Why should I invest in real estate ?

Investing in real estate is interesting because it allows you to buy a property, rent it and pay the mortgage with the rental income. In this way, you create a real estate patrimony.

What are the advantages of new real estate ?

Investing in new real estate is offering several advantages. If you want to invest, you’ll first of all have to calculate exactly the cost of your investment. The advantage of new real estate is, that this cost is controllable. In fact, you have a fix price and a ten year guarantee on the stability and the durability of the building. This guarantee is a real security as it covers the two aspects that could cause problems or that could be expensive in case of problems with the new construction. You also benefit of a two years’ guarantee on the household appliances and a one year guarantee on hidden defects of the house. It is also important to know that no big expenditure needs to be foreseen in the next 15 years. And the charges are lower. So it is a perfect business-plan: we exactly know what we’ll pay from the start and we have a return on investment of X during the next 15 years. Investing in new real estate also offers you an important freedom of choice. If you buy your property on plan, you can decide how to arrange the spaces, ie. You can enlarge of diminish the volume of a room and you can make your choice with regard to the finishing (choice of materials, appliances, etc.) all with respect for your wishes.

What return on investment can I expect ?

You first need to get an evaluation of your property if you cant to invest in real estate. Many investors often tend to overestimate the return on investment in real estate. It has been shown by a recent study that 1 out of 4 Belgians think that real estate will give them a 5% return. One out of 6 even aims at 8% or more. Unfortunately this is not realistic. The real return on investment is mostly slightly above 3% (source AG). In order to calculate your return on investment you simply divide the yearly rental income by the total purchase price of the property. Then you multiply the result by 100 and you get the gross return on investment. The average return is calculated on 10 months, as you need 1 month’s income to pay the cadastral income and one month’s income to cover the rental costs (painting, vacancy, damages, ..).