Test the Deal, Don't Admire It
Financing and the numbers · Stand: 2026-08-10
Base case: ten-year, after-tax, levered IRR on €29,500 of equity, assuming 2%/year price and rent growth and 4% selling costs – about 3.8% nominal, roughly 1.8% real. Below the mortgage rate. That is what a fully honest deal looks like in 2026, and if your spreadsheet says 9% you have left something out.
Now move one input at a time:
| Change | IRR | Δ |
|---|---|---|
| Base case | 3.8% | – |
| Appreciation 0%/yr | ≈ −6% | −9.8pp |
| Appreciation 4%/yr | ≈ 9.8% | +6.0pp |
| Purchase price −5% (€8,900 off) | 5.7% | +1.9pp |
| Mortgage rate +1pp | 2.1% | −1.7pp |
| Vacancy 1 month every year | 3.1% | −0.7pp |
| Non-recoverable costs +€300/yr | 3.4% | −0.4pp |
| Rent growth 3%/yr instead of 2% | 4.1% | +0.3pp |
Four conclusions a numerate buyer should take seriously.
1. Appreciation is not a variable, it is the deal. A ±2pp swing moves IRR across a ~16pp range; everything else combined moves it about 3pp. You are not buying a rental business, you are buying a levered claim on one city's land prices with a rental business attached. vdp had German Eigentumswohnungen at +2.6% year-on-year in Q2 2026, while Musterstadt, the invented town in our example, sits roughly 1% below the prior year. Your base case should be humble.
2. Price paid is the only large lever you control. €8,900 off beats a full percentage point of interest rate, and unlike the rate it is available for the cost of one uncomfortable conversation.
3. Rate risk is a liquidity risk, not a return risk. +1pp costs only 1.7pp of IRR, because at constant Tilgung a higher rate also amortises faster. But the monthly after-tax burn goes from €258 to €340. Solvency is what ends people, not IRR.
4. The inputs you will spend Saturday refining barely matter. Rent growth, indexation of service charges, exact AfA timing: rounding error. Stop polishing them.
Protocol. Build the model once. Then run six one-at-a-time stresses plus one combined bad Tuesday: 0% appreciation, +1pp at Anschlussfinanzierung, two months' vacancy in year 3, and a €4,000 Sonderumlage in year 5. If you can still pay every instalment in that world, the deal is survivable. Survivability first, return second – a deal you can hold through a bad decade beats a better deal you must sell into one.
Verified Primary Sources:
- §Engel & Völkers Immobilienpreise Bonn(Engel & Völkers, 2026-06)
- §vdp-Immobilienpreisindex Q2 2026 – uneinheitliche Entwicklung der Immobilienpreise(vdpResearch / Verband deutscher Pfandbriefbanken, 2026-08)