Rent out Apartment
What to look out for when renting an apartment?
If you own your own home and would like to rent it out permanently, it is a good idea to consider the basic aspects in advance. As real estate experts, we support you in your search for suitable tenants and advise you on possible returns.
1. Obtain professional advice
We support you in the optimal exploitation of your investment in real estate. For this purpose, we make our expert knowledge available to you in order to advise you on determining the right rental price. In addition, we prepare meaningful exposés, carry out inspections with interested parties and help you with tenant selection, credit assessment and the drafting of contract documents. We will also be happy to place advertisements for you on relevant platforms.
2. Information on financial issues
So that you get the best possible return, we take care of determining the optimum rent. Here we use our many years of experience and comprehensive knowledge of the real estate market. We know the target groups in the respective districts and know the characteristics that distinguish a location.
3. Drafting and concluding contracts
As a rental service, we take care of the drafting of the rental agreement and ensure that your requirements as a landlord are fully met. We always take into account the current legal situation, for example with regard to the execution of cosmetic repairs.
Rent ApartmentRenting a condominium is a decision that has long-term consequences and must therefore be well planned. Future landlords should not only deal with legal and tax aspects of letting, but also make practical considerations: How do I find a suitable tenant? What expenses can I expect and what profit can I make? Are there obstacles that make letting uneconomical? In the following article we explain what you have to consider in order to make renting your apartment a successful project.
A landlord's tasks: What you need to consider
When renting an apartment, the owner has additional duties in addition to those he already had in relation to his residential property and towards the community of owners. For example, he continues to be responsible for the proportional maintenance of communal property, must attend owner meetings and ensure that his tenants observe the house rules and any existing usage regulations. The tenants, on the other hand, have obligations that mainly relate to the maintenance of the apartment and the settlement of running costs. These include, for example:
- the preparation of the annual utility bill for the tenant,
- the organisation and execution of necessary repairs or renovations,
- Communication with the tenant in the event of termination or planned change of tenant.
Further obligations arising from the letting of a condominium are:
- the disclosure of rental income in the income tax return,
- the presentation of the economic efficiency of the letting for the tax office,
- ensuring accessibility and usability of the apartment,
- ensuring that the apartment can be heated from 1 October to 30 April of the following year (residential heating period),
- allowing the subletting to take place if the tenant has a legitimate interest in doing so
- allowing the accommodation of close relatives of the tenant, if the apartment is not overcrowded as a result.
Before making a final decision about renting, you should also check whether you are prepared to waive the right to use your property for a very long period of time and whether the rent you want to achieve is realistic and, above all, legally correct.
Letting yourself or hiring brokers - advantages and disadvantages at a glance
In order to rent an apartment successfully, you first need time. In some cases a tenant may find himself in the circle of acquaintances through personal contacts and enquiries, but you should not assume this. Usually, you will have to advertise your property in a newspaper or on a property website to draw the attention of people looking for accommodation. If you don’t want to do this yourself, it’s a good idea to hire a professional real estate agent. The advantages are obvious:
- A professional takes care of all necessary steps up to the letting – from the meaningful apartment advertisement up to the conclusion of the lease contract.
- You are relieved of a lot of time, as you do not have to be present in person for viewing appointments.
- Inquiries from potential tenants are answered by the broker
- On request, the broker can pre-sort the enquiries according to your criteria and suggest suitable tenants.
- The real estate agent will advise you on request regarding pricing and drafting of the rental agreement.
The disadvantage of hiring a broker, on the other hand, is that you have to bear the costs yourself in accordance with the buyer principle that has been in force since 1 June 2015. The buyer principle means that the commission is paid by the person who commissions the broker – usually the landlord. The broker’s commission for a rental property is up to two net cold rents plus VAT.
If you want to take care of letting your property yourself, you will save these costs, but you will have to invest a lot of time: The content of the advertisement, the contact with interested parties, the organisation of apartment visits, the selection of the future tenant and the conclusion of the rental agreement all involve considerable effort. The decision for or against hiring a real estate agent should therefore also depend on criteria such as the condition of the rental property, location and amount of rent: Very well-equipped apartments in a central location and with a reasonable price-performance ratio are let more or less automatically – for all other properties, however, the expertise of a real estate professional often means valuable support.
Successfully offer: How to design a professional exposé
Regardless of whether you advertise yourself or hire a real estate agent: in order to find a suitable tenant for your apartment as quickly as possible, it is important to provide interested parties with all the important information about the property in a compact form. The best way to do this is to create an exposé. This should not only contain essential key data such as rent, living space, room layout and location, but should ideally be supplemented by picture material, links to videos and a description of the special advantages of the offered apartment.
Information that you should never forget in an exposé is:
- the number of square metres of the total living space and the individual rooms,
- a floor plan,
- the location of the object, ideally with a link to an online city map or map,
- the rental price including operating costs,
- the amount of the deposit,
- the amount of any additional costs,
- the equipment of the object and possible special advantages: Type of heating, kitchen and kitchen utensils, balcony/terrace/garden, common rooms, garage, etc,
- Connection to public transport and infrastructure in the immediate proximity (schools/kindergarten, shopping facilities, leisure facilities/green spaces, medical care facilities)
- earliest possible reference date
An essential factor in drawing the attention of potential interested parties to an exposé is the use of meaningful images or videos. As convincing as the description in the exposé may be, people looking for accommodation hardly arrange appointments for viewing objects of which they do not have any visual impression. Therefore, be sure to use images of your home that are as realistic as possible, showing the rooms in daylight and from different perspectives. A possibility for the virtual inspection in form of a video link rounds the optical representation off and represents for most prospective customers a welcome additional decision making aid.
