# Calculating Rental Yield (Mietrendite): Is Buying Worth It?

> Don't just rely on your gut feeling. Learn the formula for Gross Rental Yield and understand why 3-4% is considered good in German cities.

Canonical: https://www.investbud.de/en/blog/calculate-rental-yield-germany-invest
Last updated: 2026-10-26

Investors in Germany often focus on cash flow and 'Mietrendite' (rental yield). Unlike in other high-risk markets, German real estate offers lower but very stable yields. Before buying an investment property (Kapitalanlage), you must run the numbers.

## 1. Gross Rental Yield Formula

The basic formula is: (Annual Cold Rent / Purchase Price) x 100. For example, if an apartment costs 300,000€ and brings in 10,000€ cold rent per year, the yield is 3.33%. In top cities like Munich, yields can be as low as 2%, meaning you are betting on value appreciation rather than immediate cash flow.

## 2. The Leverage Effect

Why invest for 3% when a savings account might offer similar rates? The answer is leverage. You are using the bank's money to generate returns. Since interest on investment loans is tax-deductible in Germany, borrowing money to buy property is tax-efficient.

## Related

- [German Real Estate Blog: Guides & Insights](https://www.investbud.de/en/blog)