Furnished or unfurnished – does renting out furnished really pay off? A 2025/26 reality check

At first glance, furnished letting sounds attractive: higher rent, shorter ties, no quarrels about the paintwork. In practice the extra revenue stands against a list of costs – depreciation, tenant turnover, vacancy, maintenance – and against a legally tricky rent cap. This guide redoes the maths and shows when "furnished" actually pays off.

If you want a quick feel for your own case, jump straight to the calculator. The rest of the article explains how it works and what assumptions sit behind it.

Furnished, part‑furnished or short‑stay – what means what?#

Before any numbers make sense, the terms need to be straight. Tenancies and listings use three categories that are legally and financially very different:

• Part‑furnished means: some pieces or a built‑in kitchen stay in the apartment, the tenant brings the rest. Classic: kitchen only, or kitchen plus fitted wardrobes. The furniture premium is correspondingly modest – often only the Furniture depreciation (AfA) of the existing items plus a small surcharge.
• Fully furnished means move‑in ready: bed, sofa, dining table, wardrobes, lighting, kitchen with appliances. The tenant moves in with a suitcase. This is the category referenced when market data talks about "furnished".
• Short‑stay letting (Wohnen auf Zeit) is its own category. Furnished plus service: internet, electricity, often linen and cleaning included. Contracts are usually fixed‑term, stays last weeks to a few months. Tax and tenancy law treat this as a different planet – more in the sections on the rent cap and change‑of‑use rules.

The furniture premium – what you can realistically charge#

How high the premium can be depends on city, location and level of furnishing. The most recent large‑scale analysis comes from the IW Köln, based on around one million rental listings. For 2024 it found:

The market shares speak for themselves: in cities of 500,000 inhabitants and more, every third listing was furnished or short‑stay in 2024 – in Frankfurt around 41%. The main reason is not a boom in furnished letting but the collapse of the conventional market: between 2021 and 2025, roughly 32,000 unfurnished listings disappeared from the top‑7 cities (–23%), while furnished listings grew by only around 5,000 IW Köln, Oberst/Voigtländer: More furnished homes for good reasons (2026)Quelle.

Furnished apartments charge around 18% more on average – short‑stay lettings even a good third. The premium does not automatically cover the extra cost of furniture, turnover and service, though.

Context matters: the IW figure is the median across listing prices, not a promise for your specific case. Platform numbers like "+45% furniture premium" often mix classic furnished one‑year contracts with short‑stay offers. For a sound calculation, work with the IW figures and only apply the higher premium in genuine short‑stay constellations.

Target groups – who wants furnished and for how long#

Furnished letting works best where tenants travel light and plan medium‑term stays. Four groups shape the market:

• International professionals and expats are the most attractive group financially. People coming from abroad for a multi‑year project don't want to ship furniture, often have no German credit record and accept higher rents for immediate move‑in. Typical tenancy: 12–24 months. The underlying driver is continued skilled migration to Germany – though that doesn't translate 1:1 into "furnished demand".
• Business travellers and project staff stay three to twelve months. They expect a move‑in‑ready apartment with internet, coffee machine and iron – and they leave again without a paint argument. The highest premium per month can be reached here, but turnover is also highest.
• Students are a class of their own. They often arrive without credit history or experience of the German rental market – a furnished room is the only practical option for many. Reliable demand, but tied to the semester.
• Long‑term tenants who want to live furnished also exist – often after a separation, during a transition after selling a house, or as commuters with a main residence elsewhere. A small but stable group with no turnover cost.

The right target group decides your return calculation. Students and business travellers bring more turnover and therefore more vacancy; expats stay longer – the calculator lets you play it through.

University cities – a market of their own for furnished#

Going after students and doctoral candidates means tapping into a particularly reliable market in Germany. In the 2024/25 winter semester some 405,000 international students were enrolled at German universities – around 6% more than the year before, the highest figure to date DAAD: Record numbers of international students in Germany (2025)Quelle. This is the natural target group for furnished lettings: shipping furniture from abroad doesn't pay, first registration in Germany without a credit record is hard, and a fully equipped apartment saves time and nerves in the first weeks.

