Real estate knowledge

Discover valuable real estate knowledge for your success in the real estate industry.

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Additional Costs

Additional costs in real estate refer to extra expenses beyond the rent or purchase price. They include heating costs, water and wastewater charges, property tax, insurance, and other items. The amount varies depending on the property.

Building Permit

A building permit is an official permission to start a construction project. It confirms that the project complies with all legal requirements. Construction work is generally not allowed without a building permit, and failure to obtain one can result in legal consequences.

Care Facilities

Care facilities are specialized establishments for elderly or dependent individuals. They offer investors the opportunity to invest in the growing care market and achieve stable returns. The rental is often provided to operators, ensuring long-term rental income.

Certificate of Completion

A Certificate of Completion confirms that a particular property, such as an apartment building or condominium, has been divided into individual self-contained units. This document is essential for the sale or rental of residential or commercial units as it serves as the legal basis for the independent use of each unit.

Certificate of No Encumbrances (Clearance Certificate)

A certificate of no encumbrances in real estate confirms that there are no outstanding tax or duty debts for the specific property. It is issued by the authorities and serves as proof of the property’s financial freedom. It is often required in real estate transactions.


Co-ownership denotes the ownership of a share in a property by multiple individuals. It is a form of ownership where several people jointly own a property. Each co-owner has a specific share in the property and can either use or rent out their share. Co-ownership is commonly applied in condominium ownership, where each unit owner possesses a share of the entire residential complex.

COA Management

COA management handles the administrative tasks of a Condominium Owners’ Association (COA). These tasks include accounting, maintenance, and communication with the owners, ensuring smooth operations within the COA.

Common Property

Common property in real estate includes parts and facilities that are jointly used by multiple owners. These may include the staircase, garden, and technical installations. The management is carried out by an owners’ association or a property manager.

Condominium Owners' Association (COA)

A Condominium Owners’ Association (COA) is a community of owners in a property that manages communal affairs. Each owner possesses a unit and is a member of the COA. Decisions are made in owners’ meetings.


A conveyance represents the final step in the purchase or transfer process of a property. It is a crucial part of the transfer of ownership and ensures that the change of ownership is legally secured. Through the conveyance, ownership of the property is effectively transferred to the buyer, making them the new owner. This legal step safeguards the transfer of ownership from any third-party claims.

Debt Capital

Debt capital in real estate refers to borrowed money for property purchase or construction. It enables access to additional financial resources from external creditors such as banks. Unlike equity capital, debt capital must be repaid with interest.

Declaration of Division (Deed of Partition)

A declaration of division regulates the division of a property into co-ownership units. It describes the individual units, co-ownership shares, and usage rights. The declaration of division forms the legal basis for ownership and the rights of the owners.


Depreciation is a tax term that considers the decline in value of a property over time. In the context of real estate, depreciation is applied to the value of the building, as buildings naturally depreciate and deteriorate over time. This depreciation reduces the taxable profit and, in turn, lowers the owner’s tax burden.

Development Costs

Development costs in real estate encompass the expenses associated with creating or renewing infrastructure facilities and utilities to prepare the land for construction. This includes roads, sewage systems, water, and electricity supply. Typically, these costs are borne by the property owners or developers.


An easement in real estate is a limited real property right that grants a third party specific usage or access rights to a piece of land. This can include rights of way, the installation of pipelines, access to light and air, or passage. Easements are recorded in the land registry and serve to ensure certain uses.

Effective Interest Rate

The effective interest rate is the actual total cost percentage of a loan or credit agreement, taking into account all associated fees, interest, and costs. Unlike the nominal interest rate, the effective interest rate includes all relevant cost factors and allows the borrower to compare the total costs of the loan.


Encumbrances are burdens that affect a property and can impact its owner, such as mortgages, liens, or easements. These rights or obligations of third parties have implications for the use or sale of the property.

Energy Performance Certificate

An energy performance certificate is a document that provides information about the energy efficiency of a property. It indicates energy consumption and potential savings. The energy performance certificate helps potential buyers or tenants assess the energy efficiency of a property. There are demand-based and consumption-based energy performance certificates.


Equity in real estate refers to the amount a buyer contributes to finance a property, minus the borrowed capital obtained through a loan. It is the money that the buyer already possesses and uses for the purchase of the property to secure their share of ownership. A higher equity percentage can lead to more favorable loan terms and overall stability in property financing.

Exclusive Use Right (Limited Common Property)

The exclusive use right in real estate allows an owner to exclusively use a specific part of common property or land. It is established in the declaration of division or a limited use agreement and applies to areas like terraces, parking spaces, or gardens.


