\r\n\tAs a capital investment, real estate generates returns from three sources: rental income, value appreciation, and AfA volume, which is the total amount for “depreciation for wear and tear” that you can use over many years to reduce your taxable income, thereby lowering your tax liability.\r\n<\/p>\r\n
\r\n\tThe AfA volume is reestablished with each sale of the property (but not with a gift\/inheritance); the new owner can thus fully utilize the AfA volume anew.\r\n<\/p>\r\n\r\n
\r\n\tWhile rental income is evident to everyone, some consider the value appreciation of the property questionable, as it is supposedly uncertain or at least not foreseeable in its magnitude.\r\n<\/p>\r\n
\r\n\tAnd the third pillar of property returns, the AfA volume or tax benefits in general, is sometimes dismissed as mere hocus-pocus.\r\n<\/p>\r\n
\r\n\tYet, AfA volume and other tax benefits of real estate are very real and financially advantageous, especially for high earners.\r\n<\/p>\r\n\r\n \r\n\t\tOne reason why the monetary value of tax benefits may not be recognized or acknowledged by everyone is that tax benefits only fully unfold their impact with a correspondingly high tax burden.\r\n\t<\/p>\r\n\t \r\n\t\tThose with lower tax obligations find real estate AfA and other tax benefits less interesting. In contrast, tax benefits are particularly attractive for high earners. The higher the income, the better.\r\n\t<\/p>\r\n\t \r\n\t\tThus, misunderstandings or rejection of the tax argument may sometimes include envy or annoyance that precisely<\/em> those who already earn a lot<\/em> benefit most significantly (in absolute terms) from tax advantages.\r\n\t<\/p>\r\n\t \r\n\t\tSometimes skepticism toward “tax benefits” may also stem from a failure to realize that saved taxes are equivalent to income, and indeed tax-free income.\r\n\t<\/p>\r\n\t \r\n\t\tIf you no longer have to pay 1,000 EUR that you would otherwise have owed in taxes, you have ultimately earned 1,000 EUR, and that\u2019s tax-free.\r\n\t<\/p>\r\n\t \r\n\t\tThe saved taxes are not counted as imputed income or similar. Instead, the tax office either transfers you 1,000 EUR, or you simply don\u2019t have to pay that 1,000 EUR, even though you otherwise would have had to.\r\n\t<\/p>\r\n\t \r\n\t\tEven in the latter case, where you don\u2019t pay something that you otherwise would, this ultimately counts as income and, as noted, is tax-free.\r\n\t<\/p>\r\n<\/section>\r\n\r\n \r\n\t\tAs a tangible asset, the value of real estate (except in abandoned regions) rises approximately in line with inflation.\r\n\t<\/p>\r\n\t \r\n\t\tSince the inflation rate is around 2 percent in the long term, it seems reasonable to assume a 2% increase in value rather than the 1% increase often seen in example calculations.\r\n\t<\/p>\r\n\t \r\n\t\tFor condominiums in Germany’s TOP 7 metropolitan areas, the annual increase in value between early 2016 and late 2023, over a period of 8 years, was not 1 or 2 percent but 7<\/strong> (in words: seven<\/em>) percent.\r\n\t<\/p>\r\n\t \r\n\t\tAnd this 7 percent is the average across all condominiums, not just investment properties, nor only for Munich, but as an average across the 7 largest cities.\r\n\t<\/p>\r\n\t \r\n\t\tUpdate 05\/02\/2026: For the period “end of 2015 to end of 2025”<\/span>, i.e. over the last 10 years, the value increase specifically for condominiums in the top 7 cities amounted to a total of 78.8%, which still corresponds to a very notable 5.9 percent per year<\/span>, see Federal Statistical Office<\/a>. \r\n\t<\/p>\r\n\r\n\t \r\n\t\tAt Meine-Renditeimmobilie, calculations for your personal real estate investment are NOT based on value appreciation.\r\n\t<\/p>\r\n\t \r\n\t\tInstead, we calculate the cash flow, which should almost or fully cover the investment.\r\n\t<\/p>\r\n\t \r\n\t\tPositive, neutral, or slightly negative cash flow refers to a situation where you come out ahead, break even, or face a slight shortfall on a monthly basis when comparing income and expenses for the investment property.\r\n\t<\/p>\r\n\t \r\n\t\tEven a slightly negative cash flow initially does not necessarily make an investment property unprofitable.\r\n\t<\/p>\r\n\t \r\n\t\tAfter all, any minor contributions you may have to make each month represent an investment in a six- or seven-figure asset, which will eventually be yours and paid off.\r\n\t<\/p>\r\n\t \r\n\t\tThe tenant pays the lion’s share, even with a slightly negative initial cash flow. And the initially negative cash flow turns neutral and later positive as you increase rent while the loan rate remains the same.\r\n\t<\/p>\r\n\t \r\n\t\tThe assumed value appreciation is provided by Meine-Renditeimmobilie for illustration purposes with a conservative 1 and 2 percent as additional example calculations.\r\n\t<\/p>\r\n\t \r\n\t\tThe shared apartment concept at Meine-Renditeimmobilie is profitable \u2013 even in Munich \u2013 based solely on cash flow without the need to factor in value appreciation.\r\n\t<\/p>\r\n\t \r\n\t\tValue appreciation only really comes into play upon sale or refinancing. Nonetheless, this value growth is real and always works in the background.\r\n\t<\/p>\r\n\t \r\n\t\tDemographic developments are occasionally seen as a problem for long-term value development. However, Germany, along with the USA, is one of the world’s top immigration destinations.\r\n\t<\/p>\r\n\t \r\n\t\tEven if Germany’s population were to unexpectedly decline, this would happen in such a way that smaller places and rural areas would be abandoned (and \u2013 at least in Germany \u2013 also deconstructed), while prime locations would remain stable or even grow due to migration from surrounding areas.\r\n\t<\/p>\r\n\tThe Higher the Tax Burden, the Greater the Impact of Tax Benefits<\/h2> \r\n\t
Value Appreciation in Good Locations is Reliable<\/h2>\r\n\t