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Munich property investment 2026: a worked calculation
Munich flats list at €9,053/m² with a 3.4% gross yield. A step-by-step calculation of closing costs, mortgage, capped rent and the monthly gap to carry.
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Munich rents do not cover a standard mortgage
At current asking prices, a typical Munich flat bought with 20% down does not pay for itself from rent. Apartments in Munich are listed at a median €9,053 per m², and newly let flats ask €25.94 per m² in cold rent, a gross rental yield of 3.4% and a price-to-rent multiple of 29.1 (Munich property prices, as of 25 October 2026). In other words, a flat costs as much as 29 years of cold rent. Munich ranks among the ten most expensive markets in Germany on the rental yield ranking.
Munich can still make sense for buyers who can carry a monthly shortfall for years and plan to hold for the long run. The steps below show how large that shortfall is for a typical flat.
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Step 1: Price the flat and the district
The typical listed flat in Munich is 72 m² at €600,000. The middle half of listings lies between €7,342 and €11,364 per m², and the districts are far apart. Neuperlach lists at €5,989 per m² with a gross yield of 5.3% on 100 listings, while Harlaching lists at €12,846 per m² and 2.4%. Within the city, the district alone changes the price per m² by a factor of more than two.
Two signals in the same data suggest some room to negotiate. The median listing stays online for 17 days, and 6% of listings have had a price cut, twice the share in Leipzig or Dresden on the same date.
Step 2: Add closing costs
Bavaria has not set its own Grunderwerbsteuer rate, so the federal 3.5% applies (§ 11 GrEStG). That is the lowest rate in Germany and makes Munich's closing costs smaller as a share of the price than in North Rhine-Westphalia (6.5%) or Saxony (5.5%). With the default assumptions of the InvestBud closing costs calculator:
Cost | Rate | €600,000 flat |
|---|---|---|
Grunderwerbsteuer | 3.5% | €21,000 |
Notary | 1.5% | €9,000 |
Land registry | 0.5% | €3,000 |
Broker | 3.57% incl. VAT | €21,420 |
Total | 9.07% | €54,420 |
With a 20% down payment of €120,000, you need €174,420 of your own money. Without a broker it is €153,000.
Step 3: Price the mortgage
The loan is €480,000. At 3.5% interest over 30 years, the defaults of the mortgage calculator, the monthly payment is about €2,155. These are assumptions, and your offer will depend on the market and your finances. In the first month, €1,400 of that payment is interest and about €755 is repayment of principal.
Step 4: Check the rent you are allowed to charge
At the asking rent of €25.94 per m², a 72 m² flat brings in about €1,868 a month in cold rent. Munich's rent page shows a similar median of €25.81 per m² across 1,888 listings, with a median of 10 days to let (Munich rent prices, as of 24 October 2026). Finding a tenant is unlikely to be the problem, but the legal cap on new rents can be.
Munich is designated under Bavaria's Mieterschutzverordnung, which applies from 1 January 2026 until 31 December 2029. In a designated area, the rent at the start of a new tenancy may be at most 10% above the local comparative rent (ortsübliche Vergleichsmiete) under § 556d BGB. The comparative rent comes from the Munich Mietspiegel, which has an online calculator. Listing rents show what landlords ask, and the cap may allow less, so run the flat through the Mietspiegel before you rely on €1,868. The cap does not apply to a flat first used and let after 1 October 2014, or to the first letting after a comprehensive modernisation (§ 556f BGB).
Step 5: Work out the monthly gap
Against a mortgage payment of €2,155, the asking rent of €1,868 leaves a gap of about €288 a month. That is before the part of the owners' association fee (Hausgeld) you cannot pass on to the tenant, maintenance reserves, vacancy and income tax. Roughly €755 of each payment is principal you are repaying to yourself, so the gap is partly saving. It is still cash you have to find every month.
Run the same defaults for a typical Leipzig flat (€199,990 at €12.00 per m² asking rent) and the cold rent covers the mortgage with about €98 to spare. Munich suits a buyer with a high income, a large deposit or both, who accepts a low running return in exchange for owning in Munich. The cash flow calculator adds running costs and tax for a specific flat.
What the tax rules add
Depreciation (AfA) applies to the building share of the price only, since land is not depreciated. The rate depends on when the building was completed (§ 7 Abs. 4 EStG):
completed after 31 December 2022: 3% a year
completed between 1925 and 2022: 2% a year
completed before 1925: 2.5% a year
How the purchase price splits between land and building therefore changes the deduction, so establish that split before you buy. If you sell a rented flat within ten years of buying it, the gain is taxable as a private sale; after ten years it is not (§ 23 EStG).
Frequently asked questions
What gross rental yield can I expect in Munich?
The city-wide gross yield on asking prices and asking rents is 3.4% as of 25 October 2026. It ranges by district from about 2.4% in Harlaching to 5.3% in Neuperlach. Net yield after closing costs, running costs and tax is lower.
Does the Mietpreisbremse apply in Munich in 2026?
Yes. Munich is listed in Bavaria's Mieterschutzverordnung, in force from 1 January 2026 to 31 December 2029. New-tenancy rents may be at most 10% above the local comparative rent, with exceptions for flats first let after 1 October 2014 and the first letting after a comprehensive modernisation.
How much equity do I need for a typical Munich flat?
With 20% down and the closing costs above, about €174,420 for a €600,000 flat, or €153,000 if no broker is involved. Banks set their own requirements, so treat this as a planning figure.
This article is not tax, legal or investment advice.