The market reflects it. According to the MLP Student Housing Report 2025 (data: IW Köln), cold rents in university towns rose by an average of 2.3% in 2025, with small apartments up to 30 m² up by 4.3% MLP Student Housing Report 2025 (2025)Quelle. Short‑stay furnished listings grew in almost every university city studied – from Munich and Heidelberg via Berlin and Hamburg to Cologne, Mannheim and Aachen. Landlords there benefit twice: a steady stream of international demand and a rent level that keeps up with the broader market.

What furnished letting really costs#

Extra income is one side of the coin. The other is the running cost and risk that any realistic model has to include:

1. 1

   Furniture investment and depreciation

   A solid complete set‑up runs between €4,000 and €12,000 depending on size. The investment does not hit your accounts as an expense immediately but is depreciated straight‑line over 13 years – as set by the Federal Finance Ministry's AfA table for generally usable assets ("AV"), item 6.15

   BMF, depreciation table for generally usable assets (2025)Quelle

   . For €6,000 in furniture that is about €462 per year deductible against rental income – tax‑efficient, but a permanent drag on the books.

2. 2

   Treat built‑in kitchens and low‑value assets separately

   Built‑in kitchens are treated as a single asset following the BFH ruling IX R 14/17 and depreciated over 10 years – sink, hob, units and appliances together

   BFH IX R 14/17 of 3 August 2016 (2018)Quelle

   . Individual items below €800 net count as low‑value assets and can be expensed immediately

   Haufe Finance Office: GWG ceiling of €800 (2024)Quelle

   . Keep individual receipts – without clean documentation, everything ends up in the 13‑year table.

3. 3

   Extra effort at handover

   Furnished means more inventory lists, damage inspections, cleaning. Per tenant change you quickly land at €300–600 in real costs – plus the hours you put in that no spreadsheet captures.

4. 4

   Vacancy between tenants

   Furnished apartments change tenants more often than unfurnished ones. Even with good re‑letting you average one to three weeks of vacancy per turnover. On a six‑month contract that is quickly 5–10% gross rent lost per year.

5. 5

   Maintenance and replacements

   Broken dishwasher, worn sofa cushions, wobbly office chair – the landlord carries the risk. Plan a realistic €20–40 per month flat rate, depending on the level of finish.

The real‑world useful life of heavily used rental furniture is often shorter – sofas and mattresses rarely last 13 years in a student flatshare. For tax purposes you can still only depreciate at the pace the table prescribes, but you may book an exceptional write‑off for documented damage.

Tax and law – the five tripwires#

Furnished letting means staying compliant in several places at once. These five topics decide whether the extra revenue holds up or has to be paid back.

1. Letting or trade (§ 21 vs. § 15 EStG)#

As long as you hand the apartment over as part of private asset management, the income falls under § 21 EStG – income from letting and leasing. That applies to classic one‑year contracts as well as furnished apartments with regularly changing tenants § 21 EStG, German Federal Ministry of Justice (2025)Quelle. It gets tricky if you start to behave like a hotel: cleaning, fresh linen, breakfast, reception, or stays so short and turnover so organised that the lettings look economically like a hospitality business. Then the activity can be reclassified as commercial – with consequences for VAT, trade tax and income tax. The line is drawn case by case; talk to a tax adviser before the first listing goes live Haufe Steuer‑Office: Short‑term letting – private or commercial income (2024)Quelle.

2. VAT#

Long‑term residential letting beyond six months is VAT exempt (§ 4 No. 12 UStG) – furniture counts as a non‑independent ancillary service. Short‑term lets up to six months are subject to the reduced 7% rate on accommodation and furniture (§ 12 Para. 2 No. 11 UStG). The small‑business rule may apply under the thresholds in force since 2025 – have it confirmed individually Bundestag research service WD 4 - 093/24: VAT on short‑term letting (2024)Quelle.

3. Rent cap#

The German rent cap has been extended from July 2025 to 31 December 2029. In the roughly 814 municipalities classified as "tight housing markets" the new‑contract cold rent must not exceed the local reference rent by more than 10%. And yes – furnished apartments are affected unless an exception applies Bundestag: Mietpreisbremse extended to 2029 (2025)Quelle.

