Is investment property in Germany worthwhile for expats?

A rental property in Germany combines several mechanics that interact: rental income, depreciation (Abschreibung), the deductibility of mortgage interest, leverage through the loan itself, and price appreciation over very long horizons. The numbers can look genuinely attractive — especially when depreciation reduces taxable rental income and the bank is financing most of the purchase price.

Those same mechanics also make investment property unforgiving when the assumptions miss. Vacancy periods, repair backlogs, problem tenants, falling local prices, or interest rate rises at the time of refinancing can each turn a "calculated 4% return" into a real loss surprisingly quickly.

For expats specifically, there are two extra layers to think through. The first is the practical question of managing the property from abroad if you eventually leave Germany — agencies exist for this, but they add cost and friction. The second is the German tax filing required every year while you own the property, which is a real recurring overhead.

Many of the best outcomes come from people who planned for at least 10–15 years of ownership, bought meaningfully below their absolute affordability ceiling, and treated the property as an active commitment rather than passive income.

For expats with uncertain residence plans, a diversified ETF portfolio is usually a better fit than a single concentrated property bet — same long-term wealth-building logic, much less to manage if life moves elsewhere.