How to Buy a Rental Property in Vienna with a Mortgage and Build Retirement Income Without Gambling Your Future
- Published Date: 2 Feb, 2026
-
4.9★ ★ ★ ★ ★(194)
Dr. Pooyan Ghamari, PhD Swiss Economist and Strategic Advisor
Most guides tell you rental property is "passive income." It isn't. It's a second job with leverage. But if you treat it like a small business and stay boring, Vienna's rental market can quietly fund your retirement while you sleep. This guide shows you how to buy your first rental unit in Austria, finance it intelligently, screen tenants like a professional landlord, and expand into a portfolio that throws off €2,000–€4,000 per month by the time you're 60—without taking casino-level risk.
Who This Guide Is For
• European citizens with stable employment who can save €50,000–€100,000 for a down payment.
• People who want to own 2–4 rental units over 15 years, not flip properties or chase Instagram real estate fame.
• Investors who accept that Vienna rental yields are low (3–5% gross) but stability is high, and who value sleep over excitement.
The 3 Numbers That Decide Whether This Deal Is Real
Before you look at a single apartment, you need three numbers. Everything else is decoration.
Number 1: Purchase Price (All-In)
Not just the listing price. Add 10% for Austrian real estate transfer tax (3.5%), land registry fees (≈1.1%), notary (≈1.5–2%), and broker commission if applicable (≈3% + VAT). A €300,000 apartment costs you €330,000 to own.
Number 2: All-In Monthly Costs
Mortgage payment + property tax (Grundsteuer, small but real) + building insurance + HOA/service charges (Betriebskosten) + 10% vacancy reserve + 8–10% annual maintenance reserve (roof, plumbing, appliances don't ask permission to break) + property manager fee if you use one (8–12% of rent). If you can't list these, you don't have a deal. You have a guess.
Number 3: Realistic Rent (Not Advertised Rent)
Check the last 20 comparable units that actually rented in that micro-neighborhood on ImmobilienScout24 and WillHaben. Ignore asking rents. Ignore what the seller "thinks it could get." Use the median of what moved in the last 90 days. Subtract 5% as a pessimism margin.
If Number 3 minus Number 2 is positive after mortgage cost, you have potential cash flow. If it's negative, you're betting on appreciation in a city where prices move slowly. That's not wrong, but call it what it is.
Step-by-Step Blueprint
1. Define Target Tenant and Micro-Location
Vienna has districts. Districts have neighborhoods. Neighborhoods have blocks. You're buying a block, not a city.
Student tenant: Near universities (Alsergrund, parts of Leopoldstadt, Favoriten near FH Campus). Expect turnover every 1–2 years. Furnished = higher rent but more management. Shared flats (WGs) rent faster but need more maintenance.
Professional tenant: Near U-Bahn stations in Districts 2, 3, 10, or 12. One- or two-bedroom units. Professionals stay 3–5 years if the place is clean and quiet. They don't call you for burned-out lightbulbs.
Family tenant: Districts 13, 14, 18, 19, or 21. Three-bedroom minimum, near schools and parks. Families stay 5–10 years. Rent is stable. You'll repaint less.
Walk the block at 7 AM, 12 PM, and 9 PM before you bid. If it feels wrong at any hour, move on. Your tenant will feel it too.
2. Choose Property Type That Rents Fastest
Apartments (Eigentumswohnung): The standard choice. Check the building's age, HOA reserves, and whether major renovations (façade, elevator, heating system) are planned. An unexpected €15,000 special assessment kills your year.
Gründerzeit buildings (pre-1918): High ceilings, charm, but check heating costs and window quality. Tenants love them, but energy certificates matter now under Austrian regulations.
Neubau (new construction): Lower maintenance, energy-efficient, but you pay a premium and yields compress. Good if you hate surprises.
Avoid: Ground-floor units in high-traffic areas (noise, security concerns). Top floors without elevators in older buildings (limits your tenant pool). Anything requiring gut renovation unless you're a contractor.
3. Build an All-In Cost Sheet
Use this template. Fill every line before you make an offer.