Real estate financing involves procuring funds for the purchase or construction of a property. This can be achieved through bank loans, mortgages, or other forms of external financing. The goal is to cover a significant portion of the costs through the loan and finance the remainder with equity capital. Financing allows buyers to repay the purchase price over an extended period.

Floor Plan

A floor plan is a scaled representation of the layout of a property, showing the arrangement and dimensions of rooms, as well as doors, windows, and other elements. It serves as a planning and orientation aid for renting, selling, or renovating the property, providing potential buyers or tenants with insight into the spatial design.

Ground Lease

Ground lease is a form of land tenure where a leaseholder obtains the right to use a piece of land long-term without owning it. In return, the leaseholder pays regular rent to the landowner.

Heritage Properties

A heritage property is a real estate property that is protected due to its historical, cultural, or architectural value. Heritage properties can include historical castles, churches, mansions, timber-framed houses, or industrial monuments. Additionally, heritage properties offer tax advantages, which can reduce the financial burden and increase the investment’s profitability.

Home Saving Contract

A home savings contract allows individuals to save money regularly with the aim of obtaining a home savings loan in the future. However, home savings contracts typically offer low interest rates, have long terms, and may involve fees. It is essential to carefully consider the advantages and disadvantages before committing to a home savings contract and to consider other secure forms of investment, such as real estate.

Homeowners' Meeting

A homeowners’ meeting in real estate is a gathering of all the owners of a condominium property to make important decisions. Topics such as management, maintenance, finances, and other matters are discussed, and resolutions are passed. Each owner has the right to participate and have a say.


Inflation in real estate refers to the increase in general prices of goods and services over time. When inflation rises, real estate prices typically increase as well. This can lead to an appreciation in the value of real estate, which can be advantageous for property owners. However, it may also result in higher costs for acquiring and maintaining properties, posing a challenge.


Interest refers to fees paid for the use of borrowed money or capital. It represents the cost of borrowing money and is typically calculated as a percentage of the borrowed amount. In real estate loans, for example, the borrower pays interest to the lender to compensate for the use of the borrowed funds.

Land Register

A land register is a public register containing information about property ownership and encumbrances. It serves to document and secure rights to real estate. The land register includes entries of ownership, mortgages, land charges, and other encumbrances. It is maintained by a local court and is available to the public for inspection.

Leverage Effect

The leverage effect in real estate refers to the advantage that a buyer gains by using debt or loans. By financing a portion of the purchase price with borrowed money, the buyer can achieve a higher return if the property’s value increases. The leverage effect amplifies potential gains, but it also carries higher risk as losses can also be magnified.


A loan in the context of real estate is a financial arrangement where a bank or a lender lends money to the borrower to enable the purchase or financing of a property. The borrower commits to repay the loan with interest over an agreed period of time. This loan is often referred to as a mortgage and is used to finance the purchase of a property or to increase existing equity.

MaBV (Makler- und Bauträgerverordnung - Real Estate Agents and Property Developers Regulation)

MaBV stands for Real Estate Agents and Property Developers Regulation, which governs the rights and obligations of real estate agents and property developers in connection with the sale of properties. It serves to protect buyers and establishes transparency and information requirements, among other provisions.


Micro-living is a real estate concept featuring small but functional apartments. It targets singles, students, and young professionals seeking affordable and practical living solutions. The advantages lie in efficient use of space, lower rental costs, and central locations in the city.

Mortgage Lien

A mortgage lien is a security interest granted to a bank in real estate financing. It secures the bank’s claim and allows it to sell the property if the debtor fails to meet their payment obligations.

New-Build Property

New-build properties are real estate that has just been constructed or is still under construction. They are characterized by modern construction, contemporary amenities, and the latest technical standards. New-build properties offer the advantage of first-time occupancy and often meet high energy efficiency requirements.

Nominal Interest Rate

A nominal interest rate is the interest rate applied to a loan or financing. It indicates the interest rate that the borrower must pay to the bank for using the credit. The nominal interest rate is typically expressed as an annual percentage.


A notary is an independent and neutral legal expert who creates and certifies public deeds. In the context of real estate, the notary is responsible for notarizing and handling property purchase contracts. The notary ensures legal security and facilitates the legally valid transfer of property ownership.

Notary Escrow Account

A notary escrow account is a trust account managed by a notary. It serves for the secure custody and settlement of payments in real estate transactions. The notary oversees the correct use of the funds and ensures that they are released only after fulfilling certain conditions. This ensures a secure process for the property purchase.

