The global real estate market has been greatly affected by the ongoing pandemic that's been disrupting our lives for the past year. In the Netherlands, the average purchase price for houses increased by 7.33% in the past year, nearly double when compared to the 3.66% growth registered in 2019. Despite this growth, demand for housing continues to be on the rise, with housing shortage in the Netherlands estimated to have reached 200,000.
While this may not be a good time to change houses, it sure is a great opportunity for people wanting to invest in buy-to-let properties. Not only will the property increase its value as time passes, especially given the fact that house prices are rising at an estimated 8.6% yearly, but you will also make some profit in the process. That's because an increase in housing prices makes people reluctant to want to invest in a new property, so they turn to rent until the market becomes more affordable or until they win enough money.
Starting 2020, expats can now invest in buy-to-let properties as well, although they need to meet some requirements for both commercial and residential properties. Provided that they meet certain conditions, expats can also request a mortgage to pay for the house.
If you are considering investing in the Dutch real estate market, we are here to help. Below, we will take a look at how you can invest in buy-to-let properties in the Netherlands as an expat, as well as provide some tips to make the process less complicated.
What conditions do expats need to meet?
We mentioned above that expats need to meet certain criteria in order to be able to purchase a buy-to-let property. For starters, you need to have been in the country for at least three years, working and living here. To be able to take out a loan, your yearly minimum gross income should not be below €45,000.
If you are looking to take out a loan, you should also keep in mind that banks won't provide the entire amount. Only a maximum of 70% of the total property value can be taken out in the form of a loan, so you will need to come up with some private cash as well.
Yet another aspect that needs to be addressed is the purpose of the property. You can only request a mortgage for properties that are going to be permanently occupied, meaning short-term rentals, as well as listing the property on Airbnb or other similar platforms is not allowed. When you fill out your taxes, you also need to mention you receive an income from renting your property to avoid legal issues.
These aspects need to be taken into consideration regardless of the property you are planning on purchasing falls into the commercial or residential category.
Finding the right neighborhood
Two of the most important things you need to focus on when buying a property that you plan on renting are neighborhood and surroundings. The type of neighborhood you should choose, as well as the available amenities, depend greatly on the purpose of the property. Let's explore what this means.
Taking residential properties as a first example, your potential tenants won't only look at how the house or apartment looks but also at the location and area. Are there grocery stores nearby? How about parks and schools? A family with kids will greatly appreciate having a good school close by or being able to take their kids to a nearby park. Look at the properties in the neighborhood as well. Are they mostly residential or commercial? Some tenants are reluctant to rent a place that is close to a big venue, as these locations are known for being quite noisy.
Take casinos, for example. While it is true that a lot of people have turned to online options, such as the best no account casinos in Holland due to the great bonuses and advantages they get for playing at online casinos, land-based venues are still attracting lots of players. This is why many tenants avoid having to live next to a casino due to the noise and agitation it may bring.
If you are looking to invest in commercial properties, land-based casinos may actually be your friend rather than your foe. Casinos attract lots of tourists, so having one in the neighborhood will bring more traffic to businesses nearby. Many people will remain loyal to online casinos, especially thanks to the perks they can get. But as experts from Bob casino one of the best online casinos point out, people will slowly want to go back to land-based venues, meaning traffic will start to increase in casino neighborhoods.
Aspects to keep in mind when purchasing a property
When purchasing a property, there are lots of factors you need to consider, and overlooking them may lead to costly mistakes. For starters, never buy the first property you see. No matter how good of a deal it is, don't rush into it before considering your other options as well. Once you are convinced this is the property you want, schedule a second visit and take the time to inspect it properly.
A new property is a big investment, so try to keep your emotions under control. The best thing you can do is contact a real estate agent and have them accompany you to house visits. They will be able to give you valuable advice and keep you from making a rush decision.
Make a point to study the market a bit and get familiar with the prices, as well as the demand and supply levels. This is especially useful if you are new to the country and want to understand the market better.
Last but not least, make sure to get the building inspected before signing the contract. There may be issues that not even the current owner knows about, which can end up costing you significant money, so it's better to know about them from the get-go.