Whether you’re a young adult living on your own for the first time, moving to a new neighborhood, or trading in your home for a rental property, you need to be well-prepared before you begin your apartment search. After all, attractive rental apartments are rare, and finding a suitable apartment at the right price is no easy task. We have written you this rental apartment guide for your orientation to make it happen anyway.
To find an ideal apartment or rental home – and to make the search smoother – there are some steps you can take to avoid unnecessary frustration and speed up the process.
Tips for finding a new home to rent:
1. what rent can you afford?
In a tight housing market, considerations start with the budget. In doing so, you will always come across two rules of thumb:
- Rule-of-40: A quick-and-dirty rule to determine affordable rent. Divide your annual gross household income by 40, and your monthly rent should not exceed this figure. For example, if you earn €40,000 annually, the monthly rent should not exceed €1000. However, the rule is not very accurate, because you use your gross income as a basis. The decisive factor is ultimately the net income from which you end up paying your rent. The 30-percent-rule becomes more accurate here.
- the 30-percent-rule states that you should not spend more than 30% of your net household income on warm rent. The net household income includes the net salaries of all employed persons as well as child benefits and other allowances such as scholarships, Bafög, etc. If the total net income amounts to 3000 euros for 2 employed persons in the household, the rent should not exceed 900 euros. However, the share is sometimes raised to 40% due to the high level of rent. Thus, our example household would be able to afford a warm rent of 1200 EUR.
If you take it very carefully you can calculate your budget exactly. This is also a good opportunity to get rid of regular charges that have accumulated over time but that you no longer use, such as subscriptions and memberships. This can save you money and also increase your budget for rent.
Calculate your budget using a simple spreadsheet or an online service like Mint or PearBudget. List your income and expenses down to the penny, from fixed obligations like phone bills, student loans, and car payments to variable monthly costs like food, entertainment, and clothing, and identify potential savings.
2. What affects the amount of rent you pay?
There are several ways to achieve a lower monthly rent. Here are the main factors that greatly influence the amount of rent.
– Proximity to the city center. Old wisdom from real estate professionals states the three most important factors in property value are “location, location, and location.” The more central a place lies, the easier it is to reach friends, work, and recreational activities, but the more expensive the rent gets. Even though living downtown seems to be a priority, it doesn’t mean much if you can’t afford the rent. Various websites offer rent price tables where you can compare rent prices in different parts of the city. Of course, there are always bargains in attractive neighborhoods, but you will need a fair amount of luck and patience.
– Consider transportation costs. In urban areas, the budget for transportation is usually lower, as you can reach more destinations on foot, by bike, or by public transport. So, if you decide to live outside the city center, you also need to consider the additional transportation costs.
– Find a roommate. The days of only students living in shared apartments are over. If you are comfortable at home with some company you can cut the price of an apartment by half or more. In addition, the sociability in a shared apartment also has many advantages such as joint activities and conversations, from which valuable friendships can easily develop. Especially when you move to a new city, roommates can greatly help you quickly form new social bonds. You need landlord approval to live in a shared apartment, but having a roommate can greatly reduce the financial pressure associated with rent. Just make sure you have a written agreement with your roommates that outlines all the obligations. For the most part, leases are either signed with a master tenant who sublets to the other tenants, or all residents are considered master tenants. Templates and digital lease agreements can also be found on our page.
– Check if you can receive subsidies. In Germany, there is government support for people with lower incomes who cannot afford to pay the rent. The most common of these is the Wohnberechtigungsschein, which gives rent-seekers access to government-subsidized housing. However, some areas require a separate application for subsidized housing. Search city websites for criteria for subsidized housing and see if you qualify for grants. Often, income must not exceed certain limits.
– Think small. The square footage of an apartment is critical as is the number of rooms. If you opt for a studio or one-bedroom apartment, you may have to sacrifice some space, but you’ll make up for it with corresponding monthly savings. Based on your lifestyle, visitors, pets, and storage space check how much space you really need. Smaller apartments are more affordable.
– Negotiate. Can you impress with your craftsmanship, reliability, or other criteria over other competitors? Try to bargain! Check out prices for comparable apartments with similar amenities in the area and try to get a better deal. Or sign a lease with a longer term to get a better deal overall.
