Walldorf – November 02, 2026 -- A rental property that brings in steady rent can still cost its owner money every month, according to real estate valuation firm Heid Immobilienbewertung. Its sample calculation shows a flat with a €1,600 annual surplus turning into a €2,800 yearly shortfall once interest rates rise and a renovation loan is added.
Gross rental yield leaves out the costs that matter
Buyers often look first at potential rental income. Gross rental yield offers a first orientation, but it ignores ongoing owner costs, necessary repairs and financing. Two flats with similar rents can therefore perform very differently.
Not every theoretically possible rent can be achieved, either. Existing leases, the local rent level and legal limits on adjustments all decide what a landlord can charge. Basing a calculation only on high asking rents or future increases risks a financing gap.
A model flat swings from €1,600 surplus to €2,800 deficit
A realistic assessment starts with the sustainably achievable net rent excluding utilities. From that, owners deduct non-recoverable running costs, a reserve for future maintenance and a buffer for rent defaults. Interest and loan repayments then come on top. Repayments reduce debt, but they still shrink the money available each month.
The model: an 80 m2 flat at €9 net rent per square meter earns €8,640 a year. After €1,200 in non-recoverable costs, €1,600 in maintenance reserves and €240 for rent defaults, €5,600 remains before financing.
With €100,000 in remaining debt, 2% interest and €2,000 in annual repayment, the surplus is €1,600. If interest climbs to 4% and a €40,000 renovation loan is added, the result is a €2,800 annual shortfall. The owner would need to contribute about €233 a month.
Heid stresses this illustrates a possible liquidity strain, not an inevitable loss.
Roof, facade and building systems drive future bills
A well-kept appearance or an energy certificate does not settle the economics. Buyers should check which components have been renewed and which investments loom. Work on the roof, facade or building systems can be especially costly, so it pays to know which measures are urgent and which can reasonably wait.
Sequencing matters too. Planning a facade renovation together with an energy upgrade can save scaffolding costs, while separate projects may add expense. A full renovation is not automatically the best option; the extra benefit has to justify the cost.
No universal minimum rent makes a property pay off
The same rent can be enough for a largely paid-off building and too low for one with heavy debt and major renovation needs. Trouble starts when running costs and loan interest permanently exceed rental income, or when owners repeatedly top up funds for necessary maintenance.
Buyers should not count on rent hikes. Maintenance cannot be freely recovered through modernization rent increases, and legal limits, possible subsidies and existing tenancies determine what extra income is realistic. Heid recommends weighing rent, financing and building condition together over several years, including larger investments and possible interest changes.
Expected appreciation helps little if the money for the next renovation is missing.