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There is a lot happening in our Real Estate world, primarily good things fortunately. We are (very actively) looking at properties and found a couple that are interesting. Let’s therefore have a look at the Real Estate Report – August 2017.

Real Estate Report – August 2017

Rental Income

Our rental income for August is (again) above the €3.000 mark. There is one unit (Unit 1) that is also due for another (small) rental price update. We have let this one slip by accident and need to chase this one up shortly. We are also working hard to beef this monthly sum up to about double what it currently is, but more on this later.

The monthly income overview is provided below:

Real Estate Update - August 2017 Income

Real Estate Update – August 2017 Income

Rental Expenses

The costs for the month where the mortgage, personal loan and property management fees. That was it! “Cheapest” month on record. No insurance payments or property taxes were due this month. What a difference that makes. We also had not work done on the properties, so no maintenance costs either. I would like many more of these months 🙂

The expenses for the month are as follows:

Real Estate Update - August 2017 Expenses

Real Estate Update – August 2017 Expenses

Real Estate Report – Overview

We made a total of almost €2.444 in net rental income for the month of August (before taxes), a new record this year! The net cash-flow will come in at around €2.000. Our total YTD net rental income for 2017 is now about €15.743 (before taxes). We are now just about €500 shy of our target income for the year. But please remember that we are still anticipating a big bill in the coming months to pay for the outside restauration of two properties. This is assuming we get our act together and sort out quotes…..

Real Estate Update - August 2017 Overview

Real Estate Update – August 2017 Overview

Real Estate Report – Forecast

We finally got confirmation that our two tenants are leaving us. They have successfully bought their own place. The unit was put on the market the same day. A week later we had 7(!) viewings and yesterday morning agreed on a new tenant to move in. So no vacancy! Nice. However, this does mean new fees for the tenant selection….

For those of you that remembered our interest in German Real Estate investments (see here), we checked the tax implications and they are not favorable. We would be required to pay income tax, which boils down to 20-25% of the net profits. That’s a lot!

On the searching front, the property we looked at with 12 units has too much risk associated with it. We could get the numbers to work (was relatively good actually), but we could not get the exit strategy to match. There were also some permit concerns that were vital for this one to work. In short, we thanked the broker for the time and efforts and we moved on to the next……3 options.


Option 1: simple 70m2 condo. Reasonably priced, so we thought, but after the viewing earlier this week decided against it. Too much work to be done, lots of cracks in the walls. Partial bathroom remodel required. Kitchen needed professional cleaning (grease everywhere) and tile replacement. No time for this right now, getting a contractor would be too expensive and will impact return on investment. We walked away. Was potentially a 850 per month unit.

Option 2: Triplex with 3 very large units (+100m2 each). Have a scheduled visit tomorrow. Promising on paper, nice photos, good neighborhood but not the best rental market (i.e. not a large city with ditto companies). However, we are very interested to see where this is going. Current estimate is about 3.000 month in rental income if successful. Would also be cash-flow positive from day one. Friday update: what a disappointment…… make a detailed calculation to figure out the renovation costs to get it into rentable state…..€100k. That either means a lot lower purchase price (doubt that) or we need to walk away. Afraid it will be the latter. Bummer!

Option 3: House along a dyke (already looked at it last weekend). Currently 3 units with option to make it into 4. Large yard with two storage sheds (with potential to convert one into another unit). Requires extensive work, need to build two bathrooms and one kitchen. It also has a dated interior, which would require some upgrading. Potential rental income is also about 3.000 per month (for 4 units). Big upside: its cheaper than option 2, even with expected renovations (including safety margin). But the big downside is the amount of work. Time to book a viewing!

We are having so much fun! 🙂


How about you, any interesting news to share? Any recent purchases or issues? Let us know

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Wait, don’t run away screaming because the posts title states “Taxation”. This one is interesting (for the Dutch at least)! As you might be aware, we currently have all our Real Estate being taxed in Box 3, to benefit from the most favorable taxation option. However, if you would to purely FIRE on Real Estate in the Netherlands,  which taxation options is best? Our post today will try to shed some light on this. We present to you Dutch Real Estate: Taxation Options.

Disclaimer: we are not tax professionals and this is only our interpretation of the tax code. Consult a specialist if you want to make sure the tax approach is best your situation!

Dutch Real Estate: Taxation Options Introduction

As noted before, the Dutch tax system is quite complicated, but also gives you various options to manage the taxation of your Real Estate. It all depends on what you want to achieve and how actively you want to participate in your Real Estate. For today we will look at 3 taxation options:

  • Taxation of Real Estate income in Box 1:
  • Taxation on Real Estate when incorporated, with Box 2; and,
  • Taxation of your wealth in Real Estate in Box 3.

Let’s have a more detailed look at that the different options would entail. Note that the general deduction (Algemene heffingskortingen) should be the same for Box 2 and 3 options. It is subject to your income for Box 1 and therefore varies.

Real Estate with a pool

Real Estate with a pool

Box 1 Real Estate Income Option

First off, in principle the government almost always sees your Real Estate as wealth under Box 3. However, and this is where the tax law gets a bit fuzzy, when your Real Estate ventures (buying, sell, renting out) start to resemble “an active business”, the income is taxed as if you “work”. In this case your Real Estate income would be considered under Box 1. For the Dutch among you, this is a good post with some clarifications.

However, for this assessment we assume you actively manage your properties (assumed as long-term rentals) and that taxation is similar to the short-term rentals (think a B&B, AirB&B and similar situations). The taxation in this case is based on the net income you make from the property. You will have to report 70% of this net income, over which you will pay income taxes and social insurance premiums.

2018-08-18 Update: for actively managed (including AirBnB/etc.) rentals of an investment property, you might actually be required to add the total net income to your Box 1 taxes (not just 70% calculated as in this example, which applies to short term rentals of you own home only!).

Box 2 Real Estate Dividend Option

Another option to deal with your Real Estate is to incorporate into a business. In this case you can manage the properties anyway you please. You can also use the depreciation of the buildings and pretty much all other costs to limit your profit (and thus taxes). On this profit you will have to pay 20% tax (flat rate). Whatever is left, you can pay to yourself as dividend, which is taxed at another 25% (flat rate). In short, your net profits are effectively taxed with 40%.

