Freiham Is Delivering the Highest Rental Yields in Munich's Suburbs — and Investors Are Taking Notice

Freiham is posting gross rental yields of between 4.2 and 4.8 percent for buy-to-let investors — the highest of any Munich suburb tracked in the mid-2026 market cycle, according to data compiled by the Immobilienverband Deutschland (IVD) Bavaria division. That figure sits well above the city average of roughly 2.9 percent and marks a decisive gap between the western expansion zone and the saturated inner districts of Maxvorstadt or Schwabing, where purchase prices have long outrun rent growth.

The timing matters. Munich's rental market entered the second half of 2026 under acute pressure: average asking rents across the city passed €22 per square metre in May for the first time, driven by population growth, constrained construction financing and the continued failure of the Mietpreisbremse — Germany's rent-brake legislation — to suppress demand at the upper end. In that environment, Freiham's combination of relatively lower entry prices and strong tenant demand is producing a yield arithmetic that analysts are describing as the most attractive seen in a Munich suburb since Neuperlach's renovation wave in the early 2010s.

Why Freiham Is Different

Unlike speculative outer-ring bets, Freiham is underpinned by hard infrastructure. The U5 U-Bahn extension from Laimer Platz has been operational since 2023, slashing the journey to Marienplatz to under 22 minutes at peak. The Freiham Nord mixed-use development — a coordinated project between the city planning department and developer consortium GWG München — is delivering roughly 16,000 new homes across three construction phases, with phase two completions running through 2027. That pipeline means buyers entering now can still find new-build two-bedroom apartments priced between €480,000 and €560,000, compared to €750,000-plus for comparable stock in Pasing, just four kilometres to the north-east along the Würm valley.

The Westkreuz S-Bahn interchange is a five-minute bus ride from the core Freiham residential grid, and the planned Freiham Zentrum commercial hub — anchored by a new secondary school campus on Theodor-Heuss-Allee West — is drawing young families who cannot afford Laim or Sendling. Tenant turnover in the district ran at approximately 14 percent in 2025, below the Munich average of 18 percent, which translates directly into lower void periods for landlords.

The Numbers Investors Are Working With

A two-bedroom, 65-square-metre apartment purchased in early 2026 at €510,000 is currently achievable at a monthly rent of €1,750 to €1,900 in Freiham, market listings from ImmobilienScout24 show. Running those figures through a standard gross yield calculation — annual rent divided by purchase price — produces a return of 4.3 to 4.5 percent before management fees and maintenance. Net yields after Hausgeld charges and a standard property management fee of around 6 percent of collected rent typically settle in the 3.4-to-3.8-percent range. For context, comparable assets in Glockenbachviertel rarely break 2.4 percent net. The gap has widened by approximately 60 basis points since January 2024, according to IVD Bavaria's quarterly tracking index.

Financing conditions are a live variable. The European Central Bank held its deposit rate at 2.25 percent at its June meeting, and German fixed mortgage rates on ten-year terms are currently offered between 3.6 and 3.9 percent by major lenders including Commerzbank and Sparkasse München. That means cash-flow neutral or lightly positive gearing is achievable at Freiham price points with a 30-percent deposit — a calculation that remains impossible in most of Munich's inner postcodes.

Investors looking to act before phase-two completions tighten the supply picture should focus on blocks within 400 metres of the planned Freiham Zentrum tram stop on Hanns-Seidel-Platz, where foot traffic and amenity density will be highest by 2028. Working with a local buyer's agent registered with IVD Bayern and commissioning a full Baulastenauskunft — a search of registered land charges — before exchange is essential in a district where utility easements from ongoing infrastructure works remain live. The window of relative affordability in Freiham will not stay open indefinitely: once the commercial core reaches critical mass, the premium will move from yield to capital value, and the calculus for new entrants will shift accordingly.