Here’s what you need to know when buying a property in Germany

If you’ve lived in Germany for a few years, and come to love the place, it’s only natural that you would eventually want to purchase a property to call home. The good news is, it’s an attainable goal for expats - although there can be obstacles.

Here's what you need to know when buying a property in Germany

Together with mortgage advisor, Hypofriend, we outline the steps you’ll need to follow to buy your German property, and how their powerful tech platform and English-language advice service, can make the experience a much easier process.

Recognizing that purchasing property is one of the biggest decisions we make in our lives, Hypofriend was created to give expat borrowers peace of mind as they begin their journey to home ownership.

Ready to begin your journey to home ownership in Germany? See what you can afford with Hypofriend.

Step one – Determine your budget

Before you start looking for your dream apartment, you should find out how much you can actually afford and how much money the bank would lend you for a purchase. To do this, you can use the Hypofriend Affordability Calculator. This will give you an initial estimate of what the bank is willing to lend you given your financial and personal situation.

One benefit of using Hypofriend is that once your borrowing potential has been assessed by the mortgage calculator and you have uploaded the relevant documents, you can receive a free financing certificate, which can be invaluable in putting you at the front of the queue when it comes to securing your dream home.

Be aware that there may be problems if your employment status or residency status is unusual or temporary. If this is the case, you should already be talking to an independent mortgage advisor like Hypofriend..

Step two – Start looking 

After you know how much you can afford, you can start finding your dream property. It can be difficult, but it can also be a lot of fun! Either way, it pays to search thoroughly, as the German market is far from transparent.

One way of circumventing this problem is through working with the locals, whether they be friends or acquaintances. Germans can be quite motivated to discuss property prices and finding the right place to live, and there’s often a lot of pride associated with doing so. Property is a serious business, and people will generally treat your inquiries seriously and give honest answers. Don’t be afraid to ask questions about what it’s like to live in a certain area – you’ll be surprised how candid the answers can be.

Word of mouth is also a powerful thing in Germany. You’ll also be surprised how many people know of a flat or home going to the market, and who would only be too happy to put you in touch with the seller, or their makler.

Of course, it is also worth registering on the well-known real estate websites and setting up an alert that will notify you when a property of interest to you comes on the market. Having registered with Hypofriend can also support you at this stage – with their Property Radar you will receive an update once a week with listings that are in your price range.

Once you’ve found a property you love and definitely want to buy, you will have to reserve it with the makler. Here’s where the paperwork begins, and it is now time to secure your mortgage. 

Step three – Convince the bank

Securing a mortgage in Germany, with foreign laws, systems and language can seem impenetrable. The temptation is to sign at the first sign of a deal, but this can lead to you being ripped off, either by unscrupulous lenders, or banks not having a full understanding of your situation.

If you can ‘bring a friend’, a more experienced borrower to watch over the process, this can avoid many pitfalls. If your workplace has individuals earmarked for such a purpose, it’s a very, very good idea to get them onboard. Whatever you do, always organize to have some ‘breathing room’ at each stage in the process before you sign anything, or proceed.

Luckily, in Germany, a lot of the convincing can be done through paperwork. Yes, you’ll be asked to provide mountains of documentation, such as financial statements, work contracts and and yes, this can be a struggle. You will be asked to provide residency permits, and sometimes banks may refuse to recognize them for one reason or another.

As infuriating as this can be, it pays to remember that patience is a virtue. If something isn’t recognized, or more documentation is required, take note of what exactly is needed and send it in. It may take time, but the banks need to do their due diligence. Remember, a paper trail is valuable for both parties.

Registering with a Hypofriend mortgage advisor can do much to smooth the way, with video and phone meetings to walk you step by step through the process, ensuring that you supply what is needed, when it is needed, and that the best mortgage for you is approved. 

Once your mortgage is approved, this isn’t the end of the process. There remains a lot of steps involving the transfer of funds and the payment of various fees before you can access your new home. Again, working with Hypofriend through this process will ensure that you don’t fall prey to any hidden costs or delays. 

A safer way to secure a mortgage

A mortgage calculator and advisory service, Hypofriend works with potential property owners to work out exactly what they can afford, and the best mortgage for their situation. This is achieved by using a powerful recommendation engine, and algorithm-powered mortgage experts to match borrowers with lenders. Combined with this powerful tech, Hypofriend utilises video chats with online mortgage advisors to assess your needs and find the best lender.

Best of all, Hypofriend is a free service to prospective home buyers, working with more than 750 German lenders to help more people into home ownership. At no point will you be charged for the advice you receive – and that’s an important consideration when borrowing a substantial sum of money!

Have you decided to make your home in Germany? Would you like to know what you can afford? Save time and worry and learn more about Hypofriend today.

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EXPLAINED: How to sublet your apartment in Germany

If you’re going away for a period of time or want to cut your living costs, subletting your flat can seem like an appealing option. But there are a lot of things you need to consider first. We break them down.

EXPLAINED: How to sublet your apartment in Germany

What is subletting?

A subletting arrangement is when a subtenant is allowed to use the main tenant’s apartment, or part of it, in return for payment.