We have actually incorporated before when we were still living abroad, because at that time it was an interesting option to limit our overall tax burden. However, you have to be very careful with this option. Here is why. There is a “ter beschikking stellen” clause in the dutch tax code. This means that if you loan money to your own business, you have to report income on this loan under income taxes (Box 1). If you already have paid employment, this taxation could be as high as 52%!

The interest rate your company pays on your loan also has to be conforming to market rates. You are not permitted to charge excessively high interest rates or no interest at all. In the later case the tax man will assume an interest rate for you and will tax you on it… be warned. Considering market conforming rates are currently in the order of 3-6% (-isch), you would only net 1.5-3% on this loaned money after taxes. Not very appealing!

Box 3 Real Estate Wealth Option

As noted in the introduction, and as also explained here and here, Box 3 taxation is based on your wealth. For Real Estate purposes this wealth is calculated as the government assess property value (WOZ) times a factor that is based on the rental income. If you have a profitable property, this percentage is usually 85%. Next, you deduct all your mortgagee and loans, which leaves you with your net “wealth” for tax purposes.

Depending on your wealth, various taxation percentages apply. Note that, in order to be qualified for Box 3 taxation, you will need a property manager that takes care of the rental property for you, as this investment has to be “passive” (read: no “work” required).

Real Estate

Real Estate at Sea

Assessment Assumptions

Now, let’s compare the 3 taxation options to see which one is best to FIRE purely on Real Estate in the Netherlands.

We have assumed the following for a single person:

  • Property market value (4 units) €500.000
  • Properties WOZ value (4 units) €450.000
  • Yearly rental income (gross) €50.000
  • Insurances: €1.500
  • Maintenance (3% market value): €15.000 (assumed primarily done by external parties; equal amount spend each year)
  • Property Taxes, sewage, garbage, etc.: €2.500
  • Property Management (tenant selection): €1.600
  • Property Management (monthly fees): €3.000
  • Marketing Costs (€50/month): €600
  • Yearly business expenses (year end statement, accountant, etc.) €1.000
  • Building Depreciation (2% per year, building value €300.000): €6.000

For this example no mortgages are taken into consideration. If you want to see how this work for you, include the interest as an expense for the Box 1 and Box 2 options. For Box 3, correct for the mortgage value. Simple as that.

Tax rates and social insurance premiums for 2017 are used for the calculations. Utilities are assumed to be paid by the tenants. We have kept costs for insurances, property taxes and maintenance the same for all options.

Box 1 Tax Results

For this assessment we have assumed we need about €600 per year in marketing costs for the various units when they become available on the market.

Based on the assumptions above, the Net Income is about €18.937. This could be improved a bit if you do some of your own maintenance. Do realize that for every euro reduction in expenses, you only earn about €0,5 back in net income due to taxes and social insurance premiums.

Also note that if you start to earn more, the tax burden also increases as income tax is progressive (from 36.55%, all the way up to 52%).

Dutch Real Estate: Taxation Options - Box 1 Income

Dutch Real Estate: Taxation Options – Box 1 Income

Box 2 Tax Results

We have had several people question why we don’t incorporate. This is why! The net income you can withdraw from a company (in the form of dividends), after paying profit and Box 2 dividend taxes, is lower then if you manage the property yourself (at least for this scenario). The total net income comes to only €16.294. But you will have another €6.000 in the company to use for investments.

The main reason is the depreciation of the building, this money will be available within the company as cash, but cannot be withdrawn! It’s considered a reserve, not profit, so you cannot pay it to yourself as dividend. The money will be available for future investments though.

There are some other reasons to incorporate obviously, of which a big one is the ability to limit personal liability. Incorporation might still be appealing for certain people and situations, but you really need to do your homework here.

Note: you still have to perform work at the company as you actively manage the properties. If you work for the company you also need to pay yourself income (which comes in Box 1 for tax purposes). However, for simplicity reasons, this has not been taken into consideration. If you would, the profit, and thus the available dividend, becomes smaller. You would get some of this lost income back via Box 1 income. We are also assuming you don’t pay yourself the minimum Major Shareholder amount (which is €45.000 per year), obviously.

Dutch Real Estate: Taxation Options - Box 2 Income

Dutch Real Estate: Taxation Options – Box 2 Income

Box 3 Tax Results

This leads us to Box 3 Real Estate investments, which clearly is the winner with the lowest taxation and thus the highest net income at €23.178. Even with the additional costs for a property manager (in terms of both selection fees and monthly fees), you are still better of from a net income perspective. This is a double bonus, as you don’t do any of the work and still get more at the end compared to Box 1 and Box 2 investing. How good is that?

Dutch Real Estate: Taxation Options - Box 3 Income

Dutch Real Estate: Taxation Options – Box 3 Income

Discussion and Notes

We did some more calculations for higher incomes too. We made the same calculations for a €1M Real Estate portfolio for a single person. This showed exactly the same results; with Box 3 investments outperforming both Box 1 and 2 by a healthy margin. If you are a couple and you have a €1M Real Estate portfolio, you can even benefit more as you can split the income or wealth and limit your taxes that way.

Now, the above is simplified obviously, as it is rather difficult to compare the three options due to all the requirements and options/limitations. Have a look at your personal situation to find out what works best for you!


Based on the above assessments and assumptions, you are best off getting a property manager and maintain all your Real Estate investments in Box 3 for tax purposes. We are planning to do the same. Best of luck!


Does this provide new insight to you? Have I missed anything critical? Did I make an error somewhere, please do share!

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Austria - Castle

Here is the Real Estate Report – July 2017. Nothing much to report, still be slacking on the outstanding work, too busy with life and there is no urgent motivator either. Not good, but such is life. Still, a rather nice RE income this month for sure!

Rental Income

Our rental income for the month is now officially above the €3.000 barrier with the rental increase completed for one of the units. One more unit is due for a rental increase (should have been done per July 1), need to get this done ASAP. The other 3 units will remain the same for a while.

The monthly income overview is provided below:

Real Estate Update - July 2017 Income

Real Estate Update – July 2017 Income

Rental Expenses

The main costs for the month where water/sewage and garbage removal fees. Another significant expense was the quarterly payment of the various insurances. The interest expenses were the same, so were the costs for property management.

The expenses for the month are as follows:

Real Estate Update - July 2017 Expenses

Real Estate Update – July 2017 Expenses

Real Estate Report – Overview

We made a total of almost €1.896 in net rental income for the month of July (before taxes), a bit down from last month. The net cash-flow will come in at around €1.500. Our total YTD net rental income for 2017 is now about €13.298 (before taxes). That’s a lot of money!

