Earlier this week we got the keys to our first rental property. In two previous articles I have described the financing part and how we have narrowed down our selection. Of course we are very excited about it and hoping that we can rent it out as soon as possible. Below I will list down what type of additional costs can you expect if you want to buy a rental property in the Netherlands.
Mortgage Adviser – EUR 1,300
This is the part that hurts the most for me. As I have mentioned in the article about the financing part, we applied an additional mortgage on our own house. This has resulted in a very favorable mortgage interest rate. Now the rate is 2.33% which will be further reduced below 2% once our outstanding liability will get reduced again below 85% of the price of our home.
At the same time, the process of increasing our current mortgage had to go through the mortgage adviser of the bank. There was no much advise going on as I already had a clear picture in my mind. So he just had to process the information I provided to them. Of course we still received a long report, but I suppose this is generated based on the bank’s template and didn’t take more than 30 minutes of work.
Nice hourly rate there, feel like being ripped off here…
Notary Fees – EUR 829.62
These fees include the honorarium of the notary and arranging the administration with the land registry. You might be able to find a bit cheaper, or even a more expensive one, but I think it’s a good reference.
Note that these fees all together are nearly 40% less than the mortgage adviser fee…
Taxes – EUR 2,813.45
The big part of this amount is the property transfer tax (overdrachtsbelasting) which is 2% of the sales price.
For us it was a nice surprise to learn that the purchase price also includes the own fraction of the fund in the homeowners association. As the transfer of those funds are not subject to property transfer tax, we had to pay a bit lower than 2% of the purchase price.
Besides of property transfer tax, we also had to pay various local taxes (property tax, sewage charges and fees to the water authority). These taxes are paid in full at the beginning of the year, so we had to reimburse the seller proportionally from the date of the property transfer until the end of the year.
Homeowners Association Fees – EUR 124.14
This amount consists an administration fee charged by the homeowners association, furthermore the actual monthly fees until the end of the month.
Renovation and Appliances – EUR 905
This is the part where you can spend anything from nothing to the sky. After a discussion with our rental agent (plus some valuable reader feedback) we are trying to rent it out unfurnished. This would save a lot in the initial investment, but the monthly rent will also be lower.
We have still bought a new fridge and washing machine, curtain rails and some basic lights. Fortunately the apartment is in a nice condition, so we were advised not to make any renovation at this point of time. We only did some small painting work and laid new floor edges next to the wall where the old ones were damaged during the moving.
Total Costs – EUR 146,972.21
Adding everything together (including the purchase price of course) it cost us EUR 146,972.21 to get a rental property in a condition that can be rented out. It’s important for me to know this number in order to check the exact returns on this investment.
In the future I will publish separate, monthly real estate overviews in order to track the progress and share our experience with you. As this is far our biggest investment so far, I am really excited to see how it goes.
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Disclaimer: This post or any other information on the site is not intended to be and does not constitute financial advice or any other advice. I am solely sharing my idea, plan and progress on financial independence and early retirement