One-time costs (due at closing):
• Real estate transfer tax: 3.5% of purchase price
• Land registry fee: ≈1.1%
• Notary: ≈1.5–2%
• Broker commission (if applicable): ≈3% + 20% VAT
• Renovation/furnishing (if needed): budget conservatively
Monthly recurring costs:
• Mortgage payment (principal + interest)
• HOA/Betriebskosten: Ask the seller for last year's actual statement, not their estimate
• Property tax (Grundsteuer): I cannot confirm exact rates as they vary by municipality; check your local tax office; typically €200–€600/year for standard apartments
• Building insurance: €30–€80/month depending on coverage
• Vacancy reserve (10% of monthly rent)
• Maintenance reserve (8–10% of annual rent)
• Property manager (if used): 8–12% of monthly rent + VAT
Add these. If the total monthly outflow exceeds 85% of your expected rent, you're tight. If it exceeds 100%, you're subsidizing someone else's housing with your paycheck.
4. Mortgage Strategy That Banks Accept
Austrian banks will lend to EU citizens. Here's what works.
Loan-to-value (LTV): Expect to put down 20–30%. Some banks go to 80% LTV if your income is strong, but 70–75% is standard for non-owner-occupied investment property. Do not stretch to 90% LTV on a rental. One bad year and you're trapped.
Term: 25–30 years is common. Longer terms = lower monthly payment but more interest. Shorter terms = higher payment but you own it faster. Pick based on cash flow needs, not vanity.
Fixed vs. variable rate: I cannot confirm current exact rates as they change weekly; as of early 2025, check Erste Bank, Bank Austria, and Raiffeisen for benchmarks. Fixed rates (5–15 years) protect you if ECB raises rates again. Variable rates (tied to EURIBOR + margin) are lower now but risky if you can't absorb a 2% jump. Conservative move: lock 60–70% of the loan at a fixed rate, leave the rest variable so you can prepay without penalty.
Stress test: Banks will model what happens if rates rise 2–3%. You should too. If a 2% rate increase makes the property cash-flow-negative by more than €200/month, reconsider the deal or increase your down payment.
5. Pre-Approval Checklist
Walk into the bank with these, or don't walk in.
• Last 3 months of pay stubs
• Last 2 years of tax returns (if self-employed, 3 years)
• Bank statements showing down payment + 6 months of reserves sitting in your account
• Proof of existing debts (car loans, other mortgages, credit cards)
• Austrian residence permit or EU passport
• Preliminary property details (address, asking price, energy certificate)
Banks want to see that you're boring. No overdrafts, no gaps in employment, no unexplained large deposits. If your finances look like a detective novel, fix that before you apply.
6. Deal Screening Formula
Run every property through this.
Gross yield = (Annual rent / Purchase price) × 100
Vienna: expect 3–5% gross. Below 3%, you're betting on appreciation alone. Above 5%, something's probably wrong (bad location, troubled building, or the seller's lying about rent).
Net yield = (Annual rent – All annual costs except mortgage) / Purchase price × 100
This is the real number. If net yield is below 2%, you're working for the bank and the property, not the other way around.
Cash flow = Monthly rent – Monthly costs (including mortgage)
Positive cash flow from day one is rare in Vienna unless you put down 40%+. Many investors accept small negative cash flow (€100–€200/month) betting on principal paydown and appreciation. That's fine if you have reserves. It's not fine if you're counting on rent to cover everything.
Run these three numbers on paper before you visit the property. If the math doesn't work on paper, it won't work in real life with better lighting.
7. Due Diligence Checklist
Hire a lawyer. Budget €1,500–€2,500. Do not skip this.
Your lawyer checks:
• Grundbuch (land registry): Who owns it? Are there liens, easements, or legal disputes?
• Building permit history: Any unpermitted renovations that could become your problem?
• HOA minutes (last 2 years): What repairs are planned? Are other owners paying their fees? Any lawsuits?
• Energy certificate (Energieausweis): Required by law. Poor rating = higher heating costs = tenants complain or leave.
• Rental history: If it's currently tenanted, review the lease. Is the rent market-rate or artificially low? Are there disputes?
You also walk through the unit with someone who knows construction. Check:
• Water damage (ceilings, corners, bathroom)
• Window seals (Austrian winters are cold; drafty windows kill you on heating)
• Electrical panel (old fuse boxes are a red flag)
• Plumbing (flush the toilet, run the taps, check under sinks)
If the seller rushes you, walk away. Slow is smooth. Smooth is fast.
8. Negotiation Strategy
Do not fall in love with the property. The seller is not your friend. The broker works for the seller, not you.
Step 1: Make a list of every flaw you found during viewing. Bring photos.
Step 2: Offer 5–8% below asking if the market is flat, 3–5% if it's competitive. Reference your list. Be polite, factual, unemotional.
