Engel & Völkers Hamburg explains: How does a graduated rent increase work?

Renting out a property in Hamburg: what the term “graduated rent” entails

In a graduated rent agreement, unlike traditional rental arrangements, it is predetermined from the start that the monthly rent for the respective apartment or unit increases at previously set intervals. These intervals can be determined for an indefinite or fixed period, but must have at least one full year between increases. It's important to note that during the period of a graduated rent contract, no additional rent increases—such as those following renovations or adjustments to local benchmark rents—can be made. Nevertheless, for owners who wish to consistently ensure maximum returns on their rented apartment or unit, graduated rent offers several advantages, which real estate agent Engel & Völkers Hamburg will outline in the following section.

Your advantages when applying the graduated rent procedure for your new rental agreements

Once a graduated rent is agreed upon, the increase in rent for the respective apartment or unit in Hamburg Wilhelmsburg becomes effective automatically on the specified dates. Landlords no longer have to deal with individually calculated and justified rent increases, which significantly reduces administrative effort. Moreover, with the staggered increase of the rent amount, the legal cap may be exceeded, which otherwise stipulates that rent can only be increased by up to 20% over three years. However, the rent brake applicable in tense housing markets like Hamburg places limits on graduated rents: each increase may only exceed the local comparative rent by a maximum of 10% at the relevant time—unless the rental agreement was made before the rent brake took effect, in which case this limit can be exceeded.

Additionally, you can tie the graduated rent of your property in Hamburg Wilhelmsburg to a unilateral waiver of termination by the tenant, providing a high degree of predictability for expected income. The real estate team at Engel & Völkers Hamburg is happy to assist you in setting up an efficient graduated rent increase for your rental apartment or unit in Wilhelmsburg and finding a suitable tenant promptly. Feel free to contact us for support.

Agreeing on graduated rent for a property in Hamburg correctly: precise wording is key

A permissible graduated rent increase always requires written documentation in the lease agreement signed by both parties. It is essential to pay attention to the legally required wording—otherwise, the graduated rent agreement for the apartment or unit in Hamburg Wilhelmsburg could still be contested even after it is concluded. For instance, the timing of each increase must be clearly stated with a calendar date, even if it adheres to the legally mandated minimum interval of one year. Terms such as "annually" or "every 18 months" are invalid. Additionally, the amount by which the monthly rent will increase must be stated as an absolute figure for each individual increase, so fractional or percentage values like "...by one eighth" are not allowed.

Our knowledgeable real estate agents understand the other details that must be considered when drafting a graduated rent agreement. When you choose to work with Engel & Völkers Hamburg, you also benefit from our extensive experience in all other aspects of renting out your property in Hamburg Wilhelmsburg, our wide network of contacts, and our quality-focused, dedicated approach. We would be happy to present our services to you personally, free of charge and without obligation, and address all your questions—we look forward to your call!