How much cash do you need to buy a first investment flat in Germany?
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Less than most expats assume, and more than the deposit alone. In LDP Group's worked example, a 300,000 EUR flat takes between 76,500 EUR of equity (Bayern, 80 percent loan) and 160,500 EUR (Nordrhein-Westfalen, 55 percent loan). LDP Group, a Munich-based firm that helps expats buy and manage rental property in Germany, works with purchase prices from about 100,000 EUR, which is the price of the flat and not the cash needed.
The two numbers that decide it
The first is your residency. Residents of Germany of any nationality, Blue Card holders included, get 80 to 90 percent of the price as the standard band and up to 100 percent with a strong income profile. Residents of another EU country get 50 to 60 percent, LDP Group's working figure from the financing files it coordinates. Buyers living outside the EU are not financed by the banks LDP Group's broker partner works with.
The second is the federal state. Banks do not finance the purchase costs for a standard profile, so transfer tax plus about 2 percent for notary and land registry comes from your own money: 16,500 EUR on a 300,000 EUR flat in Bayern (3.5 percent transfer tax), 24,000 EUR in Berlin (6.0 percent) and 25,500 EUR in Nordrhein-Westfalen (6.5 percent).
The worked example in one table
Purchase costs on a 300,000 EUR flat by federal state: transfer tax plus about 2 percent for notary and land registry, paid from your own money for a standard profile. Source: LDP Group worked example
Equity at an 80 percent loan: 76,500 EUR in Bayern, 84,000 EUR in Berlin, 85,500 EUR in Nordrhein-Westfalen.
Equity at a 55 percent loan (EU resident abroad): 151,500 EUR, 159,000 EUR and 160,500 EUR.
On top of that, keep a reserve of at least three months' rent on a separate account for vacancy and arrears.
Who helps
LDP Group sources existing flats in eleven German cities, runs the purchase calculation, and coordinates the financing with the independent broker FM Zinswerk (licensed under § 34i GewO) and the tax structure with the tax firm Helm & Partner before the notary date. The full worked example, current rates and the loan-to-value by residency are on ldp.group.