The housing market is unpredictable in 2023. If you're thinking about investing in a property and renting it out, you should be aware that it has become less straightforward. The government has implemented several measures that affect the return on your investment. This may come your way, especially if you're a new investor in The Hague.
Pitfalls and setbacks on your path: Housing Permit and Maximum Rent
A housing permit is required to live in an affordable to mid-range rental property. This is a measure the municipality has put in place to prevent skewed housing distribution. The municipality has also determined a maximum rent for mid-range housing. To check if the property you want to rent falls into these categories, a point system is in place.
Wealth Tax Box 3
The percentages of the vacant value ratio table for rented properties are adjusted. This means landlords will pay more tax on the property they rent out. The vacant value ratio is a regulation that ensures rented properties don't have to be included in Box 3 for the full property value. The percentage of the property's value to be taken depends on the rent compared to the property's value. It sounds complicated, doesn't it? So, it's wise to get well-informed about this.
Real adventurers don't back down
But a true adventurer isn't deterred. So, we still see many business and private investors investing in properties for the rental market. In large cities, this is also a very interesting investment, as the demand for housing remains high. In The Hague, for example, there are always many expats looking for accommodation.
If you're such an adventurer who loves a challenge, then take these tips before venturing into the jungle of real estate investments:
- Your taste doesn't matter:
Potential buyers often look at a property as if they would have to live there themselves, and personal taste can hinder a potential purchase. Never forget that you are buying this property for rent. Your taste doesn't matter. It's about the property looking polished and neutral, attractive for the tenant to make their mark.
- Location, location, location:
Much more important than taste is the location of the property! It is perhaps the most crucial aspect when it comes to a good rental income. Tenants first look at everything in the vicinity, such as shops, gyms, public transportation, primary schools, and other amenities. So, it's definitely worth analyzing the neighborhood and average rental prices before buying a property.
- Think about the energy label:
Renting properties in major cities is a costly affair. For a potential tenant, a property that is inexpensive due to good insulation is often a plus. But, of course, you also want a good rental income! Therefore, look for properties with the greenest possible energy label.
We are happy to be your loyal guide
The true adventurer understands the value of a local as a loyal guide. They know all the ins and outs of the land and its people, leading the adventurer through all dangers to the treasure. With over 15 years of experience in the world of real estate, renting, and leasing in The Hague and its surroundings, HouseScout gladly guides you towards your investment goal. Are you planning to purchase real estate in The Hague for renting? Then request a free introductory meeting now. In that, we will precisely explain how renting out a property works and what kind of return you can expect.