Real Estate Glossary
Learn key terms and concepts for German property investment
Buying
What comes on top of the price
- GrunderwerbsteuerGerman property transfer tax paid when purchasing real estate
- NotarkostenNotary fees for property purchase contract and registration
- GrundbuchLand registry - official record of property ownership and encumbrances
- MaklergebührReal estate agent commission, usually 5.95% to 7.14% in total incl. VAT
- NebenkostenClosing costs including taxes, notary, registration, and agent fees
Financing
How the money comes together
- EigenkapitalEquity - own capital invested in a property purchase
- FremdkapitalDebt capital - borrowed money used to finance purchase
- HypothekTraditional mortgage directly tied to a specific loan amount
- GrundschuldLand charge - security interest registered against property for mortgage
- ZinssatzInterest rate charged on mortgage loan
- TilgungPrincipal repayment rate - percentage of loan repaid annually
- AnnuitätFixed monthly payment combining interest and principal repayment
- LeverageUsing borrowed money to amplify investment returns
Running the numbers
Whether the flat pays for itself
- MietrenditeRental yield - annual rental income as percentage of property value
- CashflowNet income from property after all expenses and debt payments
- NOI (Net Operating Income)Property income after operating expenses but before debt service
- Cap RateCapitalization rate - NOI divided by property value
- ROI (Return on Investment)Total return on invested capital including cashflow and appreciation
Owning
What keeps running after the purchase