Real Estate Update - July 2017 Overview

Real Estate Update – July 2017 Overview

Real Estate Report – Forecast

Stil no confirmation on the tenants moving out, they are awaiting their final approvals for loans/mortgages. But we still are anticipating them to move out. Too bad, nice couple and good tenants.

We had actually submitted an indicative offer on 5 rental properties, but the seller was not budging. Therefore no deal here, too much risk for the current asking price.

We have also requested more information on another property which currently has 12 units and shared kitchen/bathrooms. It appears interessting, but has (the usual) issues with permits and the potential for a large amount of outstanding maintenance. It does have the option to be upgraded to 16 units, which is good. Asking price per square meter is also reasonable. Still more work to be done here.

And, as noted here, we are also keeping an eye on potential German investments, but we have to sort our some taxes questions first.

Opportunities still exist, but it currently takes quite a bit of effort to find the one for us. Almost considering diverting the funds to other investments….


How is your RE life going? Any fun news to share?

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Investing at the neighbors - Learn German

When house prices rise so rapidly, various areas suddenly become (relatively) unattractive from an investment perspective. This also applies to our own local area and, realistically, most of the western portion of the Netherlands. Can you still invest in Real Estate, of course, but the ROI will be less favorable. What do you do? You start to look at investing at the neighbours: you start to look at Germany!

Investing at the Neighbours

We are still looking for the next Real Estate opportunity, but we noticed that we are much pickier this time around. Why? Because we want to make sure we get the best bang for our buck (well, Euro that is). This will likely be our last (big) purchase for quite some time, so we want to make it count. With the rapidly rising house prices in the Netherlands it is becoming much more difficult. There are still quite a few RE investments to be purchased, but the cap rates/ROI are “dropping like a brick”. Or we are just bad at finding the right deal, which could also be true.

Investing at the Neighbors - German Real Estate

Investing at the Neighbors – German Real Estate

A couple of weeks back we thought we have found our opportunity for 5 rental units, but this fell through on the price. We ended having a difference of €15.000 between our highest offer and the seller’s bottom price. Considering several unknown risks (condo board issues, tenant modifications to the units, backlog in maintenance, etc.) we decided to move on. We are willing to take some (calculated) risks, but this was too much.

In the following (continued) search for properties we browsed many RE investment and house sites. At some point I bumped into a section on investing in Germany. Considering we could not find anything to our liking in the Netherlands, Germany suddenly appeared interesting. You can find one of the many overviews of German properties here: (Dutch only).

However, we had many questions, as we are unfamiliar with this RE market. Time to start looking around for some answers.

The Basics

The German property market is, to a degree, very similar to the Netherlands. Property prices are on the rise, mortgage rates are low, rents are high and tenants are well protected. Some of these items are good, some not so much. However, for the investor there are some interesting differences.

In Germany there is a so-called “kaltmiete” and “Warmmiete”. With “miete” being “rent”, you probably can figure out that “kaltmiete” is the pure (“cold”) rent of the property and “Warmemiete” includes items such as certain utilities, condo fees, building management fees, etc. Now this is also where it gets interesting, as you as the landlord can apparently include quite a few things into the “warmmiete”, such as building insurance, property taxes, waste and sewage fees, building management, cost for common areas and snow removal costs (not only for a condo, but also for a house).

This is considerably different from the Netherlands where various of these items cannot be transferred to the tenant, they are indirectly (and only partially!) included in the rent. But this also means that the expense for you a landlord are higher, which weighs on your return on investment. In short, German RE yields appears to be similar on the surface, but when diving into it, the yields are actually a bit better due to a shift in expense to the tenants.

There are however 3 things you cannot include in the “warmmiete”:

  • Property management fees;
  • Maintenance cost, and,
  • Income taxes (go figure ;-).

When managing a property from afar, you will need a property management firm obviously. Rates appear to be very similar from what we are used to back home. One item is far more expensive in Germany, which are the closing costs. Depending on where you buy in Germany, the total closing costs range between about 10-15% of the purchase price. This is primarily caused by higher land transfer taxes and costs for the realtor.

Investing at the Neighbors - German Real Estate - Castle

Investing at the Neighbors – German Real Estate – Castle


Now,  rental income from various German properties does appear to be appealing, but then taxes have not been paid yet! We don’t know much about German taxes. It was therefore time to talk to some experts, so we reached out to Mr. and Mrs. W from They lived in Germany for the longest time and currently own 6 properties that they rent out. They have relocated to Romania and are technically FI on their Real Estate investments.

We had a great call for nearly 2 hours on Friday night about German RE and FIRE in general, which was great fun indeed. We also got some interesting tips to check out. However, there is lots more to discuss and we are still to setup another chat to continue the discussions. Thanks again Mr. W for your time, much appreciated!

In the Netherland you have to pay wealth tax on your RE investments. This is a rather favorable system in the sense that you can keep your tax bill limited (you can use your debts/mortgages and the assessed value of the property in rented state to limit your wealth and therefore taxes). But when investing in Germany, it appears you will have to pay source taxes. The system in Germany is different and income from RE investments is considered under income tax, for which the tax rates are much higher (starts at around 10% and goes up to 40% in steps).

Because our primary country for tax purposes is not Germany (but the Netherlands), there is also no tax exception on the first €8.500 p.p. In short, we would start to pay taxes on every (net) euro we would earn from RE investments. There is a tax treaty between Germany and the Netherlands, so we might still be able to limit/avoid double taxation. That being said, we have lots more homework to do here.

Other Items to Consider

There is definitely some work to be done on the taxes side of things, but there are also some other things to consider (good and bad):

  • The properties are not “around the corner”, you need to manage them from afar (added risk);
  • Our German is not that great right now, so the language barrier plays a part too (added risk);
  • Finding a good property management firm that you can trust is a must (difficult);
  • Local by-laws and their implications;
  • How do the tenant protection laws work in Germany (added risk);
  • Insurances, currently we don’t know if they are similar to the Netherlands, in terms of coverage and price;
  • You might need to make the occasional trip to Germany to check out the property (yeah, holiday opportunity too!);
  • You will need to make sure contractors are not screwing you over for renovations and/or repairs (ties in with note above on management firms);
  • The property purchase costs are relatively low per square meter, however, this also means that you will have to consider a higher maintenance budget per property (i.e. a higher rate than say 2.5-3.5% of the property value). For example, you can buy a large house for €250.000-€300.000 (with 8 rental units), which is in good condition. In the Netherlands you might make a maintenance reservation of say €6.500-7.500 per year. But with a large German property with 8 kitchens, 8 bathrooms and a large exterior surface, this reservation is likely too low. Especially since labor and materials cost are about the same in Germany as in the Netherlands. Again, some homework is in order to find out what is appropriate.