The furniture premium itself is not directly subject to the cap – but it must be calculated separately and defensible. Otherwise the landlord carries the burden of proof and risks having to refund the excess rent. In Berlin, guidelines have become established and are frequently applied: around 2% of the current furniture value per month, derived from a 10‑year straight‑line depreciation plus 12–14% return on capital Berlin Senate Department: Guidelines on furniture premiums in residential lettings (2025)Quelle. That formula is Berlin LG practice, not a nationwide standard – other regional courts calculate differently. As a self‑calculation ceiling, however, it remains a sensible benchmark you can defend in court.

4. Short‑stay letting (§ 549 Para. 2 BGB)#

Tenancies for temporary use only are excluded from the rent cap. What matters is not the furniture but the mutually intended short tenancy for a specific reason – an internship, a project posting, a renovation of the tenant's main residence. Anyone who labels a standard one‑year contract as "short‑stay" risks having the exception overturned and the cap applied retroactively. A reform under discussion in the Bundesrat would, in tight markets, generally rule out short‑stay status once the tenancy lasts six months or longer Bundestag research service WD 7 - 088/24: Rent cap and furnished lettings (2024)Quelle.

5. Change‑of‑use rules (Zweckentfremdung) – the underrated trap#

Anyone offering "furnished with frequent turnover" steps beyond tenancy and tax law into change‑of‑use law. More than 60 German municipalities now have local ordinances – including Berlin, Hamburg, Munich, Cologne, Frankfurt, Düsseldorf and, since 2019, Aachen under North Rhine‑Westphalia's Housing Strengthening Act. Anyone permanently using residential space for purposes other than long‑term living – holiday lets or daily tenant changes – needs a permit. Thresholds vary widely:

• NRW (Aachen, Cologne, Düsseldorf etc.): typically 90 days per year of short‑stay letting without permit; students 180 days. Above that: housing ID and permit.
• Bavaria (Munich): 8 weeks (56 days) per calendar year.
• Berlin / Hamburg: Letting out your own main residence is allowed temporarily; second homes generally capped at 90 days per year, with district‑specific details.

Fines run up to €500,000 (Berlin, Munich, Hamburg) and are actually imposed. Long‑term furnished letting from around six months onwards to the same tenant generally falls outside change‑of‑use rules – the tenant transfers their primary residence and registers there, so the apartment continues to serve a residential purpose City of Aachen, housing protection and change of use (2025)Quelle.

Furnished ROI calculator – your case in 30 seconds#

The calculator compares extra income with extra cost versus the unfurnished baseline over 36 months. It shows three values: the net advantage after three years, the break‑even month (cash recovery of the furniture investment) and the gross extra income earned. A clear recommendation closes the result – it does not replace tax or legal advice, but it tells you whether the case is worth a closer look.

Furnished or unfurnished – the five levers#

Whether furnished is worth it rarely hinges on a single factor. Work through these five levers:

1. Pick the target group realistically. Anyone offering the apartment in a university town to students only gets reliable demand but shorter contracts. Going after expats requires good location, English‑language listings and a clean handover process – rewarded with longer tenancies.
2. Cap the furniture investment. A full set‑up from a furniture store including delivery and assembly is expensive. A curated mix of mid‑range standard pieces plus two or three statement items often comes 30–40% below "everything brand new" and looks just as upmarket in the listing photos.
3. Keep the furniture premium defensible. The premium must fit the furniture investment. The Berlin guidelines (around 2% of current furniture value per month) are a pragmatic ceiling that holds up in court.
4. Choose the contract type consciously. A classic open‑ended tenancy with furniture, a fixed‑term contract with a legal reason, or a true short‑stay tenancy under § 549 BGB – the legal consequences differ widely. When in doubt, clarify with a lawyer or tenants' association before signing.
5. Energy efficiency and location first. Even for furnished apartments, listings that show low ancillary costs let faster. A poorly insulated apartment with expensive gas heating relativises any furniture premium as soon as utility bills arrive.

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