Buy an apartment on credit and rent it out

That a non-paying messy tenant would be a worst-case scenario is of course true. But I am usually risk-tolerant, and if you show some people skills during the apartment viewing and ask to see a Schufa extract and a letter from the last landlord, you can at least reduce the likelihood of a catastrophic tenant.

I have now calculated everything and wanted to ask you to take a look. Am I assuming realistic data? Have I left out anything important (other than maintenance expenses and special assessments)? Does anything seem strange to you here?

Fictitious apartment, purchase price incl. fees and taxes €50,000, loan amount €50,000. Check24 real estate loan calculator says: full repayment with a fixed interest rate of effective 3% in 15 years possible (initial repayment 5.5%), resulting in a monthly rate of €350.

I am calculating based on the purchase price (fictitious data): rent €320, ancillary costs (chargeable) = €80, ancillary costs (non-chargeable) = €70 ---> net rent €250.

I have to tax rent and all ancillary costs at almost 40% according to WISO, which is about €155 / month.

I can deduct 40% of the chargeable ancillary costs as well as the management fees, which is about €30 / month.

I can deduct the interest expenses of €1,500 in the first year, resulting in about €44 per month back.

Thus, according to my calculation, per month:

€250 net cold rent - €350 bank installment - €70 ancillary costs (non-chargeable) - €155 taxes (on rent and total ancillary costs) + €30 tax reduction (due to ancillary costs) + €44 tax reduction (due to interest) = - €251.

So I would have to add €251 every month. That wouldn't be worthwhile for me. But what do you say about my calculation? Thanks in advance!

I say that the result was clear from the first contribution.

What about reserves? It will be an apartment in a multi-unit building, right?

In general, it can be said that renting out individual apartments is usually not worthwhile and results in a loss. Several people have already brought themselves into private bankruptcy doing so.

You have several calculation errors; if you consider the gross rent when calculating the income, then you must also consider the complete ancillary costs as expenses, and the depreciation is missing for the tax calculation.

You have to separate the calculation of the tax from the calculation of liquidity:
For the tax, calculate the following (all annual values):

Gross rent = 12 x €400
- Ancillary costs complete = 12 x €150
- 80% x acquisition costs x 2% depreciation (if the property is not older than 1923) €800
- Administration costs 12 x €30???
- Interest €1500
- Average maintenance expenses of the apartment e.g. €300
= Profit/loss from renting = €40
x tax rate 30%
= Income tax €12

I suspect that the tax rate of 40% is somewhat exaggerated. Rather calculate with 30%.

For the liquidity, calculate the following:
Gross rent 12 x €400
- Ancillary costs 12 x €150
- Loan installment 12 x €350
- Administration costs 12 x €30
- Personal reserve/maintenance expenses €300
- Tax €12
= Surplus/shortfall -€1872

Presumably, there will still be a shortfall.
However, if the shortfall (€1872) < repayment (350*12 - 1500 interest = €2700), there is still an asset buildup.

However, if the shortfall (1872€) < repayment (350*12-1500 interest=2700€), there is still an asset buildup.

A small addition to that:

The prerequisite is that the property does not lose value. Otherwise, the depreciation would have to be taken into account.