How about you? Have you been triggered to consider (RE) investments beyond your borders? What do you think about our ideas? What have we missed?

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Austria - Castle

It is the end of the month again, so it is time for the Real Estate Report – June 2017. It was a rather uneventful month (yay!), but we have to start focussing (and acting) on some of the longterm maintenance items remaining for the year. Tradesman/woman are hard to find during the summer in one of the best economic years in a long time. Fall will also becoming around quicker than you think. Time to step it up and finish the required works!

Rental Income

Sorry for the boring story here, but still the same tenants, same income and all on time again. We will shake it up in July when there is one rental income increase (the €250 for Unit 3 will go to €275). This will boost our rental income to well €3.000, which just looks really cool on paper.

The usual income overview is provided below:

Real Estate Update - June 2017 Income

Real Estate Update – June 2017 Income

Rental Expenses

As already noted in the introduction, no maintenance works have been performed (or paid), so expenses are minimal this month. It’s just the usual suspects and a small amount of water management/sewage fees. 

The expenses for the month include:

  • Interest costs (mortgage and loan);
  • Property Water management/Sewage fees/Taxes; and,
  • Property management costs.
Real Estate Update - June 2017 Expenses

Real Estate Update – June 2017 Expenses

Real Estate Report – Overview

We made a total of almost €2.303 in net rental income for the month of June (before taxes), our best month to date! The net cash-flow will come in at around €1.900. Our total YTD rental income for 2017 is about €11.401 (before taxes). We just crossed the 5 digit mark in net rental income, sweet!

Interesting note, if we look at our core expenses and the average net rental income for this year so far (~€1900 – assuming no taxes), we would be technically be FI! Unfortunately, from a cash-flow perspective we are not. Nor does this average net rental income correctly reflect reality. For that we need about a 10-20 year period within which we see a correct reflection of longer term maintenance items and turnover costs/vacancy effects. The shown net rental income should in fact be reduced with a long-term maintenance allowance. In short, we still would need more properties to become FI (or somehow drastically reduce our expenses, which could be done by moving outside the Netherlands).

Real Estate Update - June 2017 Overview

Real Estate Update – June 2017 Overview

Real Estate Report – Forecast

There is also some bad news, one of our tenants have let us know they are trying to buy a house and hope to move out in October. At that point they would have been living there exactly one year and are free to move on. This is rather unfortunate as they are a very nice couple and take good care of the place. So the search for new tenants by the property manager will be happening in September most likely.

We are still actively reviewing other properties and have actually submitted an indicative offer on 5 rental properties. The submitted price is very low as there are some risks associated with the rental units, which include an administration and year end statements that are still to be approved. The inside state of the properties is moderate, so we could see replacements of kitchens and bathrooms.

Another risk, albeit less of an issue for the coming decade is a somewhat stagnant rental price. Why is this a smaller risk? Because the potential return on investment is so high, that we could add another property to compensate for the stagnant rental income, inflation and associated increase in expenses. It’s a calculated risk. Will see what happens!


How about you? Any RE investment plans? A good (or bad) story to tell? Let us know, we’d love to hear from you!

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Perhaps I’m wrong, but most bloggers are probably more organized than I am. I don’t hold a buffer of posts that I can use when I lack inspiration. This often leads to last minute writing (with associated typo’s and spelling errors, sorry!). So, without pre-planning this week, it will hereby turn into “Real Estate Investing Week” at Cheesy Finance. What’s up with the click-bait title, I can hear you ask? Well, it might actually become a reality in the (distant) future. How do we think we can get to €100.000 Rental Income? Let’s review!

€100.000 Rental Income - Pretty Picture

€100.000 Rental Income – Pretty Picture

Current Situation

As you might be aware, we currently have 5 rental properties and a house of our own. The market segment we prefer includes properties around the social housing norm (defined as a €710/month limit; rents below this limit are determined by a point system here in the Netherlands). The main reason is the relatively large market available, e.g. there are many people that could afford these properties. This makes it easier to rent out these properties and keep vacancy rates low. So far, this has worded out well. The downside is that the tenant turnover is a bit higher. It’s a trade-off we are willing to accept.

We also have one commercial unit, which holds a artisan workshop. This is not our preferred market, but this opportunity presented itself and we took advantage of it. In the future this unit will be rebuild into a residential unit, which will allow a higher monthly rent and a better return on investment.

The Near Future

It probably is not a surprise to you that we are actively looking to expand our Real Estate holdings. We are currently investigating financing options and properties to see if we can expand our rental income. One option we are actively reviewing is a portfolio of 5 units. The yield is pretty good, but there are some other risks associated with this opportunity. This includes limited increase/stagnant rental income and requirements for urgent maintenance/upgrades of bathrooms/kitchens. But if the purchase price is right, this might not be a major concern. Only time will tell if this will become the right investment for us.

€100.000 Rental Income – Real Estate Financing

€100.000 Rental Income

Now, how do we get from where we are now (~€36.000/year RE income) to €100.000 rental income? Well, it’s something like: “go big or go home” 😉

Firstly we have to do two things with the existing Real Estate: convert the commercial unit and split of our existing house. The idea is to upgrade the workshop to a residential unit, this will probably costs us as much as €75.000 (could be €100.000, subject to work required). We also want to split our current home into two rental units. The costs for this are estimated at €50.000 (new kitchen, heating system, bathroom and partitions + municipal fees and any required works). This would add two rental units to the portfolio and increase income for one. Not unimportantly, we also will need to move 🙂

Secondly, the purchase of the portfolio of 5 units needs to be successful. We have no guarantees at this stage but will keep you updated on developments. Depending on how things go, the direct out of pocket costs for this Real Estate portfolio are about €100.000-125.000. This would mean we have to sell our Dutch dividend shares, sell our ETF portfolio and use most of our cash reserve.

