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RENTING

EXPLAINED: The hidden costs of renting in Germany

From kitchens to skirting boards and even front door name signs - renting a flat in Germany can involve a lot of hidden costs.

A set of keys placed on a rental contract in Germany.
A set of keys placed on a rental contract in Germany. Photo: picture alliance / dpa | DB Dieter Assmann

Signing a rental contract is a dream come true for many foreigners in Germany given the tense housing situation in cities. 

But many people might not be aware of the extra costs that come with renting. Here’s a look at what you can expect. 

How exactly does rent work in Germany?

The first thing to be aware of is that in Germany you’ll see a ‘cold’ and ‘warm’ rent on your contract. Kaltmiete is the rent for the property itself, and the Warmmiete is the cold rent plus the Nebenkosten – the associated or ancillary costs. 

These costs can include things like property tax, hot water, cleaning and electricity in common areas,  garden maintenance, parking, lifts and stairwell maintenance, cable TV/connection costs, water, sewage and caretaker fees. 

On some flats, the Nebenkosten includes heating costs, however some tenants have to pay their heating fees separately with a utilities company. This will be specified in your contract. 

The side costs do not usually include things like broadband, electricity and TV tax so you’ll have to factor these things into your budget. Sometimes the cable connection will be listed as a separate cost aside from the Nebenkosten

READ ALSO: Six confusing things about renting a flat in Germany

A real estate agent shows people round a flat in Munich.

A real estate agent shows people round a flat in Munich. Photo: picture alliance/dpa | Tobias Hase

A notable exception of this is if you are subletting from a Hauptmieter (main tenant) or it’s a student flat – in this case all extra costs are usually bundled in with the final rent amount that you pay monthly. 

Forking out for a kitchen

One surprise that foreigners often get when renting in Germany is that the kitchen might not be included in the apartment. That means you’ll have to buy a new kitchen when you move in or you can arrange to purchase it from the tenant moving out. 

If the kitchen is included, the letters EBK (standing for Einbauküche) are usually in the ad for the flat. Sometimes a flat will be advertised as having a stove and sink – and that is literally all that will be in the kitchen room. It means you’ll have to shell out for some countertops and cupboards or shelves which can end up costing hundreds or even thousands of euros. 

Germany is known for having strong tenants’ rights making it very difficult for landlords to turf people out of their homes. Plus traditionally low rents mean people tend to stay in apartments for a long time, meaning investing in a kitchen might not be a bad idea. 

However, because rents have been rising so rapidly in Germany, and landlords are deemed to have the upper hand at the moment after the constitutional court threw out Berlin’s rent freeze law in 2021, this tradition can now be a burden on tenants, especially those entering into new higher rate contracts. 

Structural changes

Tenants might also have to take on the costs of some other structural changes made by the previous tenant, such as flooring, which can again cost hundreds or thousands of euros. Skirting boards could also be added on to your bill. Agreements on taking over costs are signed by the previous tenant (Vormieter) and the new tenant (Nachmieter) and placed on file. 

Light fittings

When you enter your new German apartment you will probably see a bunch of electrical wires on the roof. That’s where you are meant to install light fittings. If you are unsure how to do this then call an electrician before fiddling with wires yourself. 

Appliances

Furthermore, appliances are usually not included in new flats in Germany so you’ll have to pay for things like washing machines, fridges and freezers.

Deposit

Another cost that you have to budget for is the Kaution or deposit. This usually amounts to two or three months of the ‘cold rent’. So if your Kaltmiete is €500 then your deposit will be up to €1,500. The landlord or property caretaker cannot ask for more than three months rent on a residential property.

This payment is meant to act as the landlord’s insurance against lost rent or damage to the property. It is a deposit so you should get it back unless the landlord claims you’ve damaged the flat after you move out. 

You can also pay this in three instalments. Some landlords or housing providers will put pressure on you to transfer the whole deposit over in one. You can do this if you want to do but it is the tenant’s right to pay in three monthly instalments

READ ALSO: How much deposit do I have to pay when renting in Germany

What else might I have to pay?

Some landlords or property management firms will charge you a fee for your name to be added to the doorbell of your apartment (the Namenschilder). Yes, even if it’s a case of sliding a piece of paper with your name on it onto your flat buzzer.

This can cost anywhere between €10 and €50 (or even more if they are chancers). 

Photo: picture alliance / dpa | Jens Kalaene

However, the law around this is dubious. According to a case reported on by Welt newspaper in 2012, landlords or property management firms cannot pass on all costs to their tenants. 

For example, expenses for new nameplates (or pipe cleaning in this case) are not automatically operating costs, the Augsburg District Court ruled. Only current expenses are considered operating costs.

In that case, the landlord had listed expenses for new nameplates and the removal of a pipe blockage in the operating costs statement. The tenants refused to reimburse the amount, and the flat owner sued.

The judges ruled that the costs for the nameplates were not operating costs. The replacement of the signs was linked to the new tenancy and therefore not part of the running costs. The pipe cleaning was not part of the operating because it was a repair and the landlord had to pay for this.

READ ALSO: How real estate in Germany has rocketed in the pandemic

Is there any way around these costs?

