Rent increases – what tenants and landlords need to know

What legal provisions exist and what you should bear in mind.

Garcia Immobilien

YOUR SPECIALIST FOR REAL ESTATE

We explain what you should look out for.

Rent increases – what tenants and landlords need to know

What legal provisions exist and what you should bear in mind.

Garcia Immobilien

YOUR SPECIALIST FOR REAL ESTATE

We explain what you should look out for.

Preparing for a rent increase – what legal conditions must be observed?

Garcia & Co. Immobilien

Find property Your personal consultation

If you own one or more rental properties, the question of whether to increase the rent will eventually arise. For you as an investor, a rent increase is often the only way to increase your return. What are the options for rent increases? What do you need to bear in mind, what legal regulations apply, and how should you proceed? Here is an overview of the most important points.

Increasing rent – how do you proceed?

There are various options for increasing rent. A distinction must be made between increases that are stipulated by law and those that are agreed upon.

The following options are available:

Adjustment to the local rent
Rent increase due to modernization
Contractual agreements in the form of graduated rent
Contractual agreements in the form of index-linked rent

The first two options are regulated by law, and the last one refers to an agreement in the rental contract. If you, as a landlord, want to implement a rent increase, you must adhere to certain limits. These are explained in the following examples.

As the name suggests, this option allows you to adjust the rent to the local market rate with the tenant's consent. You should consult a rent index for your region when doing so. The rent index lists all rents for apartments with similar amenities in a given location over the last six years. If your current rent is below this level, you can adjust the rent.

Various legal conditions apply to the increase.

The rent increase may not exceed 20 percent within three years.
You must notify the tenant of the rent increase in writing.
The rent increase must be justified.
You must provide the rent index that proves that the rent is currently below the local market rate.
The new rent only applies from the third month after notification
You may only increase the rent every 15 months.
The tenant has two months to object or terminate the lease.

Are you planning to modernize your rental property? If so, and if certain criteria are met, you can charge more rent. To make this possible, you should consider the following:

The tenant must be notified of the modernization measures in writing at least three months in advance. But be careful, an email is not sufficient.
The tenant is entitled to reduce the rent during the renovation work. However, this is only permissible if the property is not suitable for habitation. In the case of energy-efficient renovations, tenants are not entitled to a rent reduction in the first three months.
Since January 1, 2019, landlords have been allowed to pass on eight percent of the costs of modernization to the annual rent. Previously, this figure was eleven percent.
There is also a new cap, as the rent may not be increased by more than three euros per square meter within six years of modernization. If the rent is up to seven euros per square meter, the increase may only be a maximum of two percent.

Index-linked rent is a contractually agreed rent increase. The tenant and landlord agree that the rent will be based on the price index for the cost of living for private households in Germany published by the Federal Statistical Office.

The requirements for this are:

Here too, the agreement must be set out in writing.
Individual rent increases may only be implemented at intervals of at least one year.
The calculation and the new rent must be disclosed.
The legal requirements of § 558 BGB must be observed. According to this, the rent may not significantly exceed the local comparative rent.

A graduated rent is a form of rent increase whereby a future, regular rent adjustment is agreed in advance. The advantages are:

Landlords have less administrative work and rent increases are easy to implement.
Tenants know in advance what to expect.

However, there is also a disadvantage for tenants:

If there is no rent control in the area, tenants may find that the graduated rent rises above the local comparative rent.

Here, too, there must be at least one year between individual price adjustments.

Renovation is often expensive, but can be worthwhile when selling the property due to a higher purchase price. It depends on the individual case and should be assessed in advance by a professional.

What is better: renovation or sale for DIY enthusiasts?

What is better: sell discreetly or tell everyone about it?

Anyone who wants to sell discreetly has good reasons for doing so and needs a proven strategy. Telling everyone about it does not always enhance the attractiveness of the property.

Too expensive, too cheap? The rent index provides information

The rent index is an important means of justification for determining the permissible rent, both for rent increases and for new leases. A rent index reflects the development of rents over the past six years.

Anyone looking at a rent index for the first time can quickly feel overwhelmed by the sheer number of tables and appendices.

However, all rent indexes basically work according to similar principles. We would be happy to show you how and advise you on all matters relating to this topic.

Benefit from over 20 years of experience and save a lot of time. Don't lose track of things, never miss a deadline again, and receive regular updates on legal requirements. Leave the work to a professional and sit back and relax. We look forward to getting to know you.

Contact details

*Required fields

New form

Our specialists will be happy to advise you on this topic

Professional portrait of a Garcia employee.

