When you need to move abroad, rental property is ideal at the beginning. However, there also comes a time when you’re hoping to settle down. At this point, you’re probably wondering whether it’s best to rent or buy a house in the Netherlands.
As an international, you likely arrived to the Netherlands, tackled the housing crisis, and found yourself a rental property (in order to take a moment and decide whether you actually like living in the land of cheese, clogs and windmills.)
Or perhaps you arrived to the lowlands certain that this is the life for you, or you’ve grown to love the country overtime (weather and all.) In this case, you may be considering whether it’s a good idea to take the plunge and become a homeowner in the Netherlands, or continue to rent for a bit longer. Let’s tackle this question, shall we?
We teamed up with Expat Mortgage Platform to bring you this article. Afterall, if you’re going to write about renting and buying, you need to get your information from the best sources!
2021 may be the year to buy a house
Let’s begin by taking a look at the current housing market. While the rent is increasing year after year, the current interest rates of a mortgages are extremely low in the Netherlands. And low interest equals low monthly payments. Given this, it is most likely that the rental prices cannot compete with the mortgage payments you would have to pay should you decide to buy.
Renting in the Netherlands is not cheap and depending on where you are, you could be worse off financially in a rental property. A three-room flat in Amsterdam’s Buitenveldert district will cost you around €1,900 a month in rent, but if you bought the same property, it could be as much as €700 a month cheaper — and that is taking all the bills into account as well.
A full break down of the various price comparisons could warrant a book in itself. Luckily, mortgage advisors such as Expat Mortgage Platform can offer a comparison of the various buying and renting prices in major cities across the Netherlands!
Buying vs renting a house in Netherlands: the pros and cons
There are many pros and cons when it comes to buying vs renting in the Netherlands. We thought it would be best to devise a neat little table for you to consider:
|Buying||Your mortgage and other housing costs are often less expensive than renting.||Your monthly payments might go up when your interest rate period has ended.|
|Mortgage interest and one-time costs of closing a mortgage are tax deductible.||You will be responsible for maintenance and repairs yourself.|
|You build equity by making monthly payments and the property will become yours once the mortgage has been repaid.||You may lose equity if the property value declines.|
|You can find a home that matches your wishes (location, architecture, building type.)||You have to pay property tax and other communal taxes.|
|You can renovate the property however you want.||You are most likely to have an insurance (not applicable when buying an apartment, instead you are member of the owner’s association and pay a monthly fee).|
|You don’t have to worry about your landlord selling on the property.||It’s more difficult to move country if you own a house.|
|Renting||You can terminate your rental agreement at any time.||Rental prices are high and increase each year (sometimes even up to 10%)|
|The landlord is responsible for maintenance and insurance.||Limited choice/ supply.|
|You have a high level of rent protection.||Renovating the house/room by yourself is very limited or non-existent.|
|You don’t have to pay property tax.||When you move, you may have to return the property to its original state.|
|You don’t have to worry about losing money if housing prices drop.||If the landlord decides to sell the property you could lose your home.|
In the long run: buying a house in the Netherlands is financially wise
If you’re planning to stay here for a couple of years (and you know, care about your money like the rest of the world), buying a house will be of interest for you.
Especially considering rental prices will increase each year whereas your mortgage payments will pretty much stay the same. So sure that €800-900 mortgage now seems quite stiff, but in a few years’ time when rental prices are around €2000 (we’re getting there), you’ll be happy you made the choice to buy a house in the Netherlands.
The downsides of buying a house in Holland
Of course, the future isn’t always guaranteed. You also need to think about the risk of value loss which occurs when your total mortgage is higher than the market value of the house. Although that doesn’t seem to be happening anytime soon in the Netherlands as it has never been so profitable to sell your house.
What if you’re thinking about renting or buying a house in Amsterdam?
For those that want to buy or rent in Amsterdam, first of all, must have a good look around at where to live in Amsterdam, have patience, and have sufficient resources (to pay a deposit when renting and pay buyer costs when buying a house in Amsterdam).
There are many like you out there also considering buying a place in Amsterdam, and subsequently, the property market has switched into a higher gear than the rest of the Netherlands. It’s important to keep up to date on how the market is developing.
Before buying a house in Amsterdam, know the market
Amsterdam is a large and, above all, diverse city. If you are going to buy a house, a purchasing realtor is recommended. The big advantage is that a purchasing realtor knows the market, the circumstances, the environment and takes into account your financial possibilities — ensuring that you do not pay more for a home than necessary.
He or she knows all your wishes and needs and looks for a suitable home that is already on the market or still has to come on the market. As an international, sourcing a mortgage expert can be a bit daunting, but there are actually experts who cater specifically to expats!
For example, Expat Mortgage Platform works with purchasing agents who specialize in buying as an international.
What’s this erfpacht when you buy a house in Amsterdam?
If you are considering whether to buy or rent in Amsterdam, there’s one specific thing to consider if you buy: namely the leasehold, aka erfpacht. In short, it means that you will become the owner of the property, but the municipality will remain the owner of the land.
You pay an amount to the municipality for that land — the ground rent canon. In principle, you pay this amount annually for as long as you live there. In some cases, the leasehold has been bought off, or you have the option of doing that.
In this case, you actually pay for a certain period in advance, for example, 50 years, or this has already been done. A purchasing realtor can tell you more about this. When looking for a home, it is important to take the erfpacht into account, because the lease to be paid influences what you can borrow for your mortgage.
If you do not know whether you have to buy or rent a house in Amsterdam, you can consider how your monthly income is affected if you rent or buy a house in Amsterdam. The differences per month (net) can already amount to more than €700!
Can you actually get a mortgage in the Netherlands?
So you’ve made your choice and decided to buy in the Netherlands? You might first want to know all the ins and outs of that process and whether or not you can actually get a mortgage.
Expat Mortgage Platform can help you out with all that. Feel welcome to set up a meeting, no strings attached, with one of their English-speaking advisors. They’ll show you what comes to play when you decide to buy a house in the Netherlands step-by-step and in proper English.
After the first meeting with them, you’ll also know a pretty precise figure of what you can get as a mortgage, which helps to determine your range for when you go house hunting in the Netherlands.
Oh, and in case you’re wondering, with Expat Mortgage Platform all your documents in this great buying-a-house-in-the-Netherlands adventure are also in English!
Are you planning to buy a house in the Netherlands? Still doubting between renting or buying a place? Feel welcome to comment!
Feature Image: djedj/Pixabay