Diving into the rental market and getting a flat for yourself in Germany?
We are sure you’ll quickly encounter two unique phrases that might leave you scratching your head: cold rent and warm rent.
Nope, we know what you are thinking. These terms have nothing to do with the temperature of your apartment but are a crucial step in understanding how rental costs are broken down.
Cold rent, often referred to as Kaltmiete is the base rent you pay for your space. This is probably what you see advertised on websites and property listings. On the other side, we have warm rent, or Warmmiete, which throws utilities and other costs into the mix.
This is an oversimplification of the actual facts though. We wish it were as simple as we just explained it. But hey, that’s the purpose of this blog: to make these scary-looking, confusing topics seem more approachable, so here’s our bite-sized approach.
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What Exactly is Cold Rent in Germany?
Kaltmiete, quite literally translating into ‘cold rent,’ is the base rent for an apartment in Germany. It’s the core cost of renting a place and does not include any additional utilities or services.
Essentially, cold rent solely covers the base price of living in the apartment itself. The easiest way to perceive it is as the cost for the physical space you’ll occupy—no furniture, heating, appliances, electricity, WiFi, or water.
What is Not Included in Cold Rent?
Here’s where things start to get a little complex:
- Utility costs: There are separate charges for essential services like water, heating, electricity, and garbage disposal. They are billed additionally and can vary depending on usage and the number of occupants.
- Service charges: These cover costs associated with maintaining the property, such as cleaning common areas, gardening, and property insurance. They usually come under a separate bill referred to as the Nebenkosten Bill.
Let’s take a quick example to understand this: You find an apartment with a cold rent of €500. This means you’ll pay €500 each month for the base rent of the apartment itself.
On top of that, you will receive a separate bill for utilities and service charges (Nebenkosten), which is subject to change.
Most German cities have a feature often called Mietspiegel or a rent index. This is a tool that provides a base reference for reasonable Kaltmiete based on factors like location, size, and standard of the apartment. Landlords cannot exceed these limits without justification. This maintains a cap on the local rent prices, ensuring equity for everyone.
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Rent Index for Different Cities in Germany for 2023
| Cities in Germany | Average Rent in Euros/Square Metre |
| Munich | 19.23 |
| Frankfurt am Main | 14.8 |
| Stuttgart | 14.29 |
| Hamburg | 12.74 |
| Cologne | 12.95 |
| Dusseldorf | 12.34 |
| Berlin | 14.3 |
This is child’s play, but here’s a simple calculation for you:
Suppose you want a 50 square metre apartment in Berlin, your expected cold rent would be in the range of:
€14.3/sqm * 50 = €715 per month
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Understanding the Nuances and Additions Included in Warm Rent
Warmmiete, or warm rent is the total monthly rent payment you are expected to pay at the beginning or end of the month. It is a combination of cold rent, all other operating costs, and service charges.
If you were to break down warm rent as per the different costs that are included, it would look something like the following:
- Cold Rent
- Heating and Water: Heating charges might vary based on the type of heating system you have installed. A central heating system is common for the entire building, so you pay a portion based on the size of your apartment and overall usage. In comparison, an individual heating system is your own personal heating unit, so you only pay for your own usage, offering you more control over costs.
- Other utilities: These typically include garbage disposal, common area cleaning, property insurance, and maintenance.
Why Should You Pay More Attention to Warm Rent?
As it is already established, cold rent will always be lower than warm rent. And it is incredibly easy to fall prey to listings and advertisements for apartments when just the cold rent is listed. However, when you pick an area to live in, do the necessary research to make sure that you can afford the total rent for the apartment, and not just the cold rent.
Here are a few reasons why you should consider warm rent:
- Having all costs bundled into one payment simplifies budgeting and avoids dealing with multiple bills.
- Knowing the total upfront cost simplifies financial planning.
- Can offer more predictability in monthly in monthly payments, especially if historical data is available.
How Is Nebenkosten (Additional Costs) Involved in the ‘Cold Rent’ and ‘Warm Rent’ Narrative?
Additional costs, as mentioned briefly earlier, refer to operating expenses that are added to the base rent (cold rent) to determine the total monthly rent (warm rent). Most of the time, you can choose between paying either the warm rent, or the cold rent and then these additional costs separately.
When you rent an apartment in Germany, the additional costs that you will have to incur are often highlighted in your rental agreement. These may include individual services (which you can choose to have or not have) and communal services (which are mandatory and need to be paid for.
- Heating – The landlord is usually responsible for deciding how much you need to pay for heating based on the heating source (oil, natural gas, or liquid gas), the size of the apartment, the number of inhabitants, etc.
- Electricity – Most buildings have an electricity metre for each unit. The tenant is supposed to set up an account with the electricity board/company and receive bills directly from them.
- Water – In Germany, water is generally supplied by the municipal waterworks, and payments are usually based on individual consumption. The landlord is responsible for splitting the water bill for the new tenants.
- Wastewater – This comes under the communal services section of the Nebenkosten.
- Trash removal and recycling pick up – Yet again, the regular removal of trash and pick-up of recycling materials is part of the services offered by the municipality. Although it is included in the Nebenkosten, it is a mandatory charge.
- Cable/Satellite Television – Unless the landlord has provisions for a satellite television set-up or a readily available connection, this is one of the expenses that is dependent on the leisure of the renter.
- Internet Connection – Like a cable connection, internet set-up, and connection will only make it to your Nebenkosten if it is maintained by your landlord.
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Making a Sound Decision Between Cold Rent and Warm Rent
Picking between Kaltmiete and Warmmiete depends on your individual circumstances. Here are some key factors to consider:
- Budget: If you’re on a tight budget, cold rent might seem more attractive. However, factor in the potential hidden costs of managing and budgeting for separate utility bills.
- Lifestyle: Do you like control over your energy usage? Cold rent with individual heating allows adjustments. Warm rent, especially with central heating, offers less control.
- Work Habits: If you are busy and moving into a new space in a hurry, cold rent might be a lot to deal with as you will have to sort out your utilities all by yourself. Instead, opting for warm rent offers you an easier means of sorting your life out quickly.
- Length of Stay: For short stays, Warm rent is just so much simpler. Cold rent, if that is what you choose to opt for, can be advantageous for longer stays (if you’re disciplined about managing utilities).
Hidden Costs with Cold Rent That Renters Often Forget About
- Setting up utility accounts, which may take a few weeks.
- Dealing with multiple bills and managing budgets for each service.
- Potential for overpaying for utilities if not monitored closely.
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The Push and Pull Game of Cold Rent and Warm Rent in Germany
Moving to a new country is particularly difficult when you need a find a home for yourself. In Germany, there is a larger nuance to it, in the form of cold rent and warm rent for new renters. Both of the rental systems are put into place to allow renters freedom and choice when it comes to making their lifestyle decisions.
For meticulous and disciplined planners who have accordion folders for all of their bills and taxes, cold rent is the best way to go. They pay for the space and arrange all other utilities by themselves, to suit their specific needs.
However, for exhausted, busy students or corporate workers, it can be a hassle to get everything together. In fact, missed payments or even overpayments can lead to unforeseen hassles, and that’s where warm rent comes in. You get a bill that is inclusive of all utilities and services. You just have to make one payment, and it’s done!
Most renters get a combination of cold rent and warm rent, that is, cold rent along with the payments for communal services such as trash collection, gardening, maintenance, etc.
However, if you choose to rent an individual flat or a shared apartment with Urban Ground, we make the process even easier for you. From renting the apartment to sorting out utilities and services to signing the rental agreement to moving in, we will be with you, every step of the way.