Step 3: If they counter, split the difference once, then stop. If they won't move, walk. There are 2,000 other apartments in Vienna.
The best negotiation tool is indifference. If you need this specific unit, you've already lost. Always have two backup options you'd be equally happy with.
9. Closing Process Explained Simply
Austrian property transactions go through a notary. Here's the timeline.
Week 1–2: Sign preliminary sales agreement (Kaufvertrag). You may pay a deposit (usually 10%) held in escrow.
Week 2–4: Notary drafts final contract, submits to land registry (Grundbuch).
Week 4–8: Land registry processes transfer (can take 4–12 weeks depending on backlog). You pay the balance. Ownership transfers.
You do not get keys until the land registry confirms the transfer and you've paid in full. Budget 2–3 months from accepted offer to closing.
During this window, confirm your mortgage funding is locked. If rates rise or the bank changes terms, you're exposed.
10. Tenant Selection System
Bad tenants cost you 6–12 months of rent in legal fees, lost rent, and damage. Prevention is cheap.
Application requirements:
• Last 3 pay stubs (gross income should be 3× monthly rent minimum)
• Employer reference letter
• Copy of ID
• Previous landlord reference (call them; don't just read the letter)
• Schufa or KSV credit report (you can request this in Austria)
Red flags:
• Rushed timeline ("I need to move in tomorrow")
• Vague employment details
• Offering to pay 6 months upfront in cash (possible money laundering; also illegal under some Austrian rules)
• Bad-mouthing previous landlord (if they're difficult once, they'll be difficult twice)
Meet them in person. Trust your gut. If something feels off, it probably is.
Use a standard Austrian rental contract (Mietvertrag). Do not freestyle. Include clauses for deposit (usually 3 months' rent, held in escrow), notice period (typically 3 months for tenants, longer for landlords), and maintenance responsibilities.
11. Rental Operations
Set up a separate bank account for the property. All rent goes in. All expenses come out. Do not mix this with your personal finances.
Monthly tasks:
• Confirm rent payment (set up automatic transfer if tenant agrees)
• Check property once per quarter (or have property manager do it)
• Respond to repair requests within 24 hours (small issues become big issues if ignored)
Annual tasks:
• Review HOA statements for special assessments
• Increase rent if allowed by law (Austrian rent control rules apply in some cases; check Mietrechtsgesetz)
• Inspect property thoroughly, especially before lease renewal
• Update insurance coverage if property value has increased
Reserve fund:
Keep 6 months of all-in costs in the property account at all times. This covers vacancies, emergency repairs, and legal fees if things go wrong. If you dip below 3 months, stop expanding and rebuild reserves.
12. Portfolio Expansion Plan
Do not buy your second property until your first has been rented for at least 12 months without major problems.
When to buy the next unit:
• First property cash flows positively (or you're comfortable covering small negative cash flow)
• You've rebuilt your personal emergency fund (6 months of living expenses)
• You have down payment + closing costs + 6 months reserves for the new unit
• Your debt-to-income ratio can handle another mortgage (banks typically cap total debt service at 40–50% of gross income)
Refinance logic:
After 5–7 years, if the property has appreciated and you've paid down principal, you can refinance to pull out equity for the next down payment. This is leverage. It's also risk. Only do this if:
• Cash flow on the first property is strong enough to absorb higher payments
• You're not refinancing just to chase appreciation
• You can still cover all mortgages if one unit sits vacant for 6 months
Risk limits:
Never let your total rental portfolio exceed 3–4 units unless this becomes your full-time job. Each unit adds complexity. Most people who own 10+ rental properties either have a team or are miserable.
Stop expanding when your rental income (after all costs, including mortgage) hits your retirement income goal. You're not building an empire. You're building a pension.
Realistic Example with Conservative Numbers
I cannot confirm exact current rent prices or mortgage rates as of February 2026, so I'll provide ranges based on typical Vienna patterns. Verify these with local banks and recent rental listings.
Scenario 1: Cautious (District 10, Favoriten)
Property: 55 m² two-bedroom apartment, 10 minutes from U1 station
Purchase price: €250,000
All-in acquisition cost: €275,000 (€250k + 10% fees/taxes)
Down payment (30%): €82,500
Mortgage: €192,500 at 4.5% fixed for 10 years, 25-year term = €1,070/month
Monthly costs:
• Mortgage: €1,070
• HOA/Betriebskosten: €180
• Property tax: €35 (estimated)
• Insurance: €50
• Vacancy reserve (10%): €90
• Maintenance reserve (8% annual = €864/12): €72
• Property manager (10% of rent + VAT): €100
Total monthly cost: €1,597
Expected rent: €850–€950/month (verify with ImmobilienScout24 for recent comparables)
Using €900/month: Cash flow = €900 – €1,597 = –€697/month
You're subsidizing €697/month. Over 12 months, that's €8,364 out of pocket.
