Are you wondering what rent you can charge for your house without taking legal risks? The answer lies in an accurate analysis of rent indices, location, and amenities. This guide shows you how to determine the optimal rent price using data-driven methods and avoid pitfalls.
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The topic briefly and concisely
The local comparable rent, determined by rent indices or comparable properties, is the legal basis (§ 558 BGB) for setting any rental price.
Legal regulations, such as the rent control (maximum 10% above the local comparative rent for new leases) and the capping limit (maximum 20% or 15% increase within 3 years), limit the rental price.
The precise calculation of living space according to the Housing Area Ordinance (WoFlV) and a correct allocation of operating costs are crucial to avoid legal conflicts and financial disadvantages.
Setting an appropriate rental price is one of the most critical decisions for property owners. A price set too high leads to vacancies, while a price set too low reduces your return by thousands of euros per year. Therefore, the central question is: What rent can I ask for my house? The answer requires more than a gut feeling; it is based on the local comparable rents, legal regulations like rent control, and an accurate evaluation of your property. With the right strategy, you secure not only a market-appropriate rent but also a legally sound and profitable tenancy. This article guides you through the crucial four steps to finding the optimal rental price.
Step 1: Use the local comparative rent as a foundation
The basis of any rent calculation is the local comparative rent. It represents the average rents paid for comparable living space over the past six years. This is legally anchored in § 558 of the German Civil Code (BGB) and serves as the primary benchmark. There are four recognised methods for finding the correct comparative rent.
Applying the rent index correctly
The rent index is the most common tool for determining the comparative rent. A distinction is made between simple and qualified rent indexes, with the latter being created according to scientific principles and having greater evidential value in court. Since 2024, cities with more than 50,000 inhabitants are required to create qualified rent indexes, increasing transparency for over 70 cities. A typical rent index includes a base rent per square metre, adjusted by surcharges or discounts for specific features such as a balcony or bathroom fittings. For precise classification, it is crucial to correctly place your own property within the respective range of the rent index. A data-driven analysis, like that offered by the Auctoa Rent Yield Calculator, can assist here.
Alternative methods when there is no rent index
If there is no rent index for your community, you can turn to three alternatives. One option is to name at least three comparable flats that are similar in location, size, and features. The important point here is that the rent can only be set at the lowest value of the three comparative rents. Another option is an expert opinion from a publicly appointed and sworn expert, which can, however, incur costs of several hundred euros. As a third option, there are rent databases maintained by interest groups, but these are less common in practice. These methods ensure that your rent demand has a solid, comprehensible basis even without a rent index.
Step 2: Check legal limits such as rent control and capping limit
Even if the comparable rent justifies a high price, laws set clear limits. Particularly in urban areas, they prevent uncontrolled rent increases. Two instruments are crucial here: the rent control for new rentals and the capping limit for existing contracts.
Rent Control in Tense Housing Markets
In areas with a tense housing market, the rent control (§ 556d BGB) applies. It stipulates that upon re-renting, the rent may exceed the local comparable rent by a maximum of 10%. Which cities are considered tense markets is defined by the federal states in their own regulations. However, there are exceptions: new buildings first occupied after 1 October 2014 and extensively modernised apartments are exempt from the regulation. A modernisation is deemed extensive if the costs reach about a third of a comparable new building. To avoid legal conflicts, you should check whether your location is affected, which you can often determine through an online inquiry of the rent index.
Capping Limit for Rent Increases in Existing Tenancies
For existing tenancies, the capping limit (§ 558 para. 3 BGB) restricts the scope for increases. Over three years, the rent may not rise by more than 20%, even if the local comparable rent has not yet been reached. In many cities with scarce housing, this limit has even been reduced to 15%. This regulation applies regardless of rent increases due to modernisations or increased operating costs. Adhering to this percentage limit is a material prerequisite for the validity of any rent increase. Whether you rent or sell, knowing these limits is crucial to your strategy.
Step 3: Evaluate value drivers such as location, features, and condition
Alongside legal requirements, the specific characteristics of your house significantly influence the achievable rental price. A detailed analysis of location, amenities, and energy condition can increase the value by 15-20%. The three most important factors are:
The micro-location: The immediate surroundings are crucial. Good access to public transport, proximity to schools, doctors, and shopping facilities can increase rent by up to 10%. Noise from a main road, on the other hand, can result in a 5% reduction.
The amenities: High-quality features justify a higher price. These include a modern fitted kitchen (can increase rent by 1-2 €/m²), a balcony or terrace, real wood parquet, or a renovated bathroom. Even installing a new shower can noticeably enhance the living value.
The energy condition: Low energy consumption is a strong argument. A good rating on the energy certificate (e.g., class A or B) and modern windows can reduce tenants' additional costs by over €200 per year and justify higher cold rent.
