Finding a rental in Germany

Dreamtime: It is often part of the deal that a tenant renovates a flat on moving in. Most German cities are a landlord's market, so you have to offer something above the others to get the flat!

Dreamtime, you hit on a good point. My following comments are getting away from the general topic of cost of living but because accommodation is the biggest expense, I think it is worth going into a bit deeper. It is hard to put a cost on accommodation when one can hardly find it and thus maybe be forced to take something more expensive than they can really afford just to have a roof over their head.

Very often an apartment in Germany has nothing in the kitchen - just a bare room and one is expected to build in your own kitchen. And then people take it with them when they move out. This is a lot of effort if people might only be staying a year or so. Other times, a kitchen is already there but basically belongs to the last renter and you have to buy it from them and hope to resell it to the renter that follows you. I see the sense in taking nice appliances but the whole cabinet work, counters and sink goes as well and the chance it will fit into the next apartment is totally random.

Property cost a lot in Germany and people live more compactly in apartments or multiple family dwellings. Small towns have more possibilities but many houses are old, badly cut and not so well made. So for Americans thinking they will find a nice, free standing house with garden in a nice setting… - don't count on it!

Another popular thing in Germany is shared accommodation. Many students or young workers (not so much families) will share a place, having their own room and usually a common kitchen, bathroom and often living room and possibly washing machine, internet, balcony or garden. Communal living is definitely not for everyone but often it is a matter of finding the right Wohngemeinschaft or WG as they are known in German. There can be plenty of ones with younger partiers who like loud music but also ones with people well into their 30's. Some might stress for or against the options of smokers, vegetarianism, house pets or kids, mixed or segregated by gender etc. This is usually by far the most likely possibility for an arriving foreigner. One finds notices on the pin-boards at Universities, community centers, newspapers or selected websites. A small to medium room in a student WG in Stuttgart usually runs 300 to 400 Euros/month including utilities.

I couldn't find a good place to rent in Stuttgart and ended up buying an apartment. Prices aren't cheap and one really needs to look around but interest rates are also historically low at the moment. And despite high prices, property is generally a good investment in Germany. The factors that produced the speculative property bubble that popped in the States a few years back are not such a risk. Mortgages are usually 10 or possibly 15 years and unless one has a lot of other assets or a steady well-paying job, the banks are probably not going to lend a high percentage of the cost. Thus a little money down with a 30 year mortgage like traditionally done in the USA is unheard of. Most mortgages beyond 10 years are probably going to have a flexible rate which has the risk one's payments can later skyrocket unless one has the option and cash to then buy the mortgage back.

Buying an apartment is maybe comparable to a condo in the States. One owns the apartment but also collectively owns the building. There are then responsibilities, costs and possible conflicts about repairs and maintenance etc. and if one or more of the other owners is belligerent then it is complicated.

There is a way to actually get property at a big discount in Germany. There are court imposed auctions of property due to bankruptcy – with sealed bidding - that get announced in the newspaper. These are often targeted by property investors who might bid 50 to 70% of the normal market value who would then resell them at 80 to 90%. The heart of the strategy is to turn things over quickly. An individual might over bid them at 70 – 75% getting a great deal. But one needs to know the market; exactly what they are looking for, what area might come in question and make a quick decision to bid. One also needs to know they can come up with the money quickly. Investors often have a pre-arranged line of credit paying much higher short term rates than for a mortgage but it doesn't matter if they resell in a matter of months. If an individual cannot get a mortgage settled quickly enough (unlikely), then they might have the option to take another form of shorter term, higher interest credit which they can possible renegotiate or follow up with a normal mortgage.  I don't think a foreigner can just arrive and manage to cope with pulling off such a strategy but if one finds another place to live until they do so, it can be a great long term investment.

The foreclosure auctions are definitely a good way to buy property in Germany. The supply is not huge but as time goes on it will get better and better. At least there is some choice. When the banks get the property back they list it and it's not so cheap at that point.

I also want to add that real estate agents in Germany are absolutely useless. They offer nothing except showing you what is listed and that's it. No creative activity at all. No ability to wheel and deal. No ability to negotiate. No ability to do anything except this is the listing and here is the price. Absolutely pathetic.

I really was astounded at the inability of these agents to do basic stuff. They don't answer emails. They usually don't answer phone calls and they usually never get back to you. It's hard to believe they are capable of making money to pay the rent. It was so bad that at some point I decided to never contact an agent. It's like talking to a wall. You can talk all you want to the wall but nothing ever comes back.

Hello dreamtime,

I created a new thread with your posts on the Germany forum for a better interaction.

Shaazia
Expat.com Team

Buying property is not an alternative to renting for most foreigners in Germany, since it requires sufficient financial resources and a long-term commitment to the place. A general rule is: If you do not have at least 30% of the buying price available in cash or do not know for sure that you will live in that particular place for at least 5 years, forget about buying!
In addition, foreclosure auctions ("Zwangsversteigerung") have many pitfalls and require a lot of experience (and luck). In most cases, very little information is given about the property to be auctioned and you bid based on your gut feeling!