Investment Property in Kassel: Figures, Locations and an Honest Calculation

Romolo Marini · 2026-10-13

You are considering buying a tenanted apartment, and Kassel has appeared on your shortlist. Perhaps because prices are significantly lower than in Frankfurt or Munich. Perhaps because someone has offered you a property there. Before considering an individual apartment, it is worth looking at the city.

Landlords in Kassel operate in a market where many indicators point to tight supply, yet there is no rent brake. At the same time, rents under existing tenancies are low. This combination determines whether the numbers work for you.

We have compiled the official figures and, at the end, run through the numbers for an apartment, including the monthly cash contribution required.

01Kassel in figures

All the figures used in our assessment, with sources and reference dates.

02Population and demand

Kassel officially has just under 197.000 residents. The city’s own population register records just over 207.000. The difference stems from the 2022 census, which revised the official figure downwards by 3,7 %. Only the population register is therefore suitable for a ten-year comparison. On that measure, Kassel grew from 200.507 residents at the end of 2015 to 207.622 at the end of 2025, an increase of 3,5 %.

Looking ahead, Hessen Agentur expects slight growth, from 197.200 residents in 2024 to around 201.100 in 2040. That is an increase of 2,0 %. By contrast, it expects a decline of 1,9 % for the Kassel administrative region as a whole. The city is therefore developing more steadily than its surrounding area.

For landlords, how these people live matters more than the population figure. In the 2022 census, 52,9 % of Kassel households consisted of one person, more than the Hessian average of 42,5 %. The average household contains 1,85 people. And 71,3 % of homes were rented. Kassel is therefore a city of tenants with many small households.

The state of Hesse updated these figures in its report on the rent brake. For 2024, GEWOS arrives at a vacancy rate of 1,9 %. Meanwhile, the housing stock grew more slowly than the number of households between 2019 and 2024. In its housing provision strategy, the city itself estimated a need for around 8.000 new homes by 2030, against land capacity for only around 7.200.

Demand is therefore there, and supply is growing more slowly. But that alone says nothing about the rent you can charge.

03Economy and labour market

Kassel is the economic centre of northern Hesse. On 30.06.2024, 116.371 employees subject to social security contributions worked in the city, 10,8 % more than in 2014. Of these, 66.944 commuted in from elsewhere. Only 29.314 Kassel residents worked outside the city. People who work in Kassel therefore often live in the surrounding area, and some of them are looking for a home closer to work.

The Kassel regional economic development agency identifies vehicle manufacturing and mobility, mechanical engineering, energy and environmental technology, and defence as key sectors. The city is home to Daimler Truck’s Mercedes-Benz axle plant, defence manufacturers such as KNDS and Rheinmetall, the headquarters of K+S, Kassel Hospital and the university, among others. The region’s largest plant, Volkswagen’s Kassel plant, is in neighbouring Baunatal.

This structure has two sides. It brings well-paid industrial jobs. But it also makes the city dependent on a small number of sectors. Daimler Truck employs around 2.700 people in Kassel and announced a cost-cutting programme in July 2025 involving 5.000 jobs nationwide, primarily affecting administration, including in Kassel.

The city’s unemployment rate stood at 8,4 % in September 2026. That is significantly higher than the 6,1 % across the employment agency’s entire district, but lower than the 9,0 % recorded a year earlier. For landlords, this means the tenant base is mixed, and not every household can afford higher rents. According to GEWOS, the rent burden ratio, meaning rent as a share of household income, was 21,2 % in 2025.

The University of Kassel had 21.131 students in the winter semester 2025/26, including 4.775 in their first semester. Students primarily seek small apartments. This is precisely the segment that has recently seen a great deal of construction; more on that shortly.

04Rents, purchase prices and rental yields

There are two rent figures for Kassel, and they are far apart. The qualified rent index for 2026 reflects rents under existing tenancies, including contracts that have been running for years. For a 65 m² apartment built in the 1960s or 70s in an average location, it gives 7,34 €/m². Rents in new listings had a median of 9,62 €/m² in 2025 and have risen by 4,1 % per year since 2020.

The rent index is valid until 31.12.2027 and was updated from the 2024 rent index by the inflation rate of 4,07 %. Supplements apply, for example, for a complete fitted kitchen (12,2 %) and energy-efficiency refurbishment (up to 13,9 %), alongside a range of 17 % above or below the reference figure.