Having visitors in your home, even for a period of up to six weeks, does not count as subletting and you do not have to inform your landlord. But be careful: If the visitor starts paying rent, this becomes a sub-letting arrangement and if the visitor stays more than six weeks in a row, you have a duty to inform your landlord.

READ ALSO: The most expensive (and cheapest) cities in Germany to rent a room

If close family members such as parents, children, partners or spouses move in with you, this is also not a subletting arrangement and is considered part of the normal use of the rented property. 

However, you should inform your landlord of such a change in circumstance, not least because at some point the new person living in your apartment will at some point need to register with the local authorities.

Do I have to tell my landlord?

Yes. Regardless of whether you are just subletting a room or your whole apartment, you have to inform your landlord and, in most cases, you are required by law to obtain the landlord’s permission to sub-rent. This applies for whatever time period you want to sublet for: whether it’s for a weekend or for six months. 

One exception to this rule is if you rent a room in a WG (shared accommodation) and all of the tenants are equal parties to the contract. In that case, it’s possible to sublet individual rooms without having to get permission from the landlord, but you should still inform them.

If you try to rent out your place or a room without your landlord’s permission and get found out, you could face legal action, or be kicked out of your apartment before the agreed notice period. 

READ ALSO: REVEALED: The most – and least – popular landlords in Germany

Can the landlord refuse to let me sublet?

If the main tenant has a so-called “justified interest” in subletting part of the apartment, they can demand that the landlord agrees to the sublet and even take legal action or acquire a special right of termination of the rental contract if they refuse.

However, this right only applies to a sublet of part of the apartment and not the entire space within the four walls – in this case the landlord is within their rights to say no to the sublet. 

When subletting part of an apartment, a justified interest must be for an important reason such as a needing to move abroad temporarily for a job or personal reasons, or a partner moving out and the tenant no longer being able to cover the rental costs alone.

In general, landlords shouldn’t refuse your request to sublet unless there are good reasons – for example if the apartment is too small. 

The landlord can’t reject your subletting application without good reason and if they do, you can gain a special right to terminate your rental contract, and can even sue for your right to sublet. 

What information will I need to give my landlord? 

Whether you are subletting a room or the whole apartment – you’ll need to give your landlord the following information:

  • Who is moving in
  • How long you will be subletting for
  • For what reason you plan to sublet

If you want to set up a WG (Wohngemeinschaft or shared flat) as the main tenant, you should discuss this with the landlord beforehand, as it may be worth changing the apartment status to a shared apartment in the main rental agreement. That way, you won’t have to send a new application every time a new roommate moves in.

Do I need a special rental contract?

If you are going to subrent your apartment, it is definitely worth having a contract. 

A contract between the main tenant and the subtenant is completely separate from the contract between the main tenant and the landlord, so all responsibilities arising from the sub-rental contract will fall on you and not the landlord. 

A man fills in the details of a rental contract by hand. Photo: picture alliance / dpa | Armin Weigel

At the same time, as the main tenant, you will still be liable to your landlord for any damage caused by the subtenant, so it is best to put a clause in the sub-rental agreement that outlines how this will be covered, and also to make sure that your subtenant has personal liability insurance. 

There are plenty of websites that offer templates of sub-rental contracts for you to use, and you should make sure your contract includes the following information:

  • The personal details of the subtenant
  • The sub-rental cost and any service charges
  • When these are to be paid
  • Which rooms may be used
  • How many keys have been handed over
  • Details of a possible deposit
  • The condition of the rented apartment
  • House rules, such as no smoking, pets, etc.
  • Liability for possible damages

How much can I charge?

You can usually negotiate the sub-rental price yourself, but you should be careful not to overstep the rental limit per square metre for your area. If you charge over this amount and your subtenant finds out, they have the right to demand the local square metre rental price and you may have to refund them the total amount of overcharged rent.

If you sublet a furnished apartment, you can add a surcharge based on what you will be leaving in your apartment. You should also factor in the energy and water costs.

READ ALSO: Everything you should know about renting a furnished flat in Germany

Do I have to get consent from the local authorities?

In some cases, you will also need to get permission to sub-rent from the local authorities to rent out your place. 

If you sublet in Berlin or Frankfurt, for example, and you want to advertise your flat for holiday rentals, you have to get approval first.

A wooden judge’s hammer lies on the judge’s bench in the jury courtroom in the Karlsruhe Regional Court. Photo: picture alliance / Uli Deck/dpa | Uli Deck

If you go ahead and rent on a site like Air BnB without approval, you can expect to pay a hefty fine. Though the highest possible fine of €500,000 is unlikely, there are numerous reports of people getting fines in Germany of several thousand euros.

Another important thing to remember is that, if you make more than €520 profit in a year from sub-renting, you have to include this in your tax declaration.

Can the landlord demand I pay extra?

If a landlord allows subletting, they can also demand a share of the extra income from the main tenant. The amount of the surcharge cannot exceed 25 percent of the sublease, however.

Useful Vocabulary

to sub-let – Untermieten 

sublease agreement – (der) Untermietvertrag

termination without notice – (die) fristlose Kündigung

ban on misuse – (das) Zweckentfremdungsverbot

special right of termination – (das) Sonderkündigungsrecht

justified interest – (das) berechtigtes Interesse

personal liability insurance – (die) Haftpflichtversicherung

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.