Own Home vs. Investment Property
Buy a home to live in - or one that works for you?
Same property, different financial picture. Here's how the two approaches compare.
Tax deductions only apply when you rent it out
The Tax Difference — Year 1 Snapshot
Same property. Different tax treatment.
In Germany, the tax benefits of property ownership only apply when you rent it out. Here's a simplified year-one view of the same property under both scenarios.
Financing (LTV)
350.000 € loan
350.000 € loan · 28.000 € equity
Mortgage payment
1.604 €
1.604 €
Interest portion
1.313 €
1.313 €
Operating costs
438 €
438 €
Depreciation (AfA)
—
1.167 €
Rental income
—
+1.167 €
Tax savings
€0
+804 €
Your out-of-pocket each month
Buy to Live In
2.042 €/mo
You pay everything. Nothing is deductible.
Rent + Invest
1.271 €/mo
1.200 € rent + 71 € net property cost
You could save
771 €/mo
by renting your home and investing in property
Year 1 estimate based on these inputs. The picture evolves as interest, depreciation, and rents change over time.
This is a simplified year-one view. Over 10-15 years, mortgage interest decreases, depreciation rates change, and rents typically grow — all of which shift the picture. That's what we look at together through your Financemate account.
These figures are illustrative and based on general assumptions (4.5% interest, 1% repayment, 2025 new build with 5% degressive AfA, 4% gross yield). They do not constitute financial advice. Individual results depend on personal circumstances, tax situation, and market conditions. Consult a licensed tax advisor (Steuerberater) for advice specific to your situation.
We Get It
A home isn't just a number.
Buying a home to live in is about stability, belonging, and building a life. It's where your kids grow up, where you feel settled, where the walls are yours to paint.
That matters, and no spreadsheet captures it.
If buying a home is right for you, go for it. We just want to make sure you understand the full financial picture first, so that whichever path you choose, you choose it with open eyes.
In case you want to explore the options in more detail - Here is how we work
From numbers to keys in hand.
Financemate walks you through every step — from understanding the tax difference to owning a fully managed investment property.
Understand the numbers
See how the tax treatment differs between living in a property and renting it out. Our calculators show you a personalised year-one view — and the multi-year picture.
Find the right property
We source new-build investment apartments that qualify for degressive depreciation. Every property is vetted for location, rental yield, and financing viability.
Get the paperwork done
From financing to notary to tax advisor coordination — we handle the complexity so you don't have to navigate it in a second language.
Own it, rent it out
Your tenant and the tax deductions help cover costs from day one. We stay with you for property management, tax filings, and the long-term view.
FAQs
Not necessarily. When you factor in closing costs (7-12% of purchase price in Germany), maintenance, HOA fees, property tax, and the opportunity cost of locked-up equity, renting and investing the difference can outperform buying in many scenarios — especially for internationals who may relocate.
You continue renting your home for flexibility, but purchase an investment property that a tenant pays for. Rental income can help offset mortgage payments, while depreciation and interest deductions may reduce your taxable income. You build equity without changing your living situation.
In Germany, owner-occupied homes get almost no tax benefits. Investment properties, however, let you deduct mortgage interest, depreciation (2-5% per year depending on build date), maintenance, and management costs against your rental income — often creating a paper loss that reduces your income tax.
Many investment properties can be financed at 100% or even 108% (covering closing costs too). With strong income and creditworthiness, you may need as little as €0-30,000 in cash. In some cases, monthly cashflow and tax effects can help offset ownership costs.
That's a common and valid path. Many international professionals start with an investment property, build equity and tax savings for a few years, then use that position to buy their own home later — often with better financing terms and more savings than if they had bought immediately.
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