Outstanding Balance

The outstanding balance in real estate refers to the remaining amount of a loan or mortgage after deducting all previous repayments and interest payments. It is the amount that the borrower still owes to the bank to fully repay the loan. The outstanding balance can decrease over time through repayments or change due to interest and any additional repayments.


Ownership in real estate refers to the legal right to possess, use, manage, and dispose of a property. It includes the unrestricted right of use and control over the property. Ownership grants the owner specific rights and responsibilities, such as the ability to sell, rent, or mortgage the property.


Owner-occupancy in real estate means that the property owner resides in or uses the property for their own purposes. It refers to the personal use of the property by the owner or their family. In contrast to renting, where the property is leased to third parties, owner-occupancy is intended to cover the owner’s residential needs and create a home.

Priority in Land Register

The priority in the land register indicates the sequence in which various rights and encumbrances are entered on a property. Depending on the ranking, certain entries take precedence over others. For example, a first-ranking mortgage has priority over a second-ranking mortgage. The priority in the land register is important to determine the priority and validity of registered rights and encumbrances.

Property Developer

A property developer is a company or individual specializing in the development and realization of construction projects. The developer typically takes charge of planning, constructing, and selling real estate projects. They act as both the builder and seller and are responsible for the entire construction project.

Property Manager

A property manager is responsible for managing and administering a property on behalf of the owner. Their tasks include tenant management, maintenance, accounting, and communication with tenants. They ensure smooth operations and represent the interests of the property owner.

Property Tax

Property tax is a tax levied on property owners. It is based on the assessed value of the property and is determined by municipalities. The amount of property tax is determined by the tax base amount and the tax rate. It serves to finance the public expenses of the community.

Real Estate Transfer Tax

Real estate transfer tax is a tax incurred when acquiring land or property. It is typically paid by the buyer and is based on the purchase price of the property. The exact amount of real estate transfer tax varies depending on the federal state in Germany. It is a one-time payment made to the relevant tax office, which increases the overall cost of acquiring real estate.

Release Pledge

A release pledge in real estate is a contractual agreement between the seller and buyer in which the seller assures that the property will be transferred free of encumbrances. It provides legal security to the buyer and protects them from potential disadvantages caused by existing encumbrances.

Reminder of Payment Due

A payment due notice for real estate is a written notification that informs the owner or tenant that a payment is due. It includes information such as the payment amount, due date, and payment details. The purpose of the payment due notice is to remind the recipient in a timely manner of the upcoming payment and ensure that the payment is made on time.


Repayment refers to the gradual repayment of a loan or debt over a specific period. In real estate financing, this means the gradual reduction of the borrowed amount through regular installment payments. Repayment rates can vary and impact the loan’s repayment period and total costs.

Reserve Funds for Maintenance

Reserve funds for maintenance are funds set aside by property owners to cover future repair costs. They ensure the long-term preservation of the property’s value and are managed by the property management.

Return on Equity

The return on equity in real estate measures the percentage profit on the invested equity. It demonstrates the efficiency of capital utilization and influences the investment’s profitability. A high return on equity indicates a good return and supports the decision to invest in real estate.

Return on Equity = (Annual Net Income / Equity) * 100

Return on Investment (ROI)

The return on investment (ROI) in real estate is a measure of the profitability of an investment. It indicates how much profit an investor makes in relation to the capital invested. The ROI is expressed as a percentage and is calculated by dividing the profit by the investment cost. A higher ROI indicates higher profitability of the real estate investment.


A self-disclosure in real estate purchasing is a form where potential buyers provide information about their financial situation. It serves to give the seller or real estate agent an assessment of the buyer’s creditworthiness.

Side Agreements

Side agreements in real estate are additional provisions that go beyond the main contract. They complement or expand on existing agreements and may include specific details or deviations. They serve to consider and contractually document individual needs and agreements between the parties.

Special Repayment (Extra Repayment)

A special repayment is an additional payment made by a borrower, in addition to regular loan installments, to repay a loan early. This allows for a faster reduction of the outstanding debt and leads to a shortened loan term. Special repayments can be either one-time or agreed upon regularly in the loan contract, offering the advantage of reducing interest payments and overall interest costs.

Student Housing

Student housing refers to specialized accommodations for students, offering affordable living spaces near universities. It includes dormitories, apartments, and shared living arrangements tailored to the needs of students, providing a communal student life and easy access to the campus.

Unit Ownership (Condominium Ownership)

Unit ownership in real estate refers to the portion of a property that belongs to a specific owner, such as an individual apartment or commercial unit within a building. The owner has the right to dispose of and care for this portion.