High investment, high return? How to rent out your furnished apartment

Rental price brake for landlords of furnished properties

There is no set legal definition for when a property is considered furnished, but common case law states that it is furnished when more than half of the furnishings needed for a household are provided by the landlord. Therefore, if you rent out a partially furnished apartment, it may be considered furnished under certain circumstances. Landlords of properties of this type can charge a higher rent for them, as the furnishings increase the utility value of the property. However, it should be noted that furnished apartments fall under the rental price brake. There are only two exceptions to this. This applies if you rent a property furnished on a temporary basis or if there is a sublease agreement for a furnished apartment under which only a furnished room in the landlord's apartment is rented out. In such cases, the amount of rent may be freely determined without regard to the local rental value.

Furthermore, if the tenant does not have his or her main residence in the furnished apartment and it is, for example, a temporary or vacation accommodation, the rental price brake also does not apply. However, renting an apartment to students for longer than one semester means that you are renting a furnished apartment on a long-term basis, meaning the rental price brake applies again. In this case, you as the landlord must use a comparable unfurnished apartment to calculate the additional rent for furnishing. How exactly this surcharge is calculated, however, is not regulated, nor does a landlord have to disclose the calculation.

Investors can profit from these benefits

Renting out an apartment furnished has various advantages. In addition to the higher income from the additional rent, renting furnished apartments also offers some tax advantages. This allows you to claim the cost of home furnishings for tax purposes. Repairs to furniture and other fixtures such as the kitchen are also deductible. All pieces of furniture that cost less than 800 euros at the time of purchase may even be attributed in full to income-related expenses. This is especially worthwhile for less costly but essential furnishings such as beds, table or chairs. In addition, furnished apartments tend to wear out more slowly as working tenants spend less time here when they are working during the day.

Significantly more flexible rental pricing

There are different approaches to the amount of the rent and the furnishing surcharge. The Berlin model, for example, provides for a furnishing surcharge of two percent for the current value of the furnishings when the lease is signed. This is based on straight-line depreciation over a period of ten years and a return on capital of 14 percent. Under the Hamburg model, interest is charged on the purchase cost and depreciation is charged on the furniture over its normal economic useful life. The depreciation period for furnishings is seven years, for which 15 percent is depreciated annually. For landlords, this model is considered the cheaper option to calculate the surcharge for furnishing.