Property Value and Financing

Based on our estimate of the value of all properties combined, we would be in the 7-figure territory. That is a lot of money! See below for a summary of what we believe (and know) the properties should be worth (market value):

€100.000 Rental Income - Property Market Value

€100.000 Rental Income – Property Market Value

Looking at this, we are going to need a lot of financing! This will also cause us to be quite leveraged with this Real Estate investment. Partially this scares the crap out of me! But when looking at the numbers (positive cash flow) and our experience from the last few years, it certainly is possible. A (conservative) estimate of the total financing we need (via investment mortgages and perhaps even personal loans) is shown below:

€100.000 Rental Income - Financing per Property

€100.000 Rental Income – Financing per Property

Right now, our own investment would be about €390.500. This is assuming that everything happens “tomorrow”. This is not the case, as this will take us several years to realize. Realistically, about 4-5 years at a minimum! During that time, principle payments would have increased our “investment value” at bit.

Rental Income

Using the existing rental income, and the estimated rental income of the renovated/upgrades units, we estimate the following:

€100.000 Rental Income - Rental Income

€100.000 Rental Income – Rental Income

This should be a realistic estimate, but could vary slightly depending on market conditions. If the economy does well, this should be very much doable. If we get another crisis/recession (and we will), we might temporarily get a bit less.

Operating Expenses

As noted above, assuming all this happens “tomorrow”, the expenses would look like this (rough estimate):

€100.000 Rental Income - Rental Expenses

€100.000 Rental Income – Rental Expenses

The expenses includes interest costs, property management, building management, insurance, maintenance reservations and property taxes.

Obviously we won’t be able to make this happen “tomorrow” as we simply don’t have that much money nor the ability to get all financing at once. This is therefore a conservative approximation, as over the coming years we pay down principle and the effective interest expense will go down.

Personal Taxes

Because all these investments will be considered wealth, the investments will be taxed in “Box 3“. In this case the tax burden (assuming the investment is done “tomorrow”) will be €1.704. The calculation is as follows:

  • Total assets are €1.070.000 (estimated market value)
  • Total assets corrected for being in “rented state”: €909.500*
  • Combined debts are €679.500
  • Net Wealth for taxes: €230.000
  • First €50.000 of wealth is not taxed (for a couple like us)
  • Next €150.000 is effectively taxed at 0.86%
  • The final €30.000 is effectively taxed at 1.38%
  • Leading to a total tax burden of about €1.704
€100.000 Rental Income - Personal Taxes

€100.000 Rental Income – Personal Taxes

*: note that we currently don’t know what the property municipal assessments (WOZ) would look like for this portfolio. This assessment is critical as it determines the value you have to add for your personal taxes. In rented state you have to use between 45% and 85% of the assessed value of the property. This percentage depends on the “yearly rental income” over “WOZ value” ratio (see here, Dutch only). We assume 85% for our scenario. This translates into the fact that the “total assets in rented state” is likely an over estimate. This as we used the market value at 85% and not the WOZ value, which generally is (much) lower.

Interesting note, if all mortgages and loans are paid in full. The total tax burden on €909.500 would be €11.082 per year (for the 2017 tax year). This is an effective tax rate of 1.22%

Net Income

So what are we left with at the end of the day? Based on the above we have the following:

  • Income €100.320
  • Expenses €67.448
  • Net income before personal taxes €32.872
  • Personal taxes €1704
  • Net income after personal taxes €31.168

Now that is more then enough to become FI for us! It would even give us about €6K more in travel allowances per year, yay 🙂

Note that taxes in this case are only just 5.2% per year! This will obviously rapidly climb as the properties are being paid off and your wealth is increasing. For example, as noted above, the taxes are €11.082 if you have no mortgages/loans. In this case the expenses would drop about €17.000 (2.5% interest on €679.500). Your net income before personal taxes would increase from €32.872 to about €50.000. In this case the tax burden would become about 22%. In that case you are left with about €38.900, that is more than enough for FI in the Netherlands!


How about you, are you interested in real estate investing? What do you like about it? What are you afraid of?

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Austria - Castle

Last weekend we had our 3rd BENL (Belgium – Netherlands) FIRE meet-up in Utrecht and it was a blast! We had a total of 28 people show up to talk about money and freedom for the day. Many people we had never seen before, you got to love internet finance dating for strangers! We are pumped to do this again later this year and plans are already being made for that meetup. As part of the meetup I also did a short presentation: Real Estate investing – a Dutch Case study.

A slightly shorter version of this presentation is provided below. It includes some additional comments based on the feedback during the meetup. Note that this presentation is to provide some basics for property research and selection. It therefore lacks details! If you are really interested in finding the right property for you, additional detailed assessments are required. Such include risk assessments, investigation into the state of the property, taxes, a maintenance plan and more.

Property Screening

The first step into Real Estate investing is high level property screening. For this we use several sites to find properties that match our search criteria. Typical sites in the Netherlands include and If you leave outside the Netherlands, do your search for your applicable sites, which should be easy (i.e.,, etc.).

Real Estate Case Study - Screening

Real Estate Case Study – Screening

Property Selection

Before you can make your property selection, you need to know what you want! Do you want commercial or residential rental unit? If residential, do you want a house, townhouse, condo or even a house boat (for Airbnb rentals).

Real Estate Case Study - Property Selection 1

Real Estate Case Study – Property Selection 1

Once you know what type of property you want, the next will be to look for one. You will have to select on price, location and the general state of the building/property. The latter is important as it affects the sales price. If you are handy and have time, a fixer-upper could be a good one. But if you are not, you should look for something that is ready to move in, but well priced.

Real Estate Case Study - Property Selection 2

Real Estate Case Study – Property Selection 2

The Condo Case Study

For this Case Study I ended up selecting a condo unit in Rotterdam, the Netherlands. This property looked appealing, some maintenance to be done in the bathroom, but generally in pretty OK shape. Price was reasonable too, but not spectacular. A perfect case study!

Real Estate Case Study - The Condo

Real Estate Case Study – The Condo

The Expenses

The first thing to look at are the expenses. We start with looking at the purchase expenses. These include costs for purchase, transfer taxes, notary and financing. Additional expenses could include urgent renovations, which are not assumed here. Please note that we assumed that there is some negotiation space for the price too (i.e. the lower purchase price)!

Real Estate Case Study - Expense Calculations 1

Real Estate Case Study – Expense Calculations 1

The next thing to look at are the monthly expenses for running the property. These include property management, insurance, maintenance, building management (i.e. condo fees), taxes and sewage fees. Because this is a condo, we only include about 1% for the maintenance reservation (otherwise it usually ranges between 2.5 and 3.5%). This allowance is to be used for kitchen and bathroom replacement, and any other things like flooring, lights, etc.