Riccardo Giamporcaro

Real estate consultant for residential properties

0 27 22 - 93 720

Sustainability in the real estate sector: support programs and benefits for owners

Sustainability is no longer just a buzzword, but plays a central role in the real estate sector. Owners who focus on energy-efficient construction, resource-saving modernization, or sustainable management of their properties today benefit in several ways: through government subsidy programs, long-term cost savings, and a significant increase in the value of their property. In the Olpe district and neighboring regions in particular, the requirements for sustainable standards are rising—and with them the demand for modern, future-proof properties. Whether KfW promotional loans for energy-efficient renovation, subsidies for photovoltaic systems, or special incentives from the federal states: it is worthwhile for owners to invest specifically in sustainable measures. In addition to reducing ongoing operating costs, such investments significantly increase the attractiveness of properties for buyers and tenants. Better rentability, higher return prospects, and a greater sense of security with regard to upcoming legal regulations are convincing arguments for more sustainability in real estate portfolios. Those who look into funding opportunities and sustainable concepts early on create real added value for themselves and future generations.

Home trends for 2025: Which features are particularly sought after in Attendorn?

What will make living in Attendorn particularly attractive in 2025? At a time when demands on owner-occupied homes and rental apartments are constantly rising, innovative features are becoming the focus of buyers and tenants alike. The local real estate market clearly shows that quality, energy efficiency, and technical sophistication have long been among the most important criteria when choosing a place to live. Not only are sustainable energy concepts such as heat pumps, photovoltaic systems, and modern insulation in demand, but also smart home technology, flexible room solutions, and high-quality bathrooms. In Attendorn in particular, trends are emerging that offer long-lasting living comfort and flexibility in everyday life. Living spaces that create a feeling of freedom with well-thought-out lighting concepts, floor-to-ceiling windows, and spacious balconies are just as popular as practical features such as charging stations for electric vehicles, accessibility, and individual design options. such as charging facilities for electric vehicles, accessibility, and individual design options. This combination of forward-looking and practical features makes real estate in Attendorn particularly attractive not only for owner-occupiers but also for investors. For owners who want to sell or rent out their properties, these developments offer valuable guidance on how to optimally tailor their properties to the needs of the market in 2025.

Barrier-free living: demand and implementation options in Olpe and the surrounding area

Barrier-free living is no longer a niche topic—demand is growing rapidly in Olpe and the surrounding region. More and more property owners and house hunters are recognizing the value of living space that is free of structural barriers and offers comfort for all generations. The focus is not only on seniors and people with physical limitations, but also on families who value flexible and future-proof living concepts. The growing demand for barrier-free real estate ensures that such properties are specifically sought after and carefully planned. Modern barrier-free apartments impress with wide passageways, level access, threshold-free bathrooms, and intelligent details that make everyday life noticeably easier. In Olpe, more and more builders, investors, and owners are focusing on high-quality fittings and innovative concepts in order to remain attractive in the long term and increase the value of their properties. Those who opt for barrier-free design early on not only secure a larger pool of interested buyers, but also invest in comfort and quality of life for the future. Especially in view of demographic change and new lifestyles, this is a decisive competitive advantage in the region's real estate market.

Real estate investment in 2025: opportunities and risks at a glance

The real estate market in 2025 offers both experienced investors and newcomers fascinating opportunities to diversify their investment strategies and enjoy sustainable returns. However, as in any area of investment, there are challenges that need to be overcome. In view of current economic developments and inflation, it is important to select the right properties with a clear focus and sound analysis. One key to success lies in close market observation and the identification of up-and-coming regions. Experts emphasize that interesting return opportunities exist particularly in urban areas with growing populations and increasing demand for residential and commercial space. However, potential risks, such as changing interest rate environments and regulatory uncertainties, should always be taken into account. Forward-looking planning and strategic alignment are therefore essential in order to fully exploit the advantages while avoiding potential pitfalls.

The role of the real estate agent in the modern real estate market: A guide

Real estate agents play a key role in the modern real estate market, combining expertise with interpersonal communication skills. When you decide to buy or sell a home, the support of an experienced agent can make the difference between a successful and a discouraging process. Not only do they know the market and help you find the right price, they also offer emotional support and legal security. A good real estate agent not only has extensive knowledge of local market trends, but also has a wide network of contacts ranging from tradespeople to financial advisors. Garcia & Co Immobilien GmbH places particular emphasis on strategic advice and individual support to ensure that every real estate transaction is a tailor-made success. Trust, transparency, and commitment make all the difference. Make your next real estate purchase or sale stress-free, efficient, and profitable by relying on the expertise of a professional real estate agent.

Current trends in the real estate market in 2025: What buyers and sellers should know

The real estate market in 2025 is facing dynamic changes that will have a significant impact on both buyers and sellers. One key trend is the increased use of digitalization in real estate, from virtual viewings to data-based price analyses. These technologies enable potential buyers to make informed decisions and offer sellers forward-looking marketing strategies. Demand for environmentally friendly and energy-efficient properties is also growing rapidly. Modern buyers value low emissions and sustainable construction, which has a significant impact on property values. Another trend is the urbanization of smaller cities, as more and more people are moving from large cities to smaller communities to benefit from a higher quality of life and lower prices. This development opens up opportunities for sellers who invest early in up-and-coming regions. At the same time, this means that buyers should consider more options outside the traditional "hotspots" in major cities. In summary, knowledge of these trends and their implications for the buying and selling process can have a decisive impact. It is now more important than ever for buyers and sellers to closely monitor the market and position themselves accordingly.