***Investment property with tax leverage

Key facts

Purchase price & costs

About this house

A Wilhelminian-era gem including conversion (four of ten apartments) in 1974! With ten fully let units, a long-standing commercial anchor tenant and an exceptional tax position — this property offers the experienced investor far more than stable rental income.

The property is fully let — all ten units are occupied, with zero vacancy. The tenant structure combines a strong commercial anchor tenant on the ground floor with nine residential units on the upper floors, thus offering the ideal combination of stable returns and broad risk diversification.

The centerpiece of the rental structure is West-Apotheke on the ground floor — a systemically important, economy-independent tenant with a commercial lease since September 2014. Pharmacies are among the most resilient commercial tenants of all: Strict regulation of the pharmacy market protects against displacement competition, while their local supply function permanently binds the location to the tenant.

The residential units are predominantly occupied on a long-term basis — several tenancies have remained stable for years, while the more recent lettings from 2024 and 2025 show that demand for the property remains strong and new lettings are achieved quickly.

The annual net cold rent amounts to €82,680 — a reliable basis resting on a diversified tenant mix of a stable commercial anchor tenant and nine residential households. Rent default risks are structurally minimized: No individual residential tenant accounts for more than 12% of total income.

The hidden reserve: shortened useful life pursuant to Section 7 (4) sentence 2 EStG
What distinguishes this property from an ordinary rental apartment building lies not only in the rental income — but in a tax position that creates significant added value for high-earning investors: An independent expert opinion by an assessor certified pursuant to IQ-ZERT DIN EN ISO/IEC 17024 legally establishes an actually shorter useful life of 18 years.

This means: Instead of the statutory standardized depreciation of 2% per year, the purchaser can claim 1/18 of the building value annually for tax purposes — a depreciation rate of 5.56%. This is 2.8 times the standard depreciation. With a purchase price of €1,370,000 and a building share of 80%, this results in a depreciation basis of €1,096,000 — and annual depreciation of approximately €60,889.

What remains after taxes? The figures speak for themselves.
The following calculation example is based on a Purchase price of €1,370,000, financing consisting of 90% debt capital at 4.5% interest p.a., and a personal marginal tax rate of 35%. The building portion is assumed at 80%, the land portion at 20%.

Taxable income from V & V — annual calculation
Annual net cold rent (income)
+ €82,680
Building depreciation (1/18 × €1,096,000)
− €60,889
Interest on debt capital (4.5% × €1,233,000)
− €55,485
Non-recoverable operating costs (~20%)
− €16,536
Tax loss from V & V
− €50,230
This loss can be fully offset against other positive income (e.g. salary, business income). With a marginal tax rate of 35%, this results in an annual tax refund of approximately €17,581 — solely from offsetting the loss. Compared with the statutory 2% depreciation, the annual tax benefit of the shortened useful life is €13,639 higher per year.

Actual cash flow — what the investor retains
Annual net cold rent (income)
+ €82,680
Interest payments on debt capital
− €55,485
Operating costs (~20%)
− €16,536
Maintenance reserve (~€10/m²)
− €9,400
Actual income tax (loss offset)
€0
Tax refund from loss offset (35%)
+ €17,581
Effective total cash flow after taxes
+ €18,840 / year
On the equity capital invested of €137,000, this results in an equity return of 13.7% p.a. after taxes — supported by actual rental income, tax leverage and a solid tenant structure. Over the entire depreciation period of 18 years, the tax benefit of the shortened useful life accumulates to approximately €245,000.

Four apartments have been completely renovated in recent years. Further modernization measures have been carried out continuously.

Conclusion: Overall, this is a well-conceived income-generating property with a clear profile: historic charm, economic stability and a tax advantage that makes the difference. An opportunity for investors who focus not only on security but also on intelligent return optimization.

Location