The property valuation committee examined purchase prices closely for 2025. Existing apartments cost an average of 2.530 €/m², with an average size of 66 m² and a purchase price of 172.188 €. That is 21,5 % more than in 2024, following two years of falling prices. New-build apartments excluding micro-apartments stood at 5.356 €/m² on first sale, while micro-apartments of up to 30 m² cost 6.471 €/m².

The purchase price and rent allow you to calculate the purchase price multiplier. It shows how many years of annual rent excluding service charges the purchase price represents. Its reciprocal is the gross rental yield. We calculated both for an average existing apartment (2.530 €/m²) using three rent assumptions.

The range illustrates the central problem. With rent at rent-index level, the gross yield remains around 3,5 %. Only rent close to asking-rent levels takes it above 4,5 %. Letting a property at the market rent is permitted in Kassel. With an existing tenancy, however, you can only approach that level gradually. You can check your own figures using the rental yield calculator.

05Districts at a glance

Kassel has 23 local districts. The property valuation committee records where apartments are sold. These eight districts saw the most sales in 2025. It does not publish prices by district, so we describe their character without price figures.

The rent index indicates how good an individual address is. It assigns every street to one of four residential location categories, from “basic” to “very good”, and the city displays this on a residential location map. One distinction stands out: basic and average locations have the same base rents in the 2026 rent index. Only good and very good locations have higher figures, for example 7,73 and 8,21 €/m² for 65 m² and construction years 1961–1977.

06Rules for landlords in Kassel

There is no rent brake in Kassel. The Hessian Tenant Protection Ordinance of 2020 lists 49 municipalities; Kassel is not among them. It expires on 25.11.2026. The state government intends to extend it to 71 municipalities. Kassel is also absent from this draft dated 24.09.2026. The state’s report examined whether Kassel’s market was under pressure and found that two of five criteria were met. More would have been required for inclusion.

Two rules follow from this. For a new letting, the rent can be freely agreed. The only limits are the prohibition on excessive rents (§ 5 Wirtschaftsstrafgesetz) and rent usury. For an existing tenancy, the general rent increase cap applies: the rent may rise by no more than 20 % over three years and must never exceed the local comparable rent according to the rent index. Anyone buying a tenanted apartment at 7 €/m² will therefore need years to reach 9 €/m².

When buying in Hesse, you pay 6,0 % property transfer tax. Notary and land registry fees add around 1,5 to 1,9 % of the purchase price if you use financing. Estate agent fees may apply depending on the property. The state’s Hessengeld grant is available only for owner-occupied homes, not for investors. You can work out your acquisition costs using the acquisition costs calculator; our article on notary fees explains the notary’s individual charges.

07Worked example: a tenanted apartment in Kassel

Take Markus, 41, single, employed and with taxable income of 60.000 €. He buys a tenanted apartment of 65 m², built in 1972, in an average location. The purchase price of 165.000 € corresponds to the average for existing apartments in 2025. With a fitted kitchen, the rent is exactly at rent-index level. The name is fictional; the figures are a worked example, not a forecast.

In this example, Markus contributes around 177 € a month from his own pocket, after tax. Of this, 206 € goes towards principal repayment and therefore his own wealth. Excluding principal repayment, a small after-tax surplus of around 29 € a month remains.

Why is the tax saving not higher? With income of 60.000 €, Markus is in the progressive tax band, and the loss of just under 4.000 € saves him around 38 cents per euro. Our article on taxing rental income explains how rental income is taxed.

Interest and rent have the greatest effect on the figures. However, asking-rent levels cannot be achieved immediately with an already tenanted apartment.

For comparison: a new-build apartment in Kassel

What changes if Markus buys a newly built apartment rather than an existing one? We assume 45 m² at the average price established by the property valuation committee for first sales in 2025 excluding micro-apartments: 5.356 €/m², without a parking space. This gives a purchase price of 241.020 €. Markus again pays property transfer tax (14.461 €), notary and land registry fees (4.200 €) from equity, totalling 18.661 €. The bank finances the purchase price on the same terms as above. We assume rent of 10,79 €/m². This is the figure in the 2026 rent index for a 45 m² apartment in an average location in the most recent construction-age category, 2021 to 08/2023. The rent index does not cover newer apartments. Market sources quote somewhat higher or lower figures for new builds: the IVD property association gives 10,00 to 10,50 €/m² for first occupancy (2024 data, 70 m²), while the portal immoportal.com gives 11,96 €/m² for apartments built from 2015 onwards (as at 01.10.2026).

