Real Estate Report – October 2017

It is again time for the Real Estate Report – October 2017 edition. Still keeping the posts sort to limit the impact on my arm, but it is going rather well at the moment.

Real Estate Report – October 2017

Rental Income

Our rental income for October now well above the €3.000 mark due to some new developments. We have given out a €15.000 loan to another couple of Real Estate investors. They have used this loan to purchase more property. We get 6% interest on this investment loan, which is paid monthly. In return for this high interest rate the lenders have gotten a flexible repayment plan. Both parties are happy with the end result!

We also did have one unit rented for 1,5 days less due to the now tenant moving. Never knew the property manager could bill the new tenant for half a day! But hey, it works for us (half a day more than expected).

The monthly income overview is provided below:

Real Estate Update - October 2017 Income

Real Estate Update – October 2017 Income

Rental Expenses

The expense for October were high, mainly due to the massive property management costs. These are caused by the new tenant moving in. Expenses are one month rent + 21% sales tax. That hurts, but it’s still worth it for us as we did not have to lift a finger and we get a more favourable tax regiment.

Other costs are the usual mortgage, loan and insurance premiums. No maintenance required this month.

The expenses for the month are as follows:

Real Estate Update - October 2017 Expenses

Real Estate Update – October 2017 Expenses

Real Estate Report – Overview

We made a total of almost €1.425 in net rental income for the month of October (before taxes).  The net cash-flow will come in at around €1.000. Our total YTD net rental income for 2017 is now about €19.043 (before taxes), the associated net cashflow is around €15.000.

Real Estate Update - October 2017 Overview

Real Estate Update – October 2017 Overview

Real Estate Report – Forecast

We have just decided last night to not go for the 4-plex. Too many risks with the exit strategy and financing. Also still no confirmation on the renovations quote either (contractors are super busy right now, really annoying). We still might low-ball with an offer on the property, just to see what happens. Not expecting much.

On the other hand, we have been approved to become private money lenders via a real estate loan platform. The idea is that one party provides a loan to another party to finance (or re-finance) Real Estate. In return you get the first lien right (eerste hypotheek recht), all arranged via a notary public, and one heck of a interest rate (5.5-6.0% net per annum). These investment are for commercial use or to rent out as an investment property only. Personal use of the property is not permitted. 

What is the catch? The lender is allowed to repay as much as he/she likes at any time. In the worst case you get you money back within a year or two. This does not seem to happen in most cases, but it still happens. Minimum investments are €100.000 and a maximum of €500.000. I’ll write a more detailed post about this in the future. However, instead of buying overprices property right now, we are seriously considering expanding to this super passive RE investment opportunity. It almost even beats out the final overall net return on investment (after taxes) for the 4-plex! But with virtually no risks or efforts, very appealing.  

 

How is are you doing with your real estate ideas and leads?

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10 comments

    1. With time you will be able to, it might even be an option to generate more yield on your (future) properties! Just (re-)mortgage with a low percentage and reinvest with a high percentage in the loan! Free extra yield 🙂

  1. New rules would make it possible in Belgium to make 6.000 euro tax free via AirBnB. Waiting on the published law to know all the details but it might, just might, make in interesting to move a little bit into real estate investments in Belgium also! We’ll see how it turns out …

  2. Nice update, and still quite some moves!

    Too bad the 4-plex didn’t work out, but being a private money lender can be very lucrative. Looking forward to the post about it. Could be of interest for us in a couple of years or so (and some experience later).

  3. I’m really impressed with what you’ve got cooking here. I have to believe it’s a lot harder to pull off in Western Europe, where documentation, bureaucracy, and taxes are more burdensome than in the U.S.
    Curious what percentage of rent you pay for property management services there?

    1. It’s not too bad, usually 5-6% of the rent with a minimum of around Eur 45 per month. It’s the tenant selection that is most painful. Was reading your AirBnB cash-on-cash yield, that’s pretty impressive. That would be difficult to generate here, and even if you did, you’d pay a lot of taxes on that income!

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