Not really. When it comes to furnishing your flat, you could try and buy items like appliances – or the whole kitchen – from the previous tenant and get a slight discount. You can also pick up second hand items from places like Ebay Kleinanzeigen.

Another option is to pick a furnished apartment. These are usually advertised in new build flats which means the rent will probably be higher than in an Altbau (old-style building). 

Do I get to see what the operating costs are for?

Yes, you should. You pay the costs in fixed monthly amounts and under German law the landlord or housing firm is obliged to settle the service charges annually. 

The statement of operating costs (Betriebskostenabrechnung) must show things like details of the total costs, how costs are distributed among tenants and calculation of the tenant’s share.

What can I do if I’m worried about being charged too much?

Since you want to try and stay on good terms with your landlord or property management, you could ask them for clarification on costs before making any demands. 

Alternatively you can seek some advice from a tenants’ association (Mieterverein) who can provide you with advice and let you know if something isn’t right and should be challenged. There are some costs involved with joining a tenants’ association, though so bear that in mind.

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RENTING

How people in Germany are struggling with rent hikes

Germany's extremely high inflation rates are causing headaches for tenants whose monthly rent is linked to the Consumer Price Index (CPI).

How people in Germany are struggling with rent hikes

Inflation in Germany recently hit a 40 year high at 7.4 percent – and experts warn it will increase further. 

Along with soaring energy prices, many everyday grocery staples, like milk and bread, have gone up in price significantly. 

But some tenants in Germany face another hurdle – rents that are linked to inflation. 

Some landlords or property companies include clauses in contracts for the cost of rent to go up. They can include a Staffelmiete (stepped rent) which means the rent increases gradually over time (but there are limits).

An Indexmiete (index rent) clause in rental contracts means the rent is based on the Consumer Price Index set by the Federal Statistical Office (Statistisches Bundesamt) and may be increased in line with the cost of living in Germany. The rent increase can happen once per year.

READ ALSO: Why tenants in Germany could see bigger rent increases this year

Given the strong competition for housing in many of Germany’s cities, such as Munich and Berlin, tenants often sign contracts despite the rent hike clauses. 

But nobody could have predicted how bad inflation would get this year. Energy prices in particular have rocketed since Russia’s brutal invasion of Ukraine which started on February 24th.

Now some tenants’ associations in Germany are demanding that Index-linked rents be capped. 

The need for advice on index-linked leases is increasing, Anja Franz, lawyer and spokeswoman for the Munich Tenants’ Association, told regional broadcaster BR24.

In the past years – when inflation was very low – rents like this only ever rose by one to two percent, and tenants had very few problems with this. At the moment, however, tenants are facing increases of 7 to 10 percent on their monthly rent.

Adding to the problem is that landlords who have not increased the Indexmiete in the past years can add the inflation rates from that time on top of current hikes – creating huge increases. 

However, landlords can also choose to wait to increase the rent, and only refer to the index figures published by the Federal Statistical Office next year or the year after.

READ ALSO: Altbau vs Neubau: What’s the difference and which should I rent in Germany?

What’s happening in Bavaria?

Bavaria is known for having some of the most expensive rents in Germany.

In many Bavarian cities and districts, landlords are likely to use the options available to them to increase rents, according to Rudolf Stürzer, chairman of the Haus und Grundbesitzerverein (House and Landowners Association) München. That’s because up until now index rents haven’t been lucrative for landlords. In the last 10 to 15 years, the index rose much slower than the market rent. Now that’s changed.

The Mieterverein München (Munich Tenants’ Association) advises those affected to first check whether the calculation is correct when they receive notice of a rent increase from their landlord or housing company.

Furthermore, tenants should check the time interval since the last rent increase. A waiting period of at least one year from the previous rent increase applies.

A man hangs up his keys in a Berlin apartment

A man hangs up his keys in a Berlin apartment. Photo: picture alliance/dpa/dpa-Zentralbild | Kira Hofmann

In principle, tenants who have signed an index-linked rent are bound by this clause. If the landlord demands an effective rent hike, it must be paid.

The Munich Tenants’ Association estimates that three to five percent of its members have index-linked tenancy agreements. In the past, the association even advised that people to sign these contracts – but now they advise against it.

The Haus und Grundbesitzerverein believes that index-linked rents have already been agreed for two-thirds of all new contracts in Munich.

The tenants’ association says index-lined agreements become a bigger problem when the initial rent set is already high. 

They are calling for specific legal upper limits for index-linked rents to be set in Germany to avoid overburdening tenants.

Under standard tenancy agreements rents can rise by no more than 20 percent over three years. In Frankfurt am Main and other places were the rental market is competitive, this cap has been reduced to 15 percent.

The traffic-light coalition wants to reduce this further to 11 percent nationwide, which would mean an increase of less than four percent per year.

The German Tenants’ Association (DMB) also recently slammed the fact there are no cap limits for index-linked rents.

Lukas Siebenkotten, President of the German Tenants’ Association (DMB), told DPA in April that a regulation like this for index-linked tenancy agreements “would be a sensible remedy” to protect renters in Germany. 

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