compared to only 16% who are homeowners. Although rents have significantly increased in recent years, purchasing property can still be an attractive option for expats, especially if you plan to stay for more than three years. In such cases, the costs of buying property can be quickly amortized.

Renting property in Germany

In Germany, most rental properties are offered unfurnished and without kitchen appliances. Furnished rentals do exist, but they are typically reserved for short to medium-term stays. If you are considering renting a property, it is important to prepare for the purchase of furniture and essential equipment.

To rent a property in Germany, you will generally need to provide the following documents:

• Rental application form: This form is often provided during the property viewing.

• Identification: A copy of your ID card or passport.

• Proof of income: The last three pay slips are required to demonstrate your ability to pay the rent.

• Good conduct certificate: A document from your previous landlord confirming that you have no outstanding rent arrears (Mietschuldenfreiheitsbescheinigung).

• Credit report: A report of your financial situation (Schufa).

In Germany, tenants benefit from strong legal protections. Here are some key points:

• Eviction: A landlord can request the eviction of a tenant only after two months of unpaid rent, but the eviction process can take more than six months.

• Rent increases: Rent increases are limited to once a year and cannot exceed 20% over a three-year period. In some areas, this limit is reduced to 15%. There are also protections against attempts to replace tenants in order to increase rent.

  
  

Conclusion

Understanding these rules and procedures is essential for effectively managing your housing situation in Germany. Our specialized financial advisors can help you navigate the German rental market and optimize your housing choices.

Contact us today for personalized advice on renting or purchasing property in Germany.