Why Germans Love Renting Their Homes

ruggedtoast

Here are some expat Brit landlords complaining on a forum about landlording in Germany from 6 years ago:

http://www.toytowngermany.com/lofi/index.php/t69727.html

Edit: Didnt Rightmove use to have a section devoted to property in German cities, being marketed as excellent rental opportunities?

Mrs Sheffield:

Having been a tenant for 14 years in Germany and now 2 years here in the UK, I can only give you the advice to read up on German rental laws big time. The legal side of things is so different to anything you might be used to from the UK, you are heading for a whole lot of trouble if you don't get it right to the T.

Just a few things from my experience as a tenant:

- Speed of the rental market is completely different in Germany. In the UK it is completely normal to find a place to rent and move in within a week or two. In Germany you have to give at least 3 months notice by law, so everything takes longer.
- Tenants' rights: A lot more in Germany. Something is not working, you don't get it sorted very fast, rent will be withhold or at least a good proportion deducted, completely legal.
- Right of quiet enjoyment: Different definitions in Germany and the UK. Here in the UK it means the landlord can still keep a key to the property, tenants are not allowed to change locks and even though the law says that a landlord is not allowed to enter the premises without the tenants consent, this is often ignored. Try this in Germany and you will find yourself in court quicker than you can even say Hello to your tenant.
- It is quite common in the UK to not permit your tenant to hang pictures, redecorate the property, keep any pets whatsoever, smoke... In Germany I haven't come across any of this nonsense, at least not the decoration bits. I don't think you stand a snowball's chance in hell to rent out a property if you would try to impose such things onto tenants. If you would put such things in a rental agreement, they would not be enforcible.Same goes for smoking (if you try to put it into the contract as a standard term, I think it is different when agreed on as an additional clause. However I would not recommend putting this into a rental agreement whatsoever, as it will greatly limit the number of people willing to take your property) and for small pets (guinea pigs, rabbits, hamsters and anything else that is not likely to cause distress to your neighbours).
- Tenants have a lot more rights in Germany in general and you as a landlord will have to accommodate this. In the UK it is more like a tenant dares to borrow someone's property for money and has to obey to a landlords wishes... in Germany a tenant pays for a property and it is his/her home and can and will be treated as exactly this. Theirs...
- On the bright side, you are able to take a way higher deposit from your tenants (three months rent) to cover damages.

I hope this helps a bit, if not then please excuse and ignore!

ash28

Generali wrote: »

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/?

According to the German census of 2011 45.8% of the population were owner occupiers (he hasn't looked very far for his info).

And the figures from 2010.....

https://www.destatis.de/SiteGlobals/Forms/Suche/EN/Servicesuche_Formular.html?nn=142236&resourceId=47502&input_=142236&pageLocale=EN&searchUrl=http%3A%2F%2Fwww.destatis.de%2FEN%2FHomepage.html&cms_search=housing&submit=senden&sort=score&cms_facet=&documentType=ALL&dateOfIssue=ALL&switchsource=solr+Internet&x=5&y=6



O/O rate is rising, albeit slowly, but then again so are prices. In some of the old West German states the O/O rate is quite high...friends used to live in Baden-Wurttemberg.

Carl31

ruggedtoast wrote: »

Here are some expat Brit landlords complaining on a forum about landlording in Germany from 6 years ago:

http://www.toytowngermany.com/lofi/index.php/t69727.html

Edit: Didnt Rightmove use to have a section devoted to property in German cities, being marketed as excellent rental opportunities?

Thats how it should be here

Kicker

Generali wrote: »

If you don't mind me asking Kicker, why did you start renting out properties? Was it a bad decision or did the numbers change to your disadvantage?

In all fairness, those properties were given to my by my father and equally my sister owns some places. Of course I've not lost any money therefore, but for some reason I can't make a buck on anything since a good 10 years due to various reasons.

Once a tenant falls out, you're oftentimes stuck a year's worth of rent plus utilities ... if you're lucky enough, they'll leave without much hassle, otherwise it can also lead to more headache and pain. The rest is being spent on upkeeping the properties and renovating now and then will cost an arm and a leg. P.ex. building regulations require you to get the facade thermally insulated when you're doing renovation work on it, etc.

Also considering time and effort spent, it's far from an encouraging development. The "Mieterbund" (=cheap way of harrassing the landlord for tenants) alone makes it unpleasant. I consider my properties to be in good standard and condition, but people just want to get on your nerves for the sake of being a member of Mieterbund. Can tell a lot of stories about it already in my 20 odd years of being a landlord.

The bottom line: If you want to spend a lot of time and money, be an a*h*le towards your tenants and pride yourself on low returns, then it's still viable. Try to accomodate all wishes and complaints, then you'll open Pandora's Box. Worst case is you get some unpleasant tenants, it'll become a nightmare quickly as you can't get anyone out, who's trying to make your and their neighbors life hell. Pay them and they might leave.

