Calculations and numbers

The profit on a rented property is generated continuously on a monthly basis immediately from the date of purchase, and additionally in the medium and long term during the rental phase and upon a later resale.

Let us assume by way of example that buying a flat costs 1,500 EUR per month. The owner-occupier who moves into the property pays this 1,500 EUR themselves. For the landlord, this is completely different. There, every month the tenant pays a considerable proportion through the basic rent. In addition, there are ongoing tax advantages when purchasing a rented property. It is often the case, to stick with the example, that the tenant and the tax office bear ¾ or more of the ongoing expenditure. In this case, therefore, 1,175 EUR every month.

So the profit is generated directly month after month right from the start. Because every month, other people (in this case tenants and the tax office) pay 1,175 EUR towards building your wealth. That means passive income of 13,500 EUR flows in every year. Over 10 years, that already amounts to 135,000 EUR in real additional income.

Because rents are adjusted by the management every few years in line with inflation, the personal contribution generally decreases continuously until, after a certain time, even the tenant and the tax office completely pay the entire savings rate that flows into the acquisition of the property.

In our practice, it is very often the case that over the years the buyer only puts up ¼ or ⅕ of the purchase price of the property themselves. Therefore, they multiply their own money extremely, often quadrupling or quintupling it. And since real estate as a tangible asset generally provides a hedge against inflation, the value of the property increases over the years. This is also very rewarding because when the property is sold later, a higher value flows back. And for private capital investors, this is possible tax-free after a period of 10 years.

Here is an example of this too:
Purchase price of the property EUR 400,000
Own contribution over the total years e.g. 1/5 = 80,000 EUR paid oneself
In that case, tenants and the tax office pay four-fifths of the purchase price over the entire period
Value of the property after 30 years due to inflation adjustment, e.g. 600,000 EUR
Tax-free profit for the landlord: EUR 520,000, which is more than half a million EUR with just 1 flat

Good property management costs approximately €13-16 net per month. For that amount, it makes no sense to draw up a service charge statement yourself, carry out a qualified rent increase yourself or take care of things like lettings yourself. That is what professional management specialists are for. They usually have no idea about construction or property selection. Management specialises in looking after a property professionally, taking as much work as possible off the owner's hands and significantly increasing the value of the property in the long term. A good management company needs trained professionals for this. They also need to know the legal basis so that, for example, regular rent increases are correctly issued and implemented. Ultimately, good management doesn't cost money, but rather generates significantly more profit and a high level of security.