Stress test (rent drops to €800, rate rises to 6%):
New mortgage payment: ≈€1,240
Cash flow = €800 – €1,727 = –€927/month
Can you cover €927/month for 12 months if the market softens? If no, this deal is too tight.
Scenario 2: Normal (District 3, Landstraße)
Property: 65 m² two-bedroom apartment, 5 minutes from U3 station
Purchase price: €350,000
All-in acquisition cost: €385,000
Down payment (25%): €96,250
Mortgage: €288,750 at 4.5%, 25 years = €1,606/month
Monthly costs:
• Mortgage: €1,606
• HOA/Betriebskosten: €220
• Property tax: €45
• Insurance: €60
• Vacancy reserve: €125
• Maintenance reserve: €104
• Property manager: €138
Total monthly cost: €2,298
Expected rent: €1,200–€1,350/month
Using €1,250/month: Cash flow = €1,250 – €2,298 = –€1,048/month
Still negative. But better tenant pool, lower vacancy risk, and after 7 years of principal paydown + modest appreciation, you can refinance or the mortgage payment drops as a percentage of rent.
Breakeven path:
After 10 years, assuming 2% annual rent growth (€1,250 → €1,524) and fixed mortgage payment, you're nearly cash-flow neutral. After 15 years, you're positive. At year 25, the mortgage is paid off and you collect €1,800–€2,000/month net.
This is how Vienna rentals work. You wait. You're patient. You don't panic.
Mistakes I See Europeans Make in Austria
• Underestimating Betriebskosten. Sellers always lowball this. Get the actual HOA statement or add 20% to their estimate.
• Skipping the lawyer because "it's just paperwork." Austrian property law is complex. Liens, easements, and cooperative building rules can destroy you.
• Buying in District 1 or 5 chasing glamour. Yields there are 2–3% gross. You're not investing, you're collecting art.
• Using variable-rate mortgages for 100% of the loan because "rates are low." Rates were low. They aren't now. Lock most of it.
• Renting to friends or family without a contract. When it goes bad, it goes very bad. Treat everyone like a business tenant.
• Forgetting about vacancy. Even great units sit empty for 1–2 months between tenants. Budget for it or the first gap will wreck your year.
• Expanding too fast. Buying 3 units in 3 years sounds impressive. Foreclosing on 2 of them in year 4 because you couldn't cover a downturn is not impressive.
Verification Map
Do not trust this guide, the seller, the broker, or anyone else. Verify everything.
Property taxes and fees:
• Austrian Federal Ministry of Finance (BMF) website for transfer tax rules
• Local municipality (Gemeinde) office for Grundsteuer rates
Mortgage rates:
• Erste Bank, Bank Austria, Raiffeisen: request rate sheets for investment property loans
• Austrian National Bank (OeNB) publishes average lending rates quarterly
Rental market data:
• ImmobilienScout24 and WillHaben for recent comparable listings
• Filter by "rented" not "listed" (asking rents lie)
• Vienna City housing department (Wiener Wohnen) publishes some rental statistics
Legal and registry:
• Grundbuch (land registry) is public; your lawyer can pull reports
• Austrian Chamber of Notaries (Österreichische Notariatskammer) for standard contract templates
Building and HOA:
• Request last 2 years of HOA financial statements directly from the building manager (Hausverwaltung)
• Ask for minutes of annual owner meetings (Eigentümerversammlung)
If anyone refuses to provide documents, walk away.
The people who build wealth in Vienna real estate are not the clever ones. They're the patient ones who bought boring apartments, collected boring rent, kept boring reserves, and didn't do anything stupid for 20 years.
FAQ's
1. Should I buy personally or via a company (GmbH)?
2. How does Austrian rent control (Mietrechtsgesetz) affect me?
3. What happens if my tenant stops paying?
4. Should I furnish the apartment?
5. How does currency risk work if I'm paid in a non-EUR currency?
6. When does refinancing become dangerous?
7. How does vacancy behave in downturns?
8. What's the tax treatment of rental income?
9. Can I use a foreign mortgage for Austrian property?
10. How do I think about this vs. just investing in index funds?