Property Management fees are included due to their tax advantages in the Netherlands (which makes this investment an Box 3 investment, rather than Box 1 income!). We also like the risk management side of things, as these guys have more screening tools than we do.

We included monthly fees and the selection fee (one month rent + VAT @ 21%). The latter is spread over 2 years (i.e. we expect new tenants every 2 years), which is slightly above average in this market segment.

Real Estate Case Study - Expense Calculations 2

Real Estate Case Study – Expense Calculations 2


We assumed we needed financing, so added an investment mortgage of €70k with an interest of 3.85% (5 year term). You might be able to get something cheaper, but will depend on your personal circumstance and other assets you may have.

We quickly calculated the total yearly mortgage costs and the cost of interest only. If you add that to the above expenses, you get the numbers at the bottom of the slide below. For cash-flow the maintenance reservation is not taken into account. As you won’t pay this every year, but likely in lumps  every couple of years. You may decide to do this differently when you are looking at a house. In which case you have yearly heating unit maintenance, for example.

Real Estate Case Study - Expense Calculations 3

Real Estate Case Study – Expense Calculations 3

The Income

Now the fun part starts, the money coming into the bank account! We normally use 3 scenarios for screeing purposes, so get some feel for the spread and associated cash-flow scenarios. These scenarios are based on 12 month occupation (best case), 11 months (base case) and 9 months (worst case). Albeit it should be noted that it could be way worse! For example if a tenant does not pay and you cannot evict due to strict tenant protection laws.

Real Estate Case Study - Income Calculations 1

Real Estate Case Study – Income Calculations 1

Now the next step is to find out net income, so after the expenses shown in the previous paragraph. When you do, this is what  you get:

Real Estate Case Study - Income Calculations 2

Real Estate Case Study – Income Calculations 2

Not bad, even in a worst case scenario you are still cash-flow positive! Well, at least you are close to breaking even, because utility costs are not included in the expenses for the 3 months you do not have a tenant. As a landlord you are responsible for these costs at about €15-30/month (subject to usage and utility rates).


So what does this all mean in terms of yield on your investment? The shown yields are not really great to be honest, especially considering the risks you take as a landlord. You kind of what to have a cash-flow yield around 8-10% in this leverage scenario. In short, you either have to get the property for less. If you cannot, you have to walk and look for something else.

Real Estate Case Study - Cash Flow Yields

Real Estate Case Study – Cash Flow Yields

In the ultimate scenario, when all the mortgage is paid off, you get the following (2017 price level: no inflation correction):

Real Estate Case Study - Ultimate Yields

Real Estate Case Study – Ultimate Yields

Not great yields, but your cashflow is likely about €4.5-5.0K average per year. With about 7 of these, and wealth taxes included, you would be FI!

Disclaimer and considerations

Some important assumptions and considerations apply to this simplified calculation, and its results:

Real Estate Case Study - Other Considerations

Real Estate Case Study – Other Considerations

If you have any questions, do leave a comment!


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Already the last post of this month. Man, time flies! It was a fun but busy month. So let’s quickly have a look at the Real Estate Report – May 2017.

Rental Income

Still no surprises here, same tenants, same income, all on time again! The usual income overview is provided below:

Real Estate Update - May 2017 Income

Real Estate Update – May 2017 Income

Rental Expenses

As you can see below our expenses were quite high for the month, this was as expected due to taxes/sewage fees due and the maintenance bill. It cannot be unicorns and rainbows all months 🙂

The expenses for the month include:

  • Insurance (for buildings and liability);
  • Interest costs (mortgage and loan);
  • Property Taxes/Sewage (3 out of 5 properties);
  • Maintenance/repair costs (bill for mechanical ventilation unit placement); and,
  • Property management costs.
Real Estate Update - May 2017 Expenses

Real Estate Update – May 2017 Expenses

More property taxes, sewage and garbage fees are scheduled to arrive in the coming two months. They are not as bad as this month though, fortunately.

Real Estate Report – Overview and Forecast

We made a total of €1.417 in net rental income for the month of May (before taxes). The net cash-flow will come in around €1.100. Our total YTD rental income for 2017 is €9.098 (before taxes).

Real Estate Update - May 2017 Overview

Real Estate Update – May 2017 Overview

Because it has been dry (both inside the one apartment and outside) there currently is no moisture or mold issue on the one unit. But this will come again once fall comes around. However, we are still struggling to find the right tools for the installation of the vapour barrier. We need to cut through 20cm of stone to install the barrier. But most available tools only go as deep as 10-15cm. Our contractor is still looking around, but due to the good economy he is busy as can be. Story to be continued.

Have not made much progress with trying to setup a sale of one unit, nor have we looked at work on the outside wall either. Need to review our options here soon as paintwork is due too. Really need to make a decision on what we will do going forward. Problem is there are few interesting opportunities out there right now, prices are going up everywhere and deals are hard to find. Perhaps it is better to keep the unit for now, fix the outside and try again next year (will look better and be worth more this way too). Many things going on right now.

How was your May from an RE perspective?

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We are back! We had a great holiday in Belgium over the last week. More details are to follow in the coming week(s) when we review our Savings Rate for April. But first, here is the Real Estate Report – April 2017.

Rental Income

No surprises here, same tenants, same income, all on time again! There is a raise coming for one tenant in July, the others will remain stable for now.

Real Estate Income - April 2017

Real Estate Income – April 2017

Rental Expenses

As you can see below our expenses were quite low for the month, this was as expected.

The expenses for the month include:

  • Insurance (for buildings and liability);
  • Interest costs (mortgage and loan); and,
  • Property management costs.

We were able to complete the installation of the second mechanical ventilation unit. Went in pretty smooth and only took a couple of hours. Unfortunately, due to various circumstances, the moisture barrier could not be installed. This is delayed, but not sure till when. We still like to complete these works in May, if possible.

Real Estate Expenses - April 2017

Real Estate Expenses – April 2017

Real Estate Report – Overview and Forecast

We made a total of €2.264 in net rental income for the month of April (before taxes). The net cash-flow will come in around €1900, which is superb! Our total YTD rental income for 2017 is €7.680 (before taxes).

Real Estate Overview - April 2017

Real Estate Overview – April 2017

May will have way more pain than April as the bill for the second mechanical ventilation will likely come in. We are also scheduled to pay various taxes (a major one this time). Not sure how June and July are going to look, depends on when the moisture barrier will be installed and if we still need to do the outer walls of two units.