Compared with the existing apartment, first-year depreciation is more than three times as high (10.334 € instead of 2.832 €), and a new building generally incurs less maintenance expenditure in its first few years. In return, the price per square metre is just over twice as high, and the gross rental yield falls to around 2,4 % rather than 3,9 %. Before tax, Markus contributes around 633 € a month here; after tax, around 202 €. Because declining-balance depreciation is calculated each year on the smaller remaining value, the tax saving falls in subsequent years. Anyone buying before completion also bears the risk of construction delays and a later first rent payment. Kassel has no rent brake. For homes first used and let after 01.10.2014, it would not apply in any case under § 556f BGB, permanently rather than only for the first letting.

08Opportunities and risks in Kassel

There are verifiable points in Kassel’s favour. Vacancy is low, the city has grown for ten years according to its population register, and forecasts suggest further slight growth. Many single-person households and over 21.000 students generate demand for small apartments. Purchase prices are far below those in the Rhine-Main region. Without a rent brake, you are largely free to set the rent for a new letting.

The drawbacks are equally clear:

• Low rents under existing tenancies: often 7 to 8 €/m² according to the rent index; with an older tenancy agreement, rent rises only slowly.
• Labour market: unemployment of 8,4 % and reliance on a few major industrial sectors make demand sensitive to the economic cycle.
• Competition from new builds: micro-apartment developments bring many small apartments onto the market.
• Price fluctuations: purchase prices fell in 2023 and 2024 and rose by 21,5 % in 2025. One year is not a trend.
• Older stock: many apartments date from the 1950s to 70s; a refurbishment backlog can trigger special levies.
• Interest and vacancy: a higher refinancing rate increases the cash contribution required, and every month of vacancy costs the full rent.

Our article Apartments as an investment covers the general advantages and disadvantages of investing in an apartment.

09Other locations

Other cities in Hesse: Hesse overview · Frankfurt am Main · Wiesbaden

All locations compared: Where is investment property worthwhile? Cities compared in 2026 · Which federal state is suitable? All 16 compared

10Further reading

• Apartments as an investment: advantages and disadvantages
• Taxing rental income
• Notary fees when buying property
• Rental yield calculator
• Acquisition costs calculator
• Property transfer tax in Hesse

11Sources

All sources accessed on 13.10.2026.

• City of Kassel property valuation committee, Property Market Report 2026 (reporting year 2025), Tables 11, 14, 15, 28, Figure 21
• City of Kassel, Qualified Rent Index 2026, valid 01.01.2026 to 31.12.2027
• GEWOS, commissioned by the Hessian Ministry of Economic Affairs, Study to identify areas with tight housing markets, results report 2026, Kassel row
• Hessian State Government, Tenant protection to expand to 71 municipalities, 24.09.2026; Tenant Protection Ordinance of 18.11.2020, GVBl. 2020 S. 802
• City of Kassel, Statistics: figures at a glance (as at 31.12.2025 or 30.06.2024) and Statistical Annual Report 2015
• City of Kassel, Housing vacancies in Kassel (2022 census)
• Hessian Statistical Office, 2022 census: households in Hesse (02.07.2024) and Rents and home ownership (04.07.2024)
• Hessen Agentur, Hessian municipal directory, Kassel data sheet (2025)
• Kassel Employment Agency, Press release No. 60: unemployment continues to fall in September, 30.09.2026
• University of Kassel, More new students, more international students, 02.12.2025
• empirica, commissioned by the City of Kassel, Housing provision strategy for the City of Kassel, 13.04.2022
• Kassel regional economic development agency, Regional companies and sectors
• hessenschau.de, Cost-cutting plans at Daimler Truck: jobs in Kassel also affected, 09.07.2025
• § 558 BGB (rent increase cap), § 556d BGB (rent brake), § 32a EStG (2026 tax schedule), § 7 Abs. 4 EStG (depreciation), GNotKG Table B
• immoportal.com, Kassel rent index, apartments built from 2015 onwards, as at 01.10.2026 (market source, for context only)
• IVD Region Mitte and Kasseler Sparkasse, Property Price Index 2025, apartment rents for first occupancy of new builds in Kassel city (2024 data, for context only)
• § 7 Abs. 5a EStG (declining-balance depreciation), § 7b EStG (special depreciation), § 556f BGB (new builds and the rent brake)
• All worked examples, purchase price multipliers and yields: our calculations, as at 13.10.2026

Note: This page provides general information and does not constitute investment, tax or legal advice. All figures are worked examples with disclosed assumptions or official values with stated reference dates, as at 13.10.2026.