Investing in real estate
Investing in an investment property or second home is currently a lot in the news. Interest rates are low, there is a large group of homeowners with an equity value on the house (house value is higher than the mortgage) and money in a savings account yields little. This makes investing in real estate a popular alternative and we support many new real estate investors in purchasing their first investment property or portfolio.
4 pointers for investing in real estate for rental
Accessibility of the apartment or house
In order to have the widest possible target group of potential tenants who want to live in your second home, one of the important things is to buy an apartment or house that has good connections with public transport to the main cities. In this way you ensure that, for example, someone who works in Amsterdam, even though your investment property is not located in the city itself, can still be at work quickly. Not everyone has a car, so even if it is obvious, this remains an important factor.
Rental price rating for a second home
Are you going to look at a property to buy as an investment to rent out? Make sure you also check the rental price based on the scoring determined by the Dutch government. If it is an independent home, the rent is linked to the valuation system for independent living space. The apartment or house must have a minimum number of points to fall into the "free rental sector", to be able to determine the rental price yourself. Does the house not meet the required number of points? Then there is a legal maximum on the rental price and the house will also be valued lower in the appraisal if it is intended for rental.
Things that are important for the rating are the size of the property (m2), the energy label, number of rooms, level of finish, location and more.
Include owners Association, taxes and other costs in the calculations
In addition to the purchase costs, it is also wise to consider the owner Association costs, contracts for maintenance of the central heating system, replacing the flooring per period, painting, building insurance, any financing costs, brokerage costs and real estate tax. In this way you ensure that you have a clear picture of the gross and net return and that you know exactly which amount you have to keep separate from the rental income to cover these costs.
Rental income taxed or untaxed
When purchasing a second home for rental, it is wise to be aware of the taxes. The capital, or the value of the home, is taxed in “box 3” as a capital and yield tax. Do you carry out work yourself with the aim of achieving more return than with regular asset management? Such as having specific expertise, searching for tenants, actively exploiting, maintaining, taking care of the administration, drawing up lease contracts, handling complaints, taking care of payments, screening, etc. The whole is weighed in an assessment by the government.
However, it remains subjective what work is actually judged as "active exploitation" with the aim of benefiting more than standard asset management. A difference of assessment per situation is possible here. When in doubt, we advise you to consult with a tax specialist about your own situation and to determine whether it is wise to outsource certain activities. Read more about a second home in box 3 here.
Investing in real estate
Are you starting with the investment in one or more houses / apartments? Feel free to contact us to discuss a first property you have in mind, or make an appointment.
We assist quick and accurate with a rental value indication for a property that you have in mind. This way you can calculate the expected gross and net return of the investment object.
Support in making your return calculation, so that you have a complete and realistic picture of the possible returns.
Perform rental price point analyses, indicative or, for example, for your own investment property, complete inspection including report.