The latter is however up in the air, for a good reason. We might sell these two units to expand the number of properties. We are considering the sale and, in combination with an investment mortgage, buy 3-5 units back. This will aid our return on investment and cash-flow (at least in the long term). Working on the details, but we seem to have two interested parties to buy the properties (read: both tenants).

How about you?? Good stories to share on the Real Estate front?

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For our real estate March was a busy month as we finally got some of the major outstanding maintenance works out of the way. Unfortunatly we were not able to complete everything we wanted to do. However, we both have two weeks off during the second half of April and a battle plan ready to get a lot of work done on our own home and the rentals! But let’s talk number first, here is our Real Estate Report – March 2017.

Rental Income

It was yet another good month with no vacancies and all rents paid on time. We really cannot complain as we have great tenants all around! This is where careful (and in our case also exensive) selection starts to pay off!

March 2017 Real Estate Income

March 2017 Real Estate Income

Rental Expenses

As you can see below our expenses were really high for the month. The primary reason is the installation of a mechanical ventilation installation system in one of the rental units. We already got the bill this month too, which also includes the purchase of the two mechanical ventilation units. We therefor expect another €400 bill for the installation of the second unit in labour costs and small materials. This bill should come in May.

We were a bit disappointed about the costs as they were a bit higher then expected (expected to be about €100-200 lower).  Mr CF did help out to keep the costs in reign, but this will “only” save about 300-400 euro’s overall. Still, a good savings none-the-less and some valueable lessons learned in DYI skills.

Other expenses for the month are:

  • Property taxes;
  • Interest costs (mortgage and loan); and,
  • Property management costs.
March 2017 Real Estate Expenses

March 2017 Real Estate Expenses

Real Estate Report – Overview and Forecast

We made a total of €1.070 in net rental income for the month of March (before taxes). The net cash-flow will come in around €650, signifianctly lower than last month. However cash-flow is expected to rebound in April (no major bills expected). Our total YTD rental income for 2017 is €5.415 (before taxes).

March 2017 Real Estate Financial Overview

March 2017 Real Estate Financial Overview

The (cash-flow) forecast for May is not very pretty because more property taxes, sewage and garbage removal bills are scheduled for payment. We will likley also see the bill for the moisture barrier installation (also scheduled for installatoin late April) and the second mechanical ventilation unit.

Still need to start work on the renovation of the outside walls for two other properties, but time is limited. This will really be a big bill that will wipe out two months of income easy. Aiming to get this work done around summer time to spread the effects on our cash-flow. In addition, the windows will also need to be painted at that time.

How did you do this month? Did you have any maintenance done on your own house? Or did you DIY lately?

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We thought we were smart and tried a (for us) new Real Estate Financing: Fail! What happened? We had applied for a personal loan of €75k to supplement our cash and find a property in the €85-110k range. But we got turned down, and not for the reason we thought! Keep on reading for the details 🙂

Real Estate Financing

Real Estate Financing

Real Estate Financing

In the Netherlands there are many several ways to finance real estate, but the options available to you depends primarily on the size of your wallet (or your income). Or in different words, how much cash you have available.

Quick overview of your main financing options (see also this post for details):

  • Cash;
  • Investment Mortgage;
  • Personal Mortgage;
  • Crowd Funding; and,
  • Personal Loans.


Buying a house in cash is only available for a select few. Don’t know about you, but we don’t have about €100K in cash laying around. Cash can be king in real estate, but using other financing means to purchase the property can give you much better return on investment. This is also why we prefer mortgages and loans for real estate investing: leverage!

Cash is king

Cash is king

Investment Mortgage

The investment mortgage market is rather difficult as you need specialized assessments (about €1000-1500 depending on the property) and you mandatorily have to hire an advisor (1% or property mortgage or flat fee of around €1500-2500) to prepare the application to submission to the lender.
Another drawback is that you can only get up to 70% of the assessed market value in rented state. This is commonly much less than market value. In short, you probably need a minimum of 30-50% of the market value in cash to purchase the property via this financing method.

The next drawback is that the minimum value of the investment mortgage is often €75k. Based on the above notes, it will be hard to finance properties below about €125-150k. This is unfortunate as this section of the market can be very profitable. The interest rates are reasonable at between 3.45% and 4.75% depending on Loan-to-value ratio and fixed interest period (for 1-10 years).

Personal Mortgage

The next method is using the house (or a portion thereof) for yourself and finance the whole property as if you will be using it for just yourself (you will have to declare this at closure of the mortgage). According to the terms of your mortgage, you would have to notify the bank if you want to rent out a portion. The answer you will get back is most likely NO (except under special circumstances, like your previous house does not sell).

The reason is that the banks don’t want the risk of having tenants that they cannot evict in this case that you cannot pay the mortgage and they have to foreclose on the home. You have to understand that tenants are extremely well protected in this country.

You can choose not to disclose to the bank that you are renting out units in your house, which commonly goes perfect as long as you pay the mortgage. But you will be violation of the terms of the mortgage. We officially cannot recommend you do this, but it is very often done as this is by far the cheapest way to finance a rental property. Interest rates are hovering around the 1.5-2.75%, depending of Loan-to-value ratio and fixed interest period (for 1-10 years).


You could in theory finance the entire property this way, we have seen this a couple of times already. But the interest and fees are quite high. It’s not uncommon to end up paying 6-7% overall.

Another drawback is the relatively short (usually less than 10 years) repayment period. So your cash-flow quickly become negative due to the high monthly loan payments.

Crowdfunding of Real Estate

Crowdfunding of Real Estate

Personal Loan: FAIL!

Having reviewed the above, we figured that a personal loan would be an option. We have good incomes, so we decide to apply for the highest possible personal loan at, which is €75k. No affiliate links to the company, but they have the best interest rates at time of writing this post. We decided to go for a 120 month repayment period. Monthly payments of €775, at an interest rate of 4.2%.

We filled in the application and waited for a call back. They were pretty quick actually and called within 1 business day. So far, so good. When we got chatting, one of the first question you get is where you will be using the money for. Being honest, we said for the purchase of a property. That was no issue.
But then the lady on the phone started asking if this was our only property. So again we answered honestly and said that we owned 5, including our own house. She returned by saying that she had to talk to a manager.


