What is the price multiple for property?
The price multiple is the most important metric when buying and selling apartment buildings and income properties. It shows at a glance whether a price matches the rent achieved — and lets you compare properties of different sizes and locations directly with one another. Anyone selling or buying an apartment building cannot get around this figure.
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What the price multiple says — and what it doesn't
The price multiple (also multiplier) answers a simple question: how many times the annual net cold rent is being paid for the property?
Formula: price multiple = purchase price ÷ annual net cold rent
An example: an apartment building costs 900,000 € and generates 45,000 € in annual cold rent. Price multiple: 900,000 ÷ 45,000 = 20x. The buyer pays 20 times the annual rent — or put another way: with the rent staying the same, it takes 20 years for the purchase price to be refinanced through rent alone.
Important: the price multiple takes no account of incidental purchase costs, financing costs, maintenance or vacancy. It is a comparative metric, not a complete return calculation. For the actual return on the capital employed, you need the return-on-equity calculator.
The price multiple and rental yield — two sides of the same coin
The price multiple and gross rental yield are mathematically reciprocal:
| Price multiple | Gross rental yield |
|---|---|
| 14x | 7.1 % |
| 17x | 5.9 % |
| 20x | 5.0 % |
| 22x | 4.5 % |
| 25x | 4.0 % |
| 28x | 3.6 % |
That means: anyone who knows the multiple also knows the gross yield — and vice versa. Buyers and sellers often speak in multiples rather than percentages, because multiples are more intuitive to compare: "the property is going for 22 times" is more tangible than "that corresponds to 4.5 % gross".
Dresden reference values 2026: what is in line with the market?
The price multiples in Dresden vary widely by location and property quality. As an orientation for the current market:
| Location type | Typical multiple 2026 | Gross rental yield |
|---|---|---|
| Very good city-centre location (Blasewitz, Neustadt) | 23–26x | 3.8–4.3 % |
| Good location (Striesen, Hechtviertel, Pieschen) | 20–24x | 4.2–5.0 % |
| Mid-range location (Löbtau, Leuben, Gruna) | 17–21x | 4.8–5.9 % |
| Peripheral location (Gorbitz, Prohlis, Reick) | 14–18x | 5.6–7.1 % |
These values are approximations for fully let properties in normal condition. A need for renovation, vacancy or favourable old tenancy agreements significantly lower the achievable multiple. A property with 30 % vacancy rarely achieves the same multiple as a fully let one, because the buyer prices in the risk.
What sellers should bear in mind about the multiple
The price multiple that investors accept on the Dresden market depends on several factors:
- Rent-increase potential: if the actual rent is below the market, buyers often pay a higher multiple, because they factor in headroom for rent increases.
- Condition and remaining useful life: renovated properties with a new heating system, roof and windows achieve higher multiples than buildings in need of renovation.
- The financing interest rate: when rates are low, investors accept higher multiples (20–25x), because financing is cheaper. When rates rise, the multiples are pushed down.
- The tenancy situation: long-standing tenants with very low rents reduce the multiple. Properties with vacant flats or expiring agreements are more attractive.
Anyone selling their apartment building in Dresden should know the multiple currently achievable — and understand which measures before the sale can improve the multiple. We give you a free assessment based on your specific property.
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