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Buying a property to rent out can be a sound investment decision, particular for investors prepared to take a long-term financial view.
The Amsterdam market, and other areas in the Randstad, offer good opportunities for owners looking to rent out properties. However, in order to avoid pitfalls and maximise returns, owners must be fully aware of the regulatory climate in the Netherlands. If you are considering buying a property to rent out:
The Dutch housing market is highly regulated and there are strict rules regarding how much rent you can charge for a property. Don't just assume you can charge a level of rent that will cover your mortgage costs - make sure of it! Hire a specialist to audit the property's current number of points and, if you will be renovating, to advise you on how to maximise points and what the number of points will likely be following renovation.
Perfect Housing works closely with external specialists who can provide an official points audit for your property (for a fee) and offer advice on where to focus renovation and refurnishing efforts to maximise the number of points.
Once you have determined the number of points your property will be awarded, you can more accurately understand what type of tenant you will be able to rent to, what rental price you can expect, the minimum rental price you need to cover your monthly costs and how potential interest rate changes may impact your return on investment.
Carefully consider the economics of your decision in light of market prices for your ideal tenant. Tenants won't pay over the odds because of your personal financial situation; they will only pay what the market dictates.
If you're looking to maximise the amount of rent you can charge, in addition to points, you may also need to consider location, furnishings and overall 'rentability' of a property. Properties in the best locations with the best furnishing can command top rents, but tenants will only pay for what they get.
The majority of our clients are professional expatriates, many of whom are on assignment in the country for limited timeframes. We also have relationships with a number of businesses and serve as their preferred corporate housing supplier. We would be happy to provide insights about what types of properties most appeal to these clients.
There are a number of exceptions within the points system, which a good specialist should be able to fully consult you on. As a minimum, owners should consider the following when looking for a property to buy for rental:
- Buildings classified as monuments receive 30% additional points related to the total points;
- Buildings classified as 'Beschermd Stadsgezicht' receive 15% additional points related to the total points; and
- House boats are exempt from the points system regulations.
Be aware that although the points system is a national system, it is most rigorously applied in Amsterdam. Dienst Wonen, Zorg en Samenleven .
Property investments rarely guarantee short-term gains, particularly given the current market climate. If you're buying to rent in order to generate a profit within a year, think again. If you're looking to gain financial advantage over a longer period, buying a property to rent in the Amsterdam or wider Dutch market may be a sound decision.
Perfect Housing is the biggest agency in Amsterdam and one of the largest throughout the rest of the Netherlands. We are professional and service-oriented, with a clear and structured rental process.
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