Renting out properties profitably and securely - with Engel & Völkers Hamburg Elbe
Use your full potential when renting out your property in Hamburg
The renting of apartments, semi-detached houses or single family houses promises regular income and can become an economically worthwhile project. From the outset, however, it is important to pay attention to some fundamental aspects in order to make full use of the potential of your real estate in the long term. As a future landlord you expect both rights and duties and obligations which should be fully known to you.
Rental prices and their increases are subject both to the local rent level and to a number of regulations which, for example, come into force after modernization or increasing operating costs. The "rental brake", which has been in force since 2015, must also be observed. Your real estate partner Engel & Völkers Hamburg Elbe has summarized the most important information about appropriate rental amounts in a brochure, which was developed in cooperation with the law firm and tax consultancy firm Heuking Kühn Lüer Wojtek. It is intended to provide you with an overview of the current legal situation and help you to prevent conflicts between you and your future tenants from the outset in order to ensure safe, quiet and profitable rental conditions.
[Here is a short overview of the content and the download link]
Rent out your residential property with a maximum profit: your guidebook from Engel & Völkers Hamburg Elbe
If you'd like to make profit from your apartment, your house or your apartment in the long term as a real estate owner, the rental of the object is a possibility. However, various framework conditions must be considered in the calculation of the monthly rent. They rest on different pillars: the German tenancy law, the size and the equipment level of the property to be rented as well as their location. This results in important rules for the rental price and the increase in the rent that you should know in order to create a correct and profitable lease for all parties. Apart from a positive financial development, a good relationship between landlord and tenant is essential for the lasting success of your rental project.
Engel & Völkers Hamburg Elbe provides you with a free comprehensive guide via a download, which allows you to find out about the current conditions for rent increases. It explains the tenancy law with its recent developments, such as the "rent brake", which came into force in 2015, which serves to maintain the balance of landlord and tenant rights. It weighs your economic interests as a landlord against the tenant's need for reliable security of one's own living space. Rent increases are therefore only possible within the framework of the applicable law and must be correctly communicated. With our guide, you will receive valuable tips and recommendations for the justified legal increase in rent - but it is not a legally binding document. The following topics are explained in more detail within the guide:
Adapt the rent to local standards
In the run-up to visits and contract negotiations, future tenants inform themselves - especially in times of the Internet - about the usual rental price range within the city or region. An important source that should be familiar with you as a rental owner is the current rent index 2016, which provides an overview of the local rent prices at different locations in Germany. This allows you to determine a basic price per square meter, taking into account the construction and size of your Hamburg property, which can be further increased by factors such as equipment and location. Is your price calculation below the local rent? You may still be able to raise the rental price without sacrificing the attractiveness of the offer. Is there already a rental agreement, and can you justify a rent increase on the basis of the factors mentioned? A larger property income is possible in this case, but you should be aware that rental rates can be increased by a maximum of 15 - 20 percent (depending on the region) within 3 years. In addition, at least 15 months must pass between two rent increases.
Modernization in the house or apartment is the reason for higher rents
If you own a property in Hamburg, which has been modernized with modern equipment or has been modernized recently, higher prices can be requested. Here, arguments such as increased residential quality and extended usage options - for example by means of an elevator - provide the basis for a modernization surcharge, the calculation of which must be transmitted transparently to the tenant. As a landlord, you have the right to modernize your home ownership, so keep the property competitive on the market and increase its attractiveness. According to current tenancy law, your current tenant is encouraged to approve such modernization measures without the need for consent.
Even if the object becomes more energy-efficient by means of technical upgrades and the tenant thus records savings in heat and electricity consumption, for example, the costs of the measure can be transferred to the tenants, provided the resulting energy savings are demonstrable. However, repair and maintenance costs are to be taken care of exclusively by you as a landlord.
Operating costs must be discussed in the contract
There is a tendency for costs in the operation of real estate. These amounts, which are generally paid by way of prepayments or flat rates, such as incidental costs, are, for example, waste disposal, heat, water, cleanliness or the like. If the prices of the respective provider or service provider increase, you can only demand higher additional costs if you are entitled to do so by a clause in the rental agreement. You should therefore consider this when you create the document.
This increase in rent is also subject to a written notification and a comprehensible, transparent calculation of the new contributions, which must comply with an economic principle.
Higher income through scale-style rental increase
Perspectively, a rent increase in the form of a scale system can also make sense. Here the tenancy begins with a comparatively low rental price. At later fixed dates, this is increased by a fixed amount. This type of rent increase entails a high degree of flexibility for the tenant and can be advantageous in different life situations, for example, if the tenant is only able to make certain financial resources available in the foreseeable future. With this type of rental, it is to be noted that all rental prices and the dates of their increase must be stipulated by contract. Percentage increases are also not allowed here, as are the later adjustment to local rents, since the system loses the computability for the tenant.
Quite rare in praxis: the index rent increase
The index rental price calculation is a rather unusual, but nonetheless existent form of the rental price calculation. The basis for it is the consumer price index of the Federal Republic of Germany, which is published annually by the Federal Statistical Office. The index reflects the percentage price development for goods and services within the year of review, which is also used to determine the rental price. In this way, you can adjust the rent to the index scale in the interval of 12 months, i.e. increase it if necessary. It is interesting to note that since 1991 the overall index has been constantly rising. However, you also have to pay a reduction in rent with falling prices.
The following also applies to the index rent adjustment: The notification of the price change must be made in writing on a regular basis; the standard rental rates are not permitted as a basis for rent increase.
Important for the real estate location Hamburg: The legal rent brake
In Hamburg too, the demand for housing has been consistently high for years, a record that has been maintained in all populated regions of Germany. Therefore, on June 1st 2015, the Federal Government granted the states the right to introduce the so-called "rent brake".
The Land of Hamburg has exercised this right, which led to the fact that new properties to be rented cannot exceed 10% price wise than the usual comparison rents. This way, more affordable living space is to be created in cities with a highly frequented housing market - Hamburg is the second largest city in Germany. After five years, the government is investigating whether the "rent brake" is still necessary. Until then, you should pay attention to the price limit set by this regulation when re-renting your home or apartment. Existing tenancy agreements remain unaffected by the rent brake.
Do you have questions about renting? You are more than welcome to contact our experts in renting.
Odette Zimmermann: Real Estate Advisor Hamburg Blankenese, Iserbrook, Nienstedten, Osdorf and Sülldorf
Phone: +49-40-86 60 650
Stephen Naroska: Real Estate Advisor Hamburg HafenCity, Neustadt and Old Town
Phone: +49-40-36 13 13 33
Alexander Kofanov: Real Estate Advisor Hamburg Eimsbüttel, Lokstedt, Stellingen, Schanze and St. Pauli
Phone: +49-40-36 13 13 33