3. add house content insurance
In some cases, landlords ask for house content insurance. While this is not mandatory, landlords may opt for other tenants who present it. Decide for yourself if household insurance makes sense for you. This will compensate you for damage caused by e.g. burglary, fire, or water damage to all movable furnishings or valuables in the apartment. The building itself is usually insured by the landlord.
Fortunately, house content insurance is quite affordable. Rates depend on location, the amount of coverage, and the amount of rent paid. Some providers advertise quotes for €1 -3 per month.
4. check your credit history
Many landlords run credit checks to see if there are any anomalies with potential tenants, such as unpaid bills, bankruptcies, or dunning letters. You can expect a credit check. The three major credit agencies (SCHUFA, Creditreform, and Avarto Infoscore) have corresponding creditworthiness data, with SCHUFA being by far the most common in Germany. By the way, all three credit bureaus (SCHUFA, Creditreform, Avarto Infoscore) are obliged to provide you with a free copy of your data every year upon request (DSGVO Art 15). This costs you nothing and does not affect your score, but it takes up to three weeks to actually receive the report. In addition, the report also contains personal data that is exclusively for you. If you want to quickly get a Schufa credit check online, with only relevant features to prove your financial reliability, you can order the Schufa credit check directly online at Hominext.
5. start looking for an apartment
Do not postpone your apartment search until the last minute. Ideally, you should start about three months before the date you need to move. Be aware of the terms for giving the notice to vacate your current apartment. A notice of termination must be written and signed by all tenants. You must also observe the agreed or legal notice period. This is usually 3 months. However, you can often negotiate a shorter notice period with landlords if you propose a suitable next tenant yourself.
Tips to find an apartment:
- use your network. As in many other areas, a network is extremely helpful when looking for an apartment. Communicate to acquaintances and friends what you are looking for. Post on social media a brief introduction and the key data of your desired apartment. Again and again, attractive apartments are not publicly advertised but passed on through personal contacts.
- place a rental request. On Hominext you can create a rental request and automatically receive suggestions for suitable apartments.
- browse through advertising platforms. Hominext, Immoscout24, Immowelt, and eBay Kleinanzeigen are interesting platforms where you can find many ads. Hominext also offers a function with which you can get advertisements from all platforms. This way you can save a lot of time and work and still not miss anything.
And a few general tips. The equipment of an apartment depends on you and your lifestyle, but there are a few things you can do.
And a few more general tips. While the décor of an apartment depends on you and your lifestyle, there are a few basic things you should pay attention to:
– Price. Don’t look at apartments that are beyond your budget. Landlords are unlikely to offer significant discounts on rent, and you could end up either overspending or disappointed if you can’t afford the apartment of your dreams. Instead, set a firm number and only look for apartments that fall within your budget.
– Transportation. If you don’t currently have a car, check the proximity to public transportation for each potential apartment. An apartment may be inexpensive and in a great neighborhood, but if you have to walk or hail a cab most of the time, it may not be as attractive. To get a realistic picture of the true cost of an apartment, you also need to include the cost of transportation in your budget.
– Convenience. Choosing an apartment that is conveniently located can make your life a lot easier. Look for an apartment that is close to your work, shopping, transportation, and recreation.
– Safety. Not only should an apartment be located in a safe neighborhood, but landlords should also make an effort to ensure that their tenants feel safe in it. Proper locks on every door, private entrances, and security measures should make you feel comfortable.
6. rental deposit
In Germany, it is common for landlords to require a rent deposit of 3 cold rents. This serves as security for the landlord to cover potential rent losses, as well as compensation for damages caused by the tenant. So if you are paying 800 euros per month for a new apartment, you need to have 2,400 euros ready when you sign your lease. A word of warning: don’t transfer money in advance without making sure the landlord is reputable. There are always fraudulent advertisements. Here you can find more information about fake advertisements.
7. Prepare your documents
Landlords take a significant financial risk if they do not thoroughly screen each applicant. For this reason, some landlords require additional documentation in addition to credit and background checks. Gather the following documents and keep them before your search:
– Employment Verification. The landlord needs to know that you are employed and able to make monthly payments based on your salary. This letter should be printed on company letterhead and include confirmation that you work there, the length of time you have been employed to date, and your monthly or annual salary. It should be signed by a supervisor.
