Acquisition costs are the complete costs involved in the purchase of property. These include the purchase price, sales commission, notary fees, legal costs, real property tax (Grundsteuer), and property transfer tax.

An older apartment building, dating from the mid-19th C. through to 1949. Thanks to their mix of class, comfort and quality, they are hugely in demand throughout many cities, particularly those dating from the “Gründerzeit” of c.1870-1920.

Capital refers to the wealth, in the form of money or other assets, owned by a person. When financing the purchase of an apartment, the level of available capital is used to decide the interest rate of the mortgage: the higher the amount of personal capital, the lower the interest rate.

Capital gains is the profit made from the sale of a property (or other investment). This is typically taxed at 25% in Germany, plus solidarity surcharge (see below). However, capital gains tax does not apply if the property has been held for 10 years or more.

The cash multiple is a rate of return, a method of calculating the value of an investment, expressed as a multiple of how much money will be created from the sale of the property, compared to how much money was initially invested.

This is a historical preservation order/historical listing, meaning any property with this status is subject to various requirements in the event of any renovation or conversion work. However, historic buildings are very popular on the rental market.

Essentially, the authorities assume that rental property buildings are wearing out over time and therefore becoming less valuable. As a result, property owners are permitted to take a tax deduction for that presumed decline in the form of a depreciation allowance, at 2% of acquisition costs over a 50-year period. Properties built prior to 1925 are excluded, as are historic buildings.

The down payment is the amount of the final acquisition costs (see above) you will pay in cash for the purchase of the property, with the rest of the purchase being financed by the mortgage.

Known as an Energieausweis in German, it is a convenient way to evaluate the energy requirements and consumption of the property, and helps to estimate the potential costs for heating and hot water.

The difference between the value of an asset and the value of the relevant liabilities. In real estate, it is the difference between the market value of the property and the amount of any mortgage or other loan.

The portion of the total transaction volume (i.e. purchase price + closing costs) that the buyer pays in cash.

A document describing the property, containing site plan, photographs and basic data about the property.

Financial Consultants analyse the total asset and tax situation of their clients. On this basis, they draw up detailed financial planning, asset structure analysis, evaluate existing investments and develop concrete investment and implementation proposals. At Ziegert Everestate, we have a competent financial team to help you with any advice you may require.

This is a loan that is repaid in regular payments over a set period of time, usually between one and ten years, though it may last as long as 30 years in some cases. These generally come at a lower interest rate, and have predictable payment schedules.

A drawing to scale, showing a view from above, of the sizes, shapes and relationships between rooms and spaces in a property.

Also known as Wohngeld, this is a payment relating to the operating, maintenance and administrative costs of the community property, generally on a monthly or annual basis. This could, for example, cover the ongoing costs of caretaker, interior and garden maintenance, domestic electricity, telecommunications equipment (eg cable connection), heating, waste management, community property management, building insurance, bank account maintenance and community ownership maintenance.

Property management, responsible for organisational measures and repairs within the building.

The term for a raised ground floor.

A private association, formed by the owners of the various properties in an apartment building, which meets annually to decide on the administrative concerns of the building, such as maintenance and repair, house rules, rules of use or decisions about structural changes. In addition, the annual shared housing business plan will be prepared, showing all the expected costs for the following year.

The annual rent as a percentage of the purchase price of the property. It is a simple indicator of a portion of the return on your investment.

Your operating balance is the sum of money left over, once all rental income and expenses have been accounted for.

Mortgage interest rates in Germany are amongst the lowest in the world, with current average rates around 2% p.a.

Kiez is a German word that refers to a city neighbourhood, generally a smaller part of an official district. It is particularly associated with Berlin, which has a number of distinct Kiez-es, and Berliners are often very proud of their Kiez, identifying with the area, its character and its residents.

A public register in which land ownership is recorded. Ownership of property is only officially recognised once it is entered into the land registry.

Liquidity refers to the ease with which an asset can be converted into cash, without affecting its value. Real estate is usually considered a relatively illiquid because it requires more capital to buy than other investment assets, and can take weeks or months to sell. However, property that is easy to sell and purchased at market value is liquid, and Berlin enjoys a high market turnover, making it a highly liquid market, with plenty of opportunities for investors.

This is a financial reserve kept aside for necessary repairs or modernisations, payable by the owner every month.

An apartment which is spread over more than one floor, typically with its own internal staircase. Also known as a duplex.

The German term for “rental cap”, this is legislation aimed at preventing rents from increasing too much. In Berlin, rents can only be increased by 4.7% annually, or 15% over a three-year period. Leipzig has similar legislation also capping rent increases in current contracts to a maximum of 15% within three years.

The German term for “rental index”, this is an index of the rents actually paid by tenants, broken down into size, age and location. The rental index shows, on the basis of the net rent without bills, the local comparative rent in Euro/sqm/month. Legislation introduced to slow rental increases states that rents cannot exceed 10% of the local average rent for a current or new tenant, according to this rental index.

This is a “social preservation statute”, aimed at protecting the character and social makeup of a neighbourhood. Certain areas throughout cities such as Berlin, Hamburg, Frankfurt and Munich, mostly within inner-city areas, are designated Milieuschutz zones, which means that property owners need to seek approval from the local authorities for any modernisation and other changes to the property.

Literally translated as “new-build”, this refers to any apartment building that dates from after 1949.

These are costs relating to administration of the apartment and building, which cannot be passed on to tenant. They include administration fees, maintenance retainer, one-off repair costs etc.

A person licensed by the government to perform acts in legal affairs, in particular witnessing signatures on documents. When purchasing property in Germany, the purchase contract must be certified by a notary, the fees for which are typically around 2% of the purchase price.

By signing a Power of Attorney authorisation (POA) relating to the purchase of the property, a solicitor can act as your representative in all legal matters and as authorised recipient, meaning you do not have to travel to Germany for the duration of the purchase process.

With the most common types of property loan in Germany, you can set the amount of the principal you want to pay back with your monthly payments.

The full price of the apartment, excluding transaction costs.

This is the net rent that the tenants of the apartment pay at the time of purchase, excluding utility costs.

Our specially-developed return calculator helps you to determine whether an investment makes sounds financial sense, and to calculate how much money you can expect to make.

Essentially, the amount of money you will receive from an investment, shown as a percentage of the amount of cash (equity) you paid in the initial purchase.

Real estate agents commission in most cities in Germany is typically 5-7% of the purchase price. However, Ziegert Everestate has many properties which do not charge a sales commission.

This is the German term for a credit check, usually required for renting and purchasing property.

This is an apartment comprising one room with a kitchenette, and a separate bathroom.

This is a German term which can be loosely translated as “Conversion Prohibition Order”. It is a directive from the state of Berlin prohibiting the private purchase of entire apartment buildings and converting them into single units within the boundaries of Milieuschutz (social preservation) areas.