Rent increases: The comeback of index leases

Dusseldorf For years they had a niche existence, but now they are in demand: index leases. Although these contracts were common in the commercial sector, they were not with private landlords. That is now changing because of rising inflation.

More and more landlords want to achieve better returns with these contracts. Rudolf Stürzer, chairman of the Haus und Grund landlords’ association in Munich, says that this is not the only advantage of the contract structure: “The instrument creates transparency and prevents disputes that arise when the rent index is used as a basis.”

Regardless of whether you are a small private landlord or a real estate group, the principle is the same: an index rent links the amount of the rent to the development of the cost of living. The basis for the calculation is the consumer price index (CPI) from the Federal Statistical Office, which serves as the basis for the inflation rate. The index measures how the prices of all goods and services that private households buy are changing on average.