Glossary
Kaufpreisfaktor
Kaufpreisfaktor: Kaufpreisfaktor (German for purchase price multiple, also called Vervielfältiger) is the price-to-rent ratio: the number of annual net cold rents it takes to cover a property's purchase price. It is the inverse of the gross rental yield, so the lower the factor, the better the ratio of purchase price to rental income.
What is the Kaufpreisfaktor (purchase price multiple)?
The Kaufpreisfaktor (German for purchase price multiple, also known in the trade as the Vervielfältiger or Ertragsfaktor) is a core metric for valuing investment property in Germany. It tells you how many years of annual net cold rent (Jahresnettokaltmiete) a buyer pays for the property. A Kaufpreisfaktor of 25 means the purchase price equals 25 years of net cold rent.
Mathematically, the Kaufpreisfaktor is the inverse of the gross rental yield (Bruttomietrendite). At a factor of 20, the gross yield is exactly 5% (1 ÷ 20 × 100). At 25, it is 4%. The lower the Kaufpreisfaktor, the higher the calculated rental yield and the faster the rental income pays the investment back.
Professional investors use the Kaufpreisfaktor as a first quick filter to sort German property listings before running a detailed profitability analysis. The figure does not replace a full return calculation, but it gives a solid first read on the price-to-rent ratio in seconds.
How to calculate the Kaufpreisfaktor: example
Formula: Kaufpreisfaktor = purchase price ÷ annual net cold rent
Example: A condominium is listed for €300,000. The monthly net cold rent is €1,100.
Annual net cold rent: €1,100 × 12 = €13,200 Kaufpreisfaktor: €300,000 ÷ €13,200 = 22.7
Gross rental yield (inverse): 1 ÷ 22.7 × 100 = 4.4%
The table below shows typical purchase price multiples for different location types in Germany (as of 2025/2026):
| Location type | Kaufpreisfaktor | Gross rental yield | Assessment |
|---|---|---|---|
| Rural regions | 12 to 18 | 5.6 to 8.3% | Cheap, but higher vacancy risk |
| B/C cities (e.g. Leipzig, Kassel) | 18 to 22 | 4.5 to 5.6% | Good price-to-rent ratio |
| Large university cities (e.g. Cologne, Stuttgart) | 22 to 29 | 3.5 to 4.5% | Fair, stable demand |
| Top-7 metros (e.g. Munich, Hamburg) | 29 to 33 | 3.0 to 3.5% | Expensive, but high value stability |
After peaking in 2021/2022 (over 40 in parts of Munich), purchase price multiples in German metros have fallen sharply since the 2022 interest-rate turn (Zinswende). They have stabilised at the current level since 2024, helped by rising rents alongside more moderate purchase prices.
Good to know
- Only a gross metric: The Kaufpreisfaktor accounts for no closing costs, maintenance reserves or management costs. For a more realistic assessment, also calculate the net rental yield (Nettomietrendite).
- Regional comparison is decisive: A factor seen as overpriced in a small town can be standard in a metro. Always judge the Kaufpreisfaktor in the context of the local market.
- Do not view it in isolation: A strikingly low Kaufpreisfaktor can signal deferred renovation (Sanierungsstau), a difficult tenant structure or a declining location. The figure replaces neither a property viewing nor a location analysis.
- Check the rent potential: What matters is not only the current rent but also the scope for rent increases. A flat at factor 28 that is let well below market rent can reach an effectively lower factor once the rent is adjusted.
Legal basis
The Kaufpreisfaktor is not a legally defined figure but a valuation benchmark used across the German property industry. Within the income approach (Ertragswertverfahren) under sections 17 to 20 of the Immobilienwertermittlungsverordnung (ImmoWertV, the German property valuation ordinance), the Vervielfältiger plays a central role (there as the present-value factor of net income, the Barwertfaktor des Reinertrags). The official valuation committees (Gutachterausschüsse) publish property interest rates (Liegenschaftszinssätze) used to derive the multiple in the income approach. For the collection of purchase prices and market analysis, section 193 of the Baugesetzbuch (BauGB, the German Building Code) sets out the responsibility of the valuation committees.
Frequently asked questions
Kaufpreisfaktor is German for purchase price multiple, also called the Vervielfältiger. It tells you how many years of annual net cold rent (Jahresnettokaltmiete) the purchase price equals, which makes it the property's price-to-rent ratio. A factor of 25 means the purchase price equals 25 years of net cold rent.
As a rule of thumb, a Kaufpreisfaktor under 20 points to a favourable price-to-rent ratio and is found more often in B and C cities. Values between 20 and 25 are seen as market-standard and fair. From a factor of 25 upwards, buyers pay relatively a lot of purchase price per euro of rental income, which is typical in metros like Munich, Hamburg or Berlin. The regional comparison is always decisive, because a factor of 28 can be perfectly appropriate in a prime location if value growth and rent-increase potential are there.
The Kaufpreisfaktor and the gross rental yield (Bruttomietrendite) describe the same relationship from different angles. The Kaufpreisfaktor expresses how many annual net cold rents the purchase price equals (purchase price divided by annual net cold rent). The gross rental yield is its inverse, given as a percentage: (annual net cold rent divided by purchase price) times 100. So a Kaufpreisfaktor of 25 corresponds exactly to a gross rental yield of 4%, and a factor of 20 to a yield of 5%.
The Kaufpreisfaktor is a gross metric and includes neither closing costs (Grunderwerbsteuer, notary, agent) nor ongoing non-apportionable running costs (maintenance, administration, rent-default risk). For a realistic assessment you should also calculate the net rental yield (Nettomietrendite), which accounts for these costs. Financing costs such as interest and repayment do not feed into the Kaufpreisfaktor either.