Cash flows for modernisation in rental properties (MietMOD)

The model considers the monetarily relevant income and expenditure of tenants, landlords, public budgets and funding providers for both the unrenovated initial state and the energy-efficient renovated state of a rented building. It takes into account the applicable regulations of tenancy law, tax law, energy prices and subsidies. The aim is to evaluate policy measures and subsidy programmes from the perspective of the stakeholders. Cash flows are mapped over a period of 20 years. This also captures long-term effects, such as energy cost savings or the modernisation surcharge. All data is given in real terms in Euro2025, i.e. the influence of inflation is factored out. It is possible to evaluate the timing of the cash flows by discounting (present value calculation). The dynamic development of the framework data in the rented portfolio over the last 10 years is extrapolated into the future, adjusted for inflation. Cash flows that only arise during the construction phase are distributed over the first two years, as longer construction periods are not expected. 

For cash flows that extend beyond the period under review, the residual value is shown in the last year. Since the residual value can have a significant impact on long-lasting building components, it can also be presented as a discounted net present value. The statements are therefore conservative from the landlords' point of view. Nevertheless, it is clear that all renovations represent a value that is embodied in the buildings and is not fully compensated for even after the end of the period under review. It is assumed that the heating technology will need to be replaced after the period under review, but that the structural measures will remain usable for another 20 years before the next maintenance cycle. The cash flows related to energy-efficient refurbishment are primarily shown. Other operating income and expenses of the landlords are not included. This serves to compare variants, but does not allow any conclusions to be drawn about the amount of any returns on the part of the landlords. 

The model enables a comparison of the financial situations of landlords and tenants throughout a renovation process. For both groups of actors, it shows the extent to which they benefit or are burdened by a renovation compared to the initial situation. On the one hand, this shows the proportions and relevance of the individual cash flows in the status quo. Based on this, individual or multiple parameters can be varied and the effects of these variants quantified. This makes it possible to map individual measures and packages of measures and compare their effects with the status quo.

MietMod can be used to map different housing markets (e.g. regions with high influx, regions with high outflow, constant demand). This takes into account the fact that markets with high demand for housing behave differently from shrinking regions where people are less willing to pay. 

Further distinctions can be made within the stakeholder groups. The group of landlords can be divided into private small landlords, municipal landlords and commercial landlords. Tenants can be distinguished according to the type of income they receive (e.g. earned income, citizen's income). Public budgets can be divided according to tax revenue and type of subsidy into the federal, state and local levels.

Landlords' perspective: Comparison of relevant cash flows before and after refurbishment under current conditions