Price-to-Rent Ratio Calculator Germany
Price-to-rent ratio of a German investment property from price and net cold rent, with gross yield, annual rent and a cheap-to-very-expensive rating.
Purchase Price Factor
24.3
Moderate
Gross Rental Yield
4.11 %
Annual Net Cold Rent
€14,400.00
Price-to-rent rating (rule of thumb)
The purchase price factor shows how many annual net cold rents the purchase price equals; the gross rental yield is its inverse (100 / factor). The scale is a rough rule of thumb, not an official rating: in major cities factors of 25 to over 35 are common, in rural areas often below 20. Purchase costs and non-recoverable costs are not included (net yield: see FAQ).
Note: These calculations are for informational purposes only and do not replace professional tax or financial advice. All information without guarantee.
FAQ
Frequently Asked Questions
What is the purchase price factor?
The purchase price factor (Vervielfaeltiger) is the ratio of the purchase price to the annual net rent. A factor of 20 means you pay 20 times the annual rent. Lower factors indicate better investment value.
What is a good purchase price factor?
Factors below 20 are considered favorable, 20-25 is moderate, and above 25 is expensive. In popular cities, factors of 30-40 are common, while rural areas may offer 10-15.
What is the difference between gross and net rental yield?
The calculator shows the gross rental yield: annual net cold rent divided by the purchase price, i.e. 100 / purchase price factor. With the defaults, that is 14,400 euros / 350,000 euros = 4.11% at a factor of 24.3. For the net rental yield, add the ancillary purchase costs to the purchase price and deduct non-recoverable costs such as maintenance, management and rent loss from the rent. With 10% ancillary costs and 2,000 euros of such costs per year, the result is (14,400 − 2,000 euros) / 385,000 euros = 3.22%.
Guide
What is the Price-to-Rent Ratio Calculator Germany?
The price-to-rent ratio calculator computes the ratio of purchase price to annual cold rent and evaluates the viability of a property investment.
How does the Price-to-Rent Ratio Calculator Germany work?
Enter the purchase price and the monthly net cold rent. Price-to-rent ratio = purchase price / annual net cold rent (monthly rent × 12). A low ratio indicates a favourable investment. The calculator also shows the gross rental yield (100 / ratio) and rates the ratio against rule-of-thumb bands.
Key Data and Facts
Rule of thumb (not an official rating): ratio below 20 favourable (gross yield above 5%), 20-25 moderate, 25-30 expensive, 30 and above very expensive (below 3.3%). Gross rental yield = annual cold rent / purchase price * 100. In major cities 2026: ratio often 25-40, in rural areas often below 20.
Step-by-Step Guide
How to calculate the purchase price factor step by step: 1. Enter the purchase price: The asking price or the actual purchase price of the property. 2. Calculate the annual net cold rent: Monthly net cold rent x 12. For owner-occupation: Estimate the market-standard rent for a comparable apartment. 3. Calculate the purchase price factor: Purchase price / annual net cold rent. Example: 300,000 EUR / 12,000 EUR = 25. 4. Assessment: Factor below 20: favourable investment, high yield. Factor 20-25: moderate valuation. Factor 25-30: rather expensive, an increase in value must deliver the return. Factor above 30: very expensive, only worthwhile if strong appreciation is expected. 5. Gross rental yield: 100 / purchase price factor. At a factor of 25: 4 % gross rental yield. 6. Note the net rental yield: Deductions for maintenance (1 %), vacancy (2-3 %), management and non-apportionable costs reduce the yield by approx. 1.5-2 percentage points.
Calculation Example
Freehold flat, purchase price 280,000 EUR, net rent excluding utilities 850 EUR/month. Annual rental income: 10,200 EUR. Price-to-rent factor: 280,000 / 10,200 = 27.5 (expensive, 25-30). Gross rental yield: 3.6%.
Sources
Official sources
Calculations are based on applicable German laws and official data:
- Bürgerliches Gesetzbuch (BGB)
- Rechtsanwaltsvergütungsgesetz (RVG)
- Bundesministerium der Finanzen (BMF)
Full methodology at Methodology.
Reviewed by Konstantin Iakovlev · Last updated:
Real Estate
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