Real Estate Report – February 2017

The month is almost over, so it’s time to for what I like doing most: calculating how much money we earned this month. Passive income that is of course! Without further ado, here is the Real Estate Report – February 2017.

Rental Income

It was another good month with no vacancies and all rents paid on time. Love it!

February 2017 - Real Estate Income
February 2017 – Real Estate Income

Rental Expenses

Expenses were a bit lower than anticipated as the maintenance and mechanical ventilation installation works were not able to be completed this month. Primary reason for that is that the economy is doing rather well in the Netherlands. In short, more people are spending money and contractors are busy. This was no different for our own contractor. However, we have (finally) been able to schedule the work for March 1. Mr CF will be helping out to keep the costs in reign.

Other expenses for the month are:

  • Interest costs (mortgage and loan)
  • Insurance costs
  • Property management costs
February 2017 - Real Estate Expenses
February 2017 – Real Estate Expenses

Real Estate Report – Overview

We made a total of €2.275 in net rental income for the month of February (granted, before taxes!). Our net-cashflow is a bit lower due to the mortgage payment (about €410 lower to be exact).

February 2017 - Real Estate Overview
February 2017 – Real Estate Overview

As noted above, we will be doing the mechanical ventilation installation in early March. But still need to find a date to install the moisture barrier within the outside wall. Perhaps in combination with the installation of a drainage system to keep groundwater levels down. It will depend on how much time our contractor will have for us within his busy schedule. But once the mechanical ventilation is installed, the moisture issues should already be reduced significantly.

We also still need to start work on the renovation of the outside walls for two of our properties. Have not had time to start the requests for quotation yet.

Do you have real estate? If so, how was your month? If not, are you tempted after seeing this report?

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24 Comments

    1. We been having a great winning streak, but there will be bills to pay later this year that will drag down the average cash-flow. That being said, it is now providing some nice cash to pay for those bills too (and leave some more to invest)!

  1. It seems very lucrative where you live. I saw your storm damage post. Aside from the unlucky, I couldn’t help but admiring the roof materials. It’s so fancy! That translates to you must have a Class A rental.

    Cheers!

    1. It’s definitely not as good as in the States! But if you take your time and be picky, you could find some good deals, that’s for sure.
      The roof is actually the newest item of the house, was replaced about 2 years back. It was done well by the previous owners (total expense of the new roof + insulation + solar panels: €25.000!). There is still lots to do on the home, it’s an old building, so maintenance is an ongoing item. But the overall state is pretty good.

  2. ‘We try to aim for a €100.000k property (all in) with rental income around the €800-850 mark.’
    I as wondering about your returns but above explains it pretty well. Impossible in Belgium. If you are very lucky you find something at 150K that gives you 800 euro rental income. But then you still have taxes to account for. All in all, I think rental could produce a 3% to 4% net return which just isn’t worth the hassle for me (I rather write some options). What do you think your net return on investment (after taxes) is?

    1. I’m not saying it’s easy to find such properties, but with a bit of elbow grease and some luck, it is certainly possible where we live. The overall return after taxes is likely around 6.5-7.5%. The big benefit for us is that the profit is coming in every month, which makes this investment option interesting for us (plus, it is very much tangible too).
      As for options trading, we got approval from the bank/broker, so we will start diving into that investment option too (pun intended). 🙂

  3. Nice to see the progress!

    I do have a question. How did you start with buying properties to rent? I can imagine it’s hard to get a mortgage if you have your own house with a mortgage.

    And why rental properties above investing in stocks?

    1. Thank you P2F.
      We got started under different circumstances. We used to live abroad and had a mortgage that we could plunder to buy our first two properties. We are currently looking into another investment mortgage (or personal loan) to buy another small property (putting down 25-30% or so ourselves and financing the remainder).

      Why real estate? Personal preferences, leverage, relative value stability and cash-flow. We like scouting for real estate, find renovations a challenge and we like the monthly cash-flow during FI. Return on investment is also good due to the ability to leverage your investment incombination with a mortgage. But it is far from perfect, that’s for sure!

  4. So you already have 5 rental units? Wow! Seems you are on a highway to FO 😉

    In a few months I am going to rent out my own apartment for a while, but I still think it is a lot of hassle how to do this. Inform the bank (my mortgage lender)? Keep my apartment in ‘box 1’ or move it to ‘box 3’? What kind of rental contract? Diplomatenclausule or Wet Doorstroming Huurmarkt? Next to that, the person who rents my apartment gets two cats on the side. So a whole different story 😉

    1. Yes, we have 4 residential units and one commercial. It’s going rather well 🙂 We are actually still looking for one more, but have not found the right deal just yet.
      My recommendation: don’t tell your bank (they will most likely say no, and then you have a real issue because at that time you really cannot rent it out anymore). Make it a box 3 investment (you still have income, so box 3 makes for better tax limitation). Diplomatenclausule: absolutely. But not sure if you can get away with it, depends on how long you are gone for. As for the cats, now that could be a challenge (or the complete opposite)!
      Best of luck.

    1. Funny you mention a short month, this actually does not seem to have much of an impact on the real estate side of things (all monthly expenses or incomes, so the number of days don’t seem to matter). But it does help on the savings rate for sure!

  5. Are you mostly in city areas or plurar areas? As far is i can see a 0.80% in city areas is already very diffecult to find. Especially in student cities. An appartment of 150k should go for 1200. That is magic i think at the moment.

    1. We have units in both rural and city areas. But I agree, prices in most cities don’t allow for a “1% rule” unit. Unless you get one at an auction and are good in (and have time for) renovations. We try to aim for a €100.000k property (all in) with rental income around the €800-850 mark. This is possible in places like Rotterdam, Gouda, Dordrecht, etc.

  6. That is awsome cash flow…!

    Question: how can you pay only 350 per month in mortgage? bullet loans? That could be a way for me to look at rentals again… very uncommon in Belgium I do think.

    1. Two units are mortgage free, three others have a mortgage and personal loan. Unfortunately, it is not actual cash-flow due to the mortgage, as we only count interest in the expenses. Actual cash-flow is about €400 lower. Still pretty good though!

    1. It is actually not that bad. Ventilation units are around €300-500, depending on model, remotes and sound levels. Installation is about 0,5-1 days each depending on duct work. We hope to have both units installed for €1200-1400 combined. They last for about 10-15 years.

  7. Nice real estate income as always! As you’re already quite experienced in Dutch rentals: do you believe that the 1% rule also applies in NL? I read a lot about it on US sites but my feeling is that property taxes in the USA has much to do with it and in NL it can be interpreted a bit more freely. What’s your view on this?

    1. It’s actually not bad to use it as a proxy, but it does in fact not completely apply to the lower end of the Dutch market (the 1% rule). Simply because of the tenant protection laws and systems (e.g. “sociale huurnorm” of €710/month) and the relatively high purchase prices at the moment. You have to look pretty good to find a 1% property (but it’s not impossible). We would take a 1% property if we could get our hands on one (and we can afford to finance). But generally we would settle for anything around say monthly rental income as 0.80-0.85% of the purchase price (including costs and renovations).

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