Buying a Tenanted Flat: What You Must Take Over and Check

Kevin Celentano · 2026-10-13

You have an exposé in front of you: Two rooms, 55 square metres, tenanted for years, the rent arrives on time. For a capital investor, that sounds good. No vacancy, no search for tenants, the income flows from day one.

With the flat, however, you also buy a contract that you did not negotiate and an owners' association that you do not know. Whether the rent is right, whether the reserve is sufficient and whether you could move in yourself later is not in the exposé. It is in the documents.

We show what you take over with a tenanted flat, what you should check before the notary appointment and what the rent in the example means for your cash flow.

01Tenanted or empty: what the difference means for capital investors

For capital investors, a tenanted flat is the normal case. However, it is not without its pitfalls. The most important difference lies in who set the terms.

Whether a tenanted flat is cheaper than an empty one depends primarily on the rent. If it is significantly below the market, this should be reflected in the purchase price. For owner-occupiers, the tenanted flat is usually worth less; for capital investors, it can be exactly the right thing.

02Sale does not break lease: what you take over with the agreement

The principle is set out in § 566 BGB. If the landlord sells the flat, the buyer takes their place. The tenancy agreement continues as before, with the same rent, the same deadlines and the same agreements. The tenant does not need to sign a new contract, and you do not have a right to change it through the purchase.

Legally, you enter into the contract with the entry in the land register. Until then, several weeks to months often pass after the notary appointment. In the purchase contract, an earlier cut-off date is therefore agreed for the transfer of possession, benefits and burdens. From this day on, the rents are yours, and the seller assigns their claims to you. How the purchase proceeds overall is described in our guide Real Estate Purchase Process.

03Checklist: These documents you should see before the purchase

Only owners have the right to inspect the association's documents (§ 18 Para. 4 WEG). As a buyer, you get them via the seller or with their power of attorney from the management. A seller who does not want to release them is a warning signal.

We explain the community documents in detail in the guide House Money for Condominiums. The order is important: read first, then reserve, then notarise.

04The rent: too high, too low and what is allowed after the purchase

The rent in the contract is your most important figure. Compare it with the local comparative rent, for example from the city's rent index.

If the rent is significantly above the market, the yield in the exposé looks good. If the tenant moves out, you might not get this rent again. In areas with rent control (Mietpreisbremse), you may generally charge at most 10% above the comparative rent for new lettings (§ 556d BGB). Exceptions apply, for example, for a higher previous rent.

If the rent is below the market, you have room for manoeuvre, but only gradually. A rent increase up to the comparative rent is possible according to § 558 BGB if the rent has been unchanged for 15 months. Within three years, it may increase by at most 20%, in many cities only by 15% (capping limit). The tenant must agree; the new rent applies from the third month after receipt of the request (§ 558b BGB). More on this in the guide Rent Increase: The Rules.

Example calculation: What a rent below market level costs

Lukas, 36, single, with a taxable income of €60,000, buys a tenanted flat in North Rhine-Westphalia. Built in 1992, 55 m², purchase price €165,000. The tenant has lived there since 2018 and pays €560 cold, i.e. €10.18 per square metre. The rent index shows €11.50 for comparable flats, which would be €632.50. The last increase was more than 15 months ago; the city has a capping limit of 15%. The name is fictitious; the figures are a calculation example and not a forecast.

How far can Lukas increase? The capping limit allows €560 × 1.15 = €644. The comparative rent is lower at €632.50 and is therefore the upper limit. Possible are thus €72.50 more per month if the tenant agrees or a court replaces the consent.

Lukas finances the purchase price completely at 3.8% interest and 1.5% repayment and pays the ancillary purchase costs of around €13,400 himself. From the house money, €95 per month remains with him, €40 he puts aside for the flat, and he plans 3% of the rent for vacancy.

The rent increase reduces Lukas's contribution before tax from around €321 to around €250 per month. After tax, the difference is smaller because the tax saving also decreases with the higher rent. It amounts to around €44 per month.

Lukas should not forget two things. The increase is a possibility, not an automatic process. And a tenant who has been paying punctually for years is worth something in themselves. Anyone who demands the maximum immediately after purchase risks a bad relationship.

05"Can I use the tenanted flat for myself later in 5 or 10 years?"

An interested party asked this question in a consultation, and it belongs before every purchase. The short answer: possible, but only via a valid termination for personal use. You may terminate if you need the flat for yourself, your family members or members of your household (§ 573 Para. 2 No. 2 BGB). The reason must be stated in the termination letter.

For the example, this means: Lukas's tenant has lived in the flat since 2018. If Lukas terminates in 2027 due to personal use, the notice period is nine months. If the house was only divided into condominiums after 2018 and it is located in a municipality with a ten-year blocking period, Lukas can only invoke personal use ten years after the first sale of the converted flat. If Lukas is not the first buyer, the period has already been running since this first sale and does not start anew, according to the prevailing view. Ask when the flat was converted and first sold.

06Who a tenanted flat is suitable for

07Risks: What you should watch out for

• Rent default: If the tenant does not pay, an eviction often takes many months. In the example, the instalment (€729) and non-apportionable house money continue, plus the apportionable part that the tenant no longer pays.
• Rent not achievable again: A rent above market level might not be maintainable when a tenant changes. Calculate with the comparative rent, not the rent in the exposé.
• Special assessments: If the reserve is small and roof, façade or heating are due, you pay your share.
• Tenancy law: Rent increases are capped, terminations only possible for legal reasons. Anyone who plans for more rent quickly is beautifying the flat's calculation.
• Interest rate change: After the fixed interest period, the remaining debt is refinanced. A higher interest rate increases the contribution.
• Vacancy after move-out: If a new tenant is not found immediately, you pay the instalment and full house money alone.
• Value development: No one can predict whether the flat will be worth more or less in ten years. Our calculation does not assume an increase in value.

08Further reading

• Condominium as a Capital Investment: Pros and Cons
• Termination for Personal Use: Deadlines and Requirements
• Rent Increase: The Rules
• House Money for Condominiums
• Ancillary Purchase Costs Calculator

09Sources

All sources retrieved on 13.10.2026.

• § 566 BGB (Sale does not break lease), § 566a BGB (Rent security), § 577 BGB (Tenant's right of first refusal)
• § 573 BGB (Personal use), § 573c BGB (Notice periods), § 574 BGB (Hardship objection), § 577a BGB (Restriction of termination after conversion)
• § 556d BGB (Rent control), § 558 BGB (Rent increase, capping limit), § 558b BGB (Consent)
• § 18 WEG (Inspection of administrative documents), § 28 WEG (Economic plan, annual statement, assets report)
• BGH, judgment of 03.12.2003, VIII ZR 168/03 (Operating cost settlement after change of ownership); BGH, judgment of 22.05.2019, VIII ZR 180/18 (Personal use, hardship); BGH, judgment of 04.02.2015, VIII ZR 154/14 (Abuse of rights in personal use), bundesgerichtshof.de
• Blocking periods for termination according to § 577a Para. 2 BGB: Bavarian Tenant Protection Ordinance (GVBl. 2025 p. 718, amended GVBl. 2026 p. 334), ordinances for Berlin and Hamburg, as of 29.09.2026