Investing in an investment property right now?
The corona crisis may still leave deep financial marks, but one thing is certain, we need to keep living. You can put off investing in an investment property now because you don't know what is coming, but there remains a shortage of housing.
There are several ways you can make your money pay off. Savings as one of the options falls away because savings rates are close to zero or even negative. Investing in stocks causes very fluctuating values of your assets due to the uncertainty in the market because of the corona crisis. Investing in real estate also carries risks, of course, but since you make returns in multiple ways, you can reduce the risk.
Uncertainty is already in the market
House prices are still stable or even rising further. This does not mean that the housing market is going to escape the crisis, but there is certainly no reason to panic. When buying an investment property, you can now take advantage of the uncertainty in the housing market. Even sellers do not know how house prices are holding up. This uncertainty makes for a better negotiating position when buying an investment property.
Reduced supply of owner-occupied properties favours rentals
Renting out the investment property allows you to make returns every month. Should the housing market do hit hard in the worst case scenario, the demand for rental properties will increase. After all, people who don't buy need somewhere to live. This will potentially make renting out the investment property much easier. Maybe even at a better price.
Real estate is a long-term investment
For short-term speculation, you should not choose real estate. This is partly caused by the costs you incur when buying a property. In the longer term, though, real estate has proven to be a good investment in recent years. A return above 10 per cent is no exception. When investing in real estate, you are opting for a good long-term return. Especially if you buy a property that you will split into flats or refurbish first. It is not important how house prices will develop in the coming months, what matters is the development of prices and rents in the coming years.
You can now finance real estate at a very low interest rate
You can get financing for the vast majority of the capital to be invested. We work together with lenders such as Domivest, NIBC and RNHB. These are reputable parties from whom you can borrow a large part of the purchase price of an investment property under good conditions. With the monthly rental income, you can bear the monthly expenses and also have a nice return on your investment.
Want to know more about financing an investment property? Our advisers can help you with financing. We have extensive knowledge about investment properties, in which we will be happy to take you along with tips and advice.