A few minutes later she returned with an unfortunate answer. They could not provide us with the loan as we had more than 4 properties. Apparently, if you own more than 4 properties you are seen as a business (even though we own the properties privately). We got told to look for a business loan and that the application was not going to be processed further.

A little miffed we asked if there was any other way to still obtain a loan, but that was pretty much a done deal (and we don’t have to try this again any time soon). Unless you want to commit fraud and change the application to a home renovation (which would be sort of true). But that’s not our style, so we have to revert back to the above options if we want to finance another property….darn.

We did ask if our income would support the personal loan, at least the answer to this question was yes. This was a bittersweet conclusion of the conversation.

We are still considering another personal loan company to see if their regulations are less strict. Do you have any other suggestions? Ones we have not thought about? We have considered a personal loan with the seller, but there are few sellers interested in such a setup unfortunately.

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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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I’ve run out of evening to make a longer, more elaborate post regarding the Real Estate Report, so will keep this short and simple for today. Any questions, please do leave a comment 🙂

Rental Income

Rental income is boring this month, no vacancies and every rent wat paid on time, yeah!

Rental Expenses

Expenses were a bit higher then anticipated. Primarily due to high costs on the boiler systems of two units. One had a leaking valve, which set us back about €77. Both units needed to be fitted with Carbon Monoxide switches, as both were deemed at risk by the original manufacturer. The cost: €35 for the two sensors. The total cost for the two boilers: €315 (normally that should be €156).

Other expenses for the month are:

  • Interest costs (mortgage and loan)
  • Insurance costs
  • Property mangement costs

Real Estate Report – Overview

Still, a pretty good month none the less. We still made well over €2.000 in net rental income (granted, before taxes!):

There will be some significant costs made next month as two units will be fitted with continuous ventilation. Furthermore the moisture issue will hopefully be tackled too with a lead slap and expoy barrier being placed within the wall. Costs will probably whipe out rental income for the month of Februari and/or March. Depends on when the work is executed and the bill arrives.

But at least we won’t kill our tenants with mold and we will also keep the building in better shape by keeping moisture levels down.


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HAPPY NEW YEAR! Team CF wishes you and your family great prosperity and health through frugal living and good investing.

Now, on to business. In this case the business or Real Estate. We will first look at the month of December 2016 to see what happened with our properties, next we will take a short look at the forecast for 2017 and expected developments regarding income and expenses.

December 2016 – Real Estate Report

December was fortunately unexciting (mostly). All properties were rented out and all rents were received on time, distribution is as follows:

Expenses this month were higher due to the interest payment on a personal family loan (as of 2017 this will be paid monthly). Other expenses such as mortgage costs and property management fees were normal. We had some negative expenses (i.e. a refund) on the insurance side. This was the result of a new assessment on the value of one of our properties. No maintenance costs for this month, but we had the heating systems serviced for two units. Bills are expected for January and will come in higher than planned due to placement of carbon monoxide sensors (€35 each) and issues with fine-tuning during boiler maintenance…..small setback.

At the end of the day, December and 2016 as a whole looked like this:

For 2016 we had about €9400 income, €6400 expenses and a net profit of €3000. Not bad for a year in which we really got going on the real estate side.

2017 Forecast

For 2017 the forecast is as follows:

  • €35.000 rental income (don’t expect empty units this year, buy you never know!)
  • €19.000 expenses (includes €9000 for large scale external maintenance for two units)
  • €16.000 net income = about 7% net yield (before taxes)

The large maintenance for the two units was expected and we have been saving up for it as well. These two units are old (1910-ish) and the outside paint work will be removed and replaced with stucco. This way the units will have lower maintenance going forward (no more masonry or paint work required in the next 10-20 year, depending on the quality of work). Windows frames will also be repainted. After this final large reno work, these two units are in tip-top conditions and should need very little work over the next decades.

We also found that the moisture issues (migrating through the outside wall), as discovered in one of the new units last year, is worse then expected. We are getting a contractor in next week to have a look. We have made some reservations for this one too. But this is the large unknown for 2017.

Stay tuned!

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As promised in the post on our Real Estate investments, we will be posting monthly “Real Estate Reports” going forward which will be showing all the good, the bad and the ugly. Considering this is the first post, we will have to provide you guys and gals with a bit of an explanation on the numbers.

To understand the numbers, you got to keep the following in mind:

  • We purchased our last three rental units in one purchase back in July, it took a bit of time to get things organized and we also had friends stay in the units for a bit in August.
  • The commercial workshop was already rented out in July, pretty much as soon as we moved in.
  • Next, we successfully found tenants whom moved in both in early and mid-September in the two vacant. We paid a fair amount of commission for this service by the property management firm we hired, but in return can add these investments in Box 3 for tax purposes (for us is a far more financially efficient setup than self-management, which has to be reported in Box 1).
  • We had very little expenses to date, other than some minor paint work, clean-up work and an initial assessment to be able to determine the appropriate monthly rental fees. More expenses will come in December and early next year once the boilers are serviced and mechanical ventilation is installed in both units. Some repairs are required for the roof of the workshop and painting is required at a few spots, all to be carried out next year too.
  • During the time the units were empty, we had to pay for the hook-ups for water, gas and electricity.
  • Insurance fees are normally paid every quarter, but due to some updates and re-assessment of the property values, we had several extra expenses and also some refunds from the insurance company.
  • We also liquidated our real estate business, which we held for a while when we were living abroad. This allowed for some tax advantages, but considering we are now living in the Netherlands again, this benefit disappeared and it made financial sense to move the properties to us privately and in Box 3 for tax purposes (instead of Box 2). You therefore see a jump in income from October to November, this is solely due to the two extra units providing income directly to us, rather then to the business.

As of November we thus have the maximum rental income possible for the 5 units.

This first plot provides and overview of the expenses, rental incomes (gross) and net rental income since July of this year. The negative net incomes in July and August are a result of the costs for the mortgage, utilities, insurance and rental price assessments, while not having any rental income at that time. Please do note that we book the rental income/expenses for the month they apply, just to keep the numbers stable (payment/transfer dates often shift around month end).


A more detailed breakdown of the rental income (gross) in November is provided here:


All costs incurred in November are shown here:


Note that all these incomes and expenses do not include any reservations for future large maintenance such as kitchen replacements, bathroom remodels, etc. These will ultimately show up as very large expenses and could easily wipe out rental income for several months.

Do you have rental units, if so, how did they do this month?





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