Also the property market here is much more static than the one in the UK except for some areas. Property turnover a lot less, also costs higher than in UK. For example in my area usual agent fee is 5%+VAT, which comes to 5,95% plus what you call "stamp duty" in UK, which is different from state to state, but can be another 4,5-5,5% on top. Rents are regulated, much lower than in UK, but so are property prices as far as I can tell. We don't have any sort of London'ish markets, but the South is quite expensive compared to the North and so on... Overall quality of properties is better in UK however, which makes me a bit sad to think that my next purchase will have to be in your low value for money area, which it is from my POV.

CLAPTON

Kicker wrote: »

In all fairness, those properties were given to my by my father and equally my sister owns some places. Of course I've not lost any money therefore, but for some reason I can't make a buck on anything since a good 10 years due to various reasons.

Once a tenant falls out, you're oftentimes stuck a year's worth of rent plus utilities ... if you're lucky enough, they'll leave without much hassle, otherwise it can also lead to more headache and pain. The rest is being spent on upkeeping the properties and renovating now and then will cost an arm and a leg. P.ex. building regulations require you to get the facade thermally insulated when you're doing renovation work on it, etc.

Also considering time and effort spent, it's far from an encouraging development. The "Mieterbund" (=cheap way of harrassing the landlord for tenants) alone makes it unpleasant. I consider my properties to be in good standard and condition, but people just want to get on your nerves for the sake of being a member of Mieterbund. Can tell a lot of stories about it already in my 20 odd years of being a landlord.

The bottom line: If you want to spend a lot of time and money, be an a*h*le towards your tenants and pride yourself on low returns, then it's still viable. Try to accomodate all wishes and complaints, then you'll open Pandora's Box. Worst case is you get some unpleasant tenants, it'll become a nightmare quickly as you can't get anyone out, who's trying to make your and their neighbors life hell. Pay them and they might leave.

still don't really understand

If you make no money in relation to the hazzle, why not sell and invest the money elsewhere\/

Tancred

ash28 wrote: »

According to the German census of 2011 45.8% of the population were owner occupiers (he hasn't looked very far for his info).

And the figures from 2010.....

https://www.destatis.de/SiteGlobals/Forms/Suche/EN/Servicesuche_Formular.html?nn=142236&resourceId=47502&input_=142236&pageLocale=EN&searchUrl=http%3A%2F%2Fwww.destatis.de%2FEN%2FHomepage.html&cms_search=housing&submit=senden&sort=score&cms_facet=&documentType=ALL&dateOfIssue=ALL&switchsource=solr+Internet&x=5&y=6



O/O rate is rising, albeit slowly, but then again so are prices. In some of the old West German states the O/O rate is quite high...friends used to live in Baden-Wurttemberg.

One of the reasons for the low owner occupier rate in Berlin and Hamburg may be the strong possibility of finding an unexploded WW2 bomb under the building you are living in. Hardly an incentive for home ownership! :rotfl:

zagubov

CLAPTON wrote: »

do you have any evidence that the family is less important to people living in the UK than to people living in German for whatever reason?

I had a book on countries consitutions and I seem to recall that the fundamental unit of society in Germany is the family not the individual. Has a big impact on what happens when couples with chikldren split up. Anybody know any more?

CLAPTON wrote: »

if letting is so unprofitable in Germany why do people let?

That's got me baffled too


I do note that everywhere in Europe builds bigger houses than us.

In fact, even Japan has more floorspace per person than us, and they're squeezed into low-rise housing on the coast of their country- which grows a subsatntial proportion of its food and has tons of industry.

ruggedtoast

zagubov wrote: »

I had a book on countries consitutions and I seem to recall that the fundamental unit of society in Germany is the family not the individual. Has a big impact on what happens when couples with chikldren split up. Anybody know any more?



That's got me baffled too


I do note that everywhere in Europe builds bigger houses than us.

In fact, even Japan has more floorspace per person than us, and they're squeezed into low-rise housing on the coast of their country- which grows a subsatntial proportion of its food and has tons of industry.

Really? I've lived in Japan and I did not find that to be true.

antrobus

CLAPTON wrote: »

if letting is so unprofitable in Germany why do people let?

Past tax advantages?

I believe it's the case that until recently German tax law meant that you could claim depreciation as a business expense. Something along the lines of - spend €100,000 on a new build property for rent, and you can claim €5,000 a year as depreciation - meaning that the rental income was effectively tax free.

Kicker

As a general rule of thumb it's 2% of acquisition costs over 50 years. Reducing balance depreciation widely not available since the early 2000s. Tax breaks surely played a big role in those calculations like 15+ years ago, but nowadays people coming to their senses also and realize that positive cash flow is a nice thing to have at times...