What to buy first in Germany: your own home or an investment property?
This is not an easy question. This calculator is the first of its kind and provides you with clear estimates of the options you have.Updated on 24 June 2025
Investment properties have become very attractive. A key question arises: does acquiring an investment property enhance or hinder your capacity to secure your ideal dream home? This means you need to think about whether it's better to focus on getting your own home ready or to use an investment property as the first step in your real estate portfolio.
Let's calculate what to buy first in Germany
Your current affordability of an investment home as your first property:
Today, you can afford a home of 384.615 € | In 1 year, you can afford a home of 430.769 € | In 2 years, you can afford a home of 476.923 € |
Current Indicative Interest Rates:
100% loan-to-value: 3,71 %
95% loan-to-value: 3,68 %
90% loan-to-value: 3,23 %
Calculate your mortgage options
Use Hypofriend’s mortgage calculator to calculate your mortgage options in Germany.
Scenario 1: Invest home before own home
In Figure 1, you can see how much of an own home you can afford after your buy an investment property of 300.000 €. Note if this is a double depreciation investment property. You can see that this affordability increases over time because your income grows and your savings accumulate. Choosing a high depreciation property also accelerates how quickly you can afford an expensive own home.
Figure 1: Own home as a second property maximum affordability
Buying an investment home initially reduces your savings as it requires a down payment. In addition, when considering a loan for your own home, the banks will typically only count 50-70 % of your rental income from your rental property. Banks will also not consider the money you get back from the tax office as income.
In Figure 2, you see whether it is your savings or your income that is the binding constraint and drives the maximum own home affordability you see in Figure 1. This means you can see the impact of your income growth and the impact of your savings behavior on the amount of own home you can afford. You can now go back to the assumptions you input above to see if you could save more or get money from parents, for example, and how that affects your affordability. Similarly, you can see the impact of income growth on your affordability.
And, perhaps most importantly: you can adjust the value of your investment income to the point where you are happy with the own home you can afford at the time horizon you like !
Figure 2: Maximum affordability breakdown
Scenario 2: Own home before Invest home
Now let us turn the sequence around. You first buy your own home before you buy a second home. In Figure 3, you can see how much of an investment home you can afford after your buy an own home of 300.000 €. Consider you buy this home with a loan to value ratio of 95 %. You can see that your invest home affordability increases over time because your income grows and your savings accumulate.
Figure 3: Investment home as a second property maximum affordability
Buying an own home initially reduces your savings as it requires a down payment. Most interestingly though, banks often do not consider your mortgage payments when looking at the income you need for an investment property. They calculate that your mortgage payments replace your rental income. [missing elements in. logic]]
In Figure 4, you see the impact of your income and the impact of your savings behavior on the amount of investment home you can afford, broken down. You can go back to the assumptions and for example change the down payment for your own home. You can see that the higher the down payment the tighter the savings constraint is.
Figure 4: Maximum affordability breakdown
General guidance
If you buy an investment property with a high depreciation rate, then your savings recover very quickly, and after a few years, your savings are back on track and hence don't reduce how much own home you can afford. See investment properties that are optimized for tax refunds.
If, on the other hand, you first buy your own home, you will not be able to recoup your down payment. So if you do not have a lot of savings, then it will take a relatively long time till you can afford an investment property. So, if you don't have a lot of savings, you are better off buying an investment property first.
High income | Lower income | |
|---|---|---|
High savings | Own home first | |
Lower savings | Invest property first |
If your income is lower and is your main constraint to afford the house you like, you are better off buying your own home first. The reason for this is that banks don't count all the rental income or tax credits. This means that if you buy an investment property, you will have less money to spend on your own home.
Of course, it all depends on your precise situation. If you live comfortably in a low-rent apartment, then you can easily wait to buy your own home, and you should definitely consider buying an investment property first. If you live in an area with quickly rising home prices, you may need to buy your own home property there first. You can always find an investment property elsewhere within your price range.