If you use your exposé for an advertisement, you must also bear in mind that certain information on the energy efficiency of a property is mandatory. These are data from the energy performance certificate, which has been mandatory since 2015 when renting or selling a property and which is always issued for a building but not for a single apartment.
Which information on energy efficiency is actually mandatory depends on the type of certificate (demand or consumption certificate). Possible information is:
- Energy source (heating)
- Final energy consumption or final energy demand
- Energy efficiency class and comparative values
How do you determine the right rental price?
When determining a rental price, you should consider several criteria: A realistic rent that is in line with the market and based on the local rent index not only increases your chances of finding a tenant – it may also protect you from threatening disputes under tenancy law. Several sources can be used to determine a realistic rental price. The rent index applicable in each case serves to determine the comparative rents customary in the locality: They may not be exceeded by more than ten percent. In locations without a rent brake, a maximum of 20 percent is considered to be permissible.
The location, equipment and general condition of the apartment are also helpful in the assessment. If comparable apartments have been on the market for a very long time, you should consider reducing the rent in order to find a tenant more quickly. If you are not sure whether you have taken sufficient account of all the criteria for determining a feasible rent, there is help on the Internet: Numerous real estate websites provide free rental price checkers. All you need to do is enter the most important key data for your rental property, and the price is determined automatically.
Organization of inspections: How it works without problems
Apartment visits are relatively time-consuming, especially if there are a lot of interested parties and you do not want to arrange mass appointments. It therefore makes sense to clarify with prospective tenants by telephone in advance of the visit whether the property on offer really meets their expectations and financial possibilities, how many people will move into the apartment together with the future tenant and whether there are any special wishes or ideas that should be taken into account.
If possible, arrange several appointments in one day, at intervals of 30 to 45 minutes – this will give you sufficient time to get to know each prospective tenant personally and answer questions. Avoid answering questions from prospective tenants that are euphemistic or factually incorrect: Trampeling toddlers or barking dogs are unpleasant surprises for those seeking rest, also outdated installations or an insufficiently waited hot spring might cloud the relationship to the future tenant substantially with nonmentioning.
How do you select the right tenant?
Ultimately, sympathy and “personal chemistry” are decisive – but you should also pay attention to a few formal criteria when selecting your future tenant. These include, in addition to a credit check, obtaining a tenant’s self-disclosure statement and a rental debt exemption certificate. For the latter two, sample forms exist on various websites that can be downloaded and printed out. Make sure, however, that these forms come from a reputable source and do not contain any questions that are not legally permissible – such as questions about criminal records, a planned or existing pregnancy or membership in associations or parties.
It is also customary to require proof of the future tenant’s income, for example in the form of the last three pay slips. If the tenant has no income of his own, as is often the case, for example, with students, you can alternatively demand a guarantee from the parents.
Questions about characteristics or activities that may be a burden on the community – such as making music, smoking or a planned commercial activity within the living quarters – are also permitted.
How to create a correct rental agreement
The tenancy agreement for a residential property must not only comply with the statutory provisions, it should also list all agreements, rights and obligations to which the tenant and landlord are jointly committed.
There are also various sample forms for the rental agreement, which can be downloaded from the websites of tenant and landlord protection associations. Of course, the main points of interest here are different and it is recommended to pay attention to a compromise acceptable to both parties. Since the conclusion of a tenancy agreement has far-reaching consequences for the contracting parties involved, it makes sense to have it checked by a real estate law expert beforehand.
There are basically three types of rental agreement:
- the standard rental agreement, which does not permit an increase in the rental price for the entire duration of the tenancy
- the staggered rental agreement, which sets a time and financial framework for possible rent increases,
- and the index-linked rental agreement, which allows an annual adjustment of the rental amount linked to the consumer price index.
In general, the rental agreement should contain all important details about the rental property – name of the rental property, exact living space, rent and ancillary costs, start and, if applicable, end of the rental agreement. Tenants and landlords must also be named in the contract.
You should also hand over the house rules to your tenant when the contract is concluded.
Housing handover: What is to be considered?
Once the contract has been concluded, the next step is to hand over the apartment. You should draw up a so-called handover protocol in which the condition of the apartment at the time of handover is confirmed by both parties.
The handover protocol usually contains the following information:
- the names of the present persons at the handover,
- Date and time of handover,
- Number of house gate and apartment keys handed over,
- any existing defects or damage to the rental property,
- the meter readings of electricity, gas and water meters,
- the district heating meter reading, if any.
The acceptance report shall be drawn up in duplicate and signed by both contracting parties, each receiving one copy.
How to tax your rental income correctly
If your apartment or house has been successfully rented, you will have to pay the correct tax on the rental income, as it is an income. The exact amount depends on your individual tax rate. As a rule, both cold rent and ancillary costs count as income. Expenses that are documented in the property management statement may be deducted from this. This means that you may claim the so-called depreciation (deduction for wear and tear), which is intended to cushion the loss in value caused by wear and tear on the building fabric for tax purposes.