These factors are directly taken into account in the rental index classification and are your most important arguments for rental prices at the higher end of the scale. A professional rental price determination systematically considers these details.
Step 4: Calculate Living Space and Additional Costs Accurately
The exact living area is the basis for calculating the rent and many additional costs. Errors here can lead to rent reductions of up to 10% if the actual area differs significantly. Likewise, a transparent breakdown of ancillary costs is crucial for a good rental relationship.
Accurately determine the living area according to WoFlV
Unless otherwise agreed in the rental contract, the Wohnflächenverordnung (WoFlV) is the standard. It defines exactly how different areas are accounted for:
Rooms with a ceiling height of at least 2 metres count 100%.
Areas under slopes with a height of 1 to 2 metres count 50%.
Balconies, loggias, and terraces are usually counted at 25%, and up to 50% for very high quality.
Unheated conservatories and swimming pools count 50%.
Basements, boiler rooms, and garages are not part of the living area.
An incorrect calculation, such as one favouring sellers under DIN 277, can lead to legal issues when renting.
Define apportionable ancillary costs
In addition to the basic rent, tenants pay an advance payment for operating costs. The Betriebskostenverordnung (BetrKV) stipulates which costs can be apportioned. There are over 15 different items included, such as:
Property tax
Water and sewage costs
Heating and hot water
Lift operation
Street cleaning and waste disposal
Garden maintenance
Building insurance
Caretaker services
Administration costs or repair costs, however, are not apportionable and must be borne by the landlord. A precise understanding of these items is essential for profitable operation, as shown by our economic efficiency calculator.
Special Case: Rent Increase After Modernisation
Investments in your property can not only increase its value but also justify a rent increase. The law allows a portion of the modernisation costs to be passed on to tenants. According to § 559 BGB, you can increase the annual rent by 8% of the modernisation costs attributable to the apartment. It is important to distinguish this from mere maintenance – replacing a broken window is maintenance, whereas installing triple-glazed windows instead of double-glazed ones is a modernisation. You must deduct the costs of the maintenance portion.
Additionally, there is a capping limit: the monthly rent may not increase by more than 3 euros per square metre within six years due to modernisation. If the rent is below 7 euros per square metre, the limit is even just 2 euros. Before taking measures, you should check the applicability of the cost distribution. Consulting, for example through our Investor Advice, may be worthwhile here. If you rent out an inherited house, these regulations are particularly important to fully exploit the potential.
Conclusion: A data-driven rental price strategy maximises the yield
The question "What rent can I charge for my house?" cannot be answered across the board. A well-founded answer requires a systematic analysis that begins with the local comparative rent and considers legal limits such as rent caps and capping limits. The key factor for achieving above-average rent lies in the detailed assessment of location and amenities. Correct calculation of living space and ancillary costs protects you from legal disputes and financial losses. Instead of relying on intuition, you should base your decisions on data-driven evaluations. Tools like the ImmoGPT chat from Auctoa can provide you with a quick initial assessment and make complex issues understandable. This ensures you achieve fair, market-appropriate, and above all profitable rent for your property.
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Additional useful links
The Statistische Bundesamt provides a comprehensive overview of housing in Germany, including relevant statistics and information on living conditions, costs, and residential construction.
A specific table from the Statistische Bundesamt illustrates the ratio of rent to household net income in Germany.
The Deutsche Bundesbank offers a detailed indicator system with key data and analyses on the German residential property market.
The Deutsche Mieterbund provides a collection of relevant figures and facts related to renting and housing in Germany on its website.
FAQ
What rent can I charge for my house without a rent index?
Without a rent index, you can determine the local comparable rent through an expert report or by naming at least three concretely comparable apartments. Their rental prices then serve as a reference for your demand.
Does the rent control apply to single-family homes?
Yes, the rent control applies to all residential spaces in the designated areas, including single-family homes. Exceptions such as new construction or extensive modernisation also apply here.
How often am I allowed to increase the rent?
An increase in rent up to the customary local comparative rent is permissible at the earliest one year after the last increase or after the tenant's move-in. There must also be at least two full months between the receipt of the increase letter and the time it becomes effective (consideration period).
Does a hobby room in the basement count towards the living area?
No, according to the German Living Space Ordinance (WoFlV), basement rooms do not generally count as living space, even if they are used as hobby rooms. They are considered ancillary rooms.
What is the difference between cold rent, warm rent, and gross rent?
The net rent (basic rent) is the pure amount for the use of the space. The gross rent (inclusive rent) additionally includes the advance payments for heating and hot water costs. The gross basic rent includes all cold operating costs, but not the heating costs.
How can Auctoa help me set the right rent?
Auctoa offers AI-driven property valuations that analyse all relevant factors such as location, amenities, and current market data. Our ImmoGPT chat can also quickly and easily answer initial questions regarding legal regulations and rent price determination.
