Apartment Buildings as an Investment in Upper Franconia
In Upper Franconia (Oberfranken), apartment buildings (Mehrfamilienhäuser) offer the best balance of yield, control and diversification. With entry prices from €200,000 and gross yields of 5.5–7.5%, they are particularly attractive for experienced investors.
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Currently for sale: See 2 investment properties from €100,000
Key points at a glance
- Apartment buildings in Upper Franconia offer gross yields of around 4.5 to 8% – depending on location and condition.
- Several rental units spread the vacancy risk, and there is no dependence on an owners' association.
- The biggest cost risks lie in the roof, heating, windows and pipes.
- Tenancy agreements, rent arrears and service charge statements should be checked before buying.
- Many apartment buildings in the region are sold discreetly to registered investors.
Prices and Yields by Location
| Location | Apartment building with 3–5 units (price range) | Avg. gross yield |
|---|---|---|
| Hof | €200,000–450,000 | 6.0–7.5% |
| Bayreuth | €350,000–700,000 | 4.5–5.5% |
| Kulmbach | €220,000–400,000 | 5.5–7.0% |
| Coburg | €280,000–550,000 | 5.0–6.0% |
| Marktredwitz | €150,000–350,000 | 6.5–8.0% |
Advantages over Investing in Individual Flats
No dependence on an owners' association (WEG): You alone decide on renovations, management and rent setting.
Diversification within the property: If one unit becomes vacant, the others continue to generate income.
Economies of scale: Management and maintenance costs per unit are lower than for individual flats.
What You Should Look Out For
Condition of the building services: Heating, electrics, roof and façade are the largest cost blocks. Have their age and condition checked by a surveyor before buying.
Check the tenancy agreements: Current rents compared with the local comparative rent. Clauses in the tenancy agreements. Notice periods. Rent arrears.
Maintenance history: What measures have been carried out in the last 10–15 years? What is coming up?
Management: Who manages the property? Self-management or a professional property manager? The costs are approx. €25–40 per unit per month.
→ Investment guide | Investor matching
Example Calculation: Apartment Building in Coburg
Six flats, built 1965, windows and heating renewed in 2012, 410 m² living area, purchase price €495,000.
| Indicator | Value |
|---|---|
| Net cold rent per year (410 m² × €7.40 × 12) | €36,408 |
| Gross rental yield | 7.4% |
| Purchase price multiplier | 13.6 |
| Operating costs (management, maintenance, rent loss, approx. 25%) | – €9,100 |
| Net operating income | €27,308 |
| Net rental yield on total investment (approx. €540,000) | 5.1% |
How financing and tax change these figures is shown in the guide Calculating rental yield.
Due Diligence: The Checklist
| Area | What we check |
|---|---|
| Rents | Tenant list, contractual rents, rent arrears, last increases, comparative rent |
| Contracts | Terms, graduated or index-linked rents, special arrangements, deposits |
| Service charges | Statements for the last two years, allocation keys, outstanding back payments |
| Technical | Age of roof, heating, windows, electrics, pipes; maintenance records |
| Energy | Energy performance certificate, obligations under the GEG, CO₂ cost sharing |
| Legal | Land register, building permits, social housing restrictions (Wohnungsbindung), monument protection |
| Location | Population trend, employers, infrastructure, vacancy in the area |
Increasing Value Through Targeted Measures
Many apartment buildings in Upper Franconia offer potential that the previous owner did not use:
- Bring rents gradually up to the comparative rent – legally sound and with a sense of proportion. → Rent increases
- Eliminate vacancies through renovation and good marketing. → Finding tenants
- Carry out energy-efficient renovation with subsidies – reduces service charges and the landlord's share of CO₂ costs. → Energy-efficient renovation
- Convert the loft or create parking spaces where building law allows.
- Check splitting into individual flats – with an eye to pre-emption rights and blocking periods. → Pre-emption rights
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Frequently asked questions
How much equity do I need for an apartment building?
Banks usually require at least the incidental purchase costs and 10 to 30% of the purchase price. With good creditworthiness and a solid rental situation, higher loan-to-value ratios are possible.
Can I manage an apartment building myself?
With a few units nearby, yes. From around six flats or at a greater distance, a rental management service is worthwhile; it costs around €25 to €40 per flat per month.
What happens to existing tenancy agreements when I buy?
They transfer unchanged to the buyer, as do the deposits. The buyer becomes the landlord upon registration in the land register (Grundbuch).
Where are apartment buildings most profitable in Upper Franconia?
In medium-sized towns such as Hof, Kulmbach, Marktredwitz or Selb the yields are higher, while in Bamberg and Bayreuth the risks are lower. More on this in the Upper Franconia market report.
Sources & further reading
- gesetze-im-internet.de – Building Energy Act – requirements for heating and insulation
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