– Pay stubs. These confirm the information in the employment letter.
– Tax returns. If you are self-employed, recent years’ tax returns should suffice in lieu of pay stubs. You may also need to explain what you do for a living and how much you earn each year.
– Letter of reference. A landlord wants to know that you are a good tenant. Letters of reference can also help you stand out from the crowd. If you’ve rented before, ask for reference letters from previous landlords stating that you paid your rent on time and took care of the apartment. If you’ve never rented before, ask for letters from previous employers or acquaintances who can confirm that you’re responsible and honest. Just make sure these letters are from people who are not related to you – gushing recommendations from your mother are not enough
8. Talk to the tenants
You want to make a good impression on the landlord, but the landlord also needs to make a good impression on you. The best way to find out if you really want to live in a particular apartment is to talk to past and current tenants. Generally, you want a landlord who is courteous, helpful, and prompt about maintenance issues. Ask about tenant turnover, infrastructure issues, and response time to complaints.
This is also an ideal time to inquire about the cost of living in the area, especially if you are moving to a new neighborhood. Current tenants can give you an idea of what they spend on transportation, utilities, and entertainment, as well as information about the area, such as where to eat well, where certain school districts are located and what amenities are available.
9. Apartment handover
Usually, the rental agreement is signed at the handover of the apartment. Do not sign the contract until everything is in order and you are satisfied with the apartment, location, and landlord. Since previous tenants may have caused damage or maintenance problems, be sure you are not held responsible for problems that were not your fault. Document any damage in writing or by photo and talk to the landlord about it.
Be prepared and check the following items:
– Turn on lights and faucets and flush toilets throughout the apartment to make sure they are all working properly.
– Look for rodent or insect infestations, especially in closets and storage rooms. Chew marks or droppings as an important warning sign.
– Take a cell phone charger with you and plug it into outlets to make sure they are all working.
– Check smoke detectors.
– Open and close doors and windows.
– Turn on all appliances to make sure they are working.
– Inspect floors and walls for damage of any kind. Carpet, hardwood, linoleum, drywall, and tile should all be examined.
– Take photos of all problem areas with a digital camera and show them to the landlord. Save the file so that if there are any discrepancies with maintenance or problems with refunding the security deposit when you move out, you will have proof that you did not cause the damage.
10. read and sign the lease agreement
Rental contracts vary depending on the time frame and terms of the contract.
– Fixed-term leases. If you only need the apartment for a fixed period of time you can sign a fixed-term rent with the landlord for three months, six months, one year or even two years. Separate notice periods can also be agreed here.
– Unlimited rental. There is no foreseeable end of the rent. The contract is concluded for an indefinite period and can be terminated subject to the relevant notice period.
– Subrental. They often occur when a tenant has to leave an apartment but still has a duty to the landlord and is responsible for the rent. In a sublease, the original tenant (master tenant) finds another occupant (subtenant) to take over the rent payments until the term is up. The subtenant then pays the master tenant, who still pays the landlord, for the duration of the rental. Subrental agreements must be approved by the landlord. If someone makes you a favorable offer and says you can’t change, that could be suspicious. Also, subrentals are sometimes used as the contract type of choice for WGs.
You can find more information on various rental agreements as well as samples here. In addition to the terms, your rent will contain agreements about the amount of the security deposit and the conditions under which the deposit will be retained by your landlord, the terms of the lease, terms of termination, and violations that may result in eviction, such as late or missed payments, destruction of property, or other things the landlord deems unacceptable.
The rent may not be negotiable, but the conditions often are. If there is any ambiguity about your creditworthiness and ability to pay, for example, because you are a student or young professional, you can ask a guarantor to co-sign. Depending on how desirable the apartment is, how well-located it is, and the current state of the housing market, you may be able to get a discount if the landlord wants to rent it out as soon as possible.
Especially in larger cities, the search for an attractive apartment or house turns out to be difficult. But with the right preparation and the right tools, the process can be much more effective and pleasant. This leaves more time for furnishing, decorating, and housewarming parties – in other words, for the things that are fun.