How Can You Finance Real Estate? All Options at a Glance!
Ways of financing.
You can finance real estate in several ways. I cannot tell you which way suits you and your personal situation. For that, you will need to seek real advice, for example from the parties that I mention at the bottom of this article. I can share some information with you so that you get a little feel for real estate and this topic becomes less complex for you.
Before you go further into opportunities to also invest in real estate, it is important that you prepare well. Something with well-prepared ideas. Luck favors the prepared. Put the following information on paper for yourself:
What is your income?
What is your personal situation, are you single, married, children?
Do you currently have a home for sale, and if so, what is the current WOZ and market value and what is the amount of your mortgage? And at what interest did you provide your mortgage?
Do you have savings, and if so how much?
Make sure that you have made a return calculation sum so that you know what amounts you are dealing with. Read this article for an example.
Contact parties who can help you rent out your property. I rent out my real estate through a rental agent. Make sure you know in which neighborhood you want to bite and what rent you can use.
Make sure that you are aware of all tax rules. Coming afterward for surprises with these friends is shit.
Luck favors the prepared, so prepare your damn good!
In short, there are some ways to finance real estate ( you are looking for money to buy a property yourself ). In addition, there are also opportunities to invest in real estate ( you invest money with another party and you benefit from, for example, dividends ). Below I list a few (so many people, so many wishes, so many options. I mention a few for inspiration) options.
Real estate financing
The usual way.
I financed my first real estate investment in the most common way. I had enough of my own money and at that time a steady job with a good income. That is why my application at Rabobank was a piece of cake and almost immediately approved. In the Netherlands (and beyond, the German Volksbank has more attractive conditions, for example) you have NIBC, ING, NN, