Before and after
Before
After
What exactly was changed:
Strategic Floorplan Optimization:
The original 2-room layout was converted into 3 separately rentable rooms to significantly increase the property's income potential.
Complete Modernization:
Flooring, walls, heating, electrical systems, kitchen and plumbing were renewed with brand-new equipment.
Furnished Co-Living Concept:
The apartment was equipped with approximately €14,000 worth of furniture and prepared for room-by-room rental.
Fully Managed Rental Model:
Three individual rental contracts were implemented, while ongoing tenant and property management is handled on behalf of the investor.
The Initial Problem
The original apartment had potential, but not the right income structure
Before the transformation, the apartment generated only €1,200 in monthly cold rent. Based on the €505,000 purchase price, this resulted in a gross rental yield of approximately 2.85%.
At the same time, the outdated condition of the apartment created significant future maintenance risk and required extensive modernization.
For Emmanuel, the objective was not simply to buy another investment asset. He wanted to diversify his existing portfolio while improving rental performance and creating a more tax-efficient investment structure.
The existing 2-room rental model could not achieve these objectives. The property therefore needed to be restructured both physically and financially.
The LDP Solution
The strategy behind the Emmanuel case
We started with a €505,000 Munich property and structured the purchase so that the agreed renovation works were already contractually integrated into the transaction.
The apartment was then completely modernized and reconfigured from 2 rooms into 3 separately rentable rooms.
Instead of generating €1,200 in monthly cold rent under the original rental model, the new co-living structure generates €2,250 per month — an increase of approximately 88%.
The three rooms are rented individually and professionally managed on Emmanuel's behalf.
At the same time, the financing structure was optimized around a low repayment rate in order to keep the investor's monthly cash requirement as low as possible.
The Numbers, Black on White
The key numbers from Emmanuel's case at a glance
~€505,000
total investment according to the case
>€37,000
renovation portion included in the purchase structure
~53 sqm
living space
3
individual tenants
€2,250
monthly cold rent
€27,000
annual cold rent
~€25,000
equity required
~€95
monthly out of pocket
~€17,000
first year tax relief
Financing and Cash Flow
Why this case was possible with relatively little equity
Emmanuel was able to finance the full €505,000 purchase price and only had to contribute the ancillary acquisition costs.
This resulted in an initial cash requirement of approximately 5.5% of the purchase price, or around €25,000.
The financing used in the case was structured at approximately 4.08% interest with a 1% repayment rate, resulting in a monthly bank payment of around €2,137.
On the income side, the apartment generates €2,250 in monthly cold rent.
After also taking non-recoverable property costs of approximately €87 per month and professional management costs of approximately €120 per month into account, the detailed case calculation results in an annual out-of-pocket amount of approximately €1,141.
That equals less than €100 per month before tax effects for a fully modernized and professionally managed Munich investment.
Tax Advantage
The real lever, the first year tax benefit
A major part of the upside came from the purchase and renovation structure. Over €37,000 in renovation costs, property depreciation, and €14,000 in furniture create an estimated €40,000 taxable loss in year one. At the assumed 40% tax rate, this results in roughly €17,000 in tax savings, potentially recovering a significant part of Emmanuel’s initial cash contribution while he continues to own the property.
Proof and Documentation
Black and white proof, not empty claims
LDP Support After the Purchase
The purchase is not the finish line, it is where the real work starts
The real value is created after the deal is done. We take over the full operational side from ongoing rental management and administration to handling tenant turnover, re-letting, and coordinating maintenance.
Instead of handing over the keys and stepping away, we stay involved as a long-term partner. This ensures the property continues to perform, grow, and deliver results well beyond the initial purchase.
Exit and Long Term Perspective
Not just tax optimization, but real long term wealth building
For the long-term projection, the case uses a conservative annual property appreciation assumption of only 2%.
Because approximately €14,000 of the original purchase structure relates to furniture, this amount is excluded from the property appreciation calculation.
Under these assumptions, the apartment is projected to reach a value of approximately €598,000 after 10 years.
At the same time, the projected remaining loan balance falls to approximately €444,000.
Based on these figures, the investor could have built approximately €150,000+ in property equity over the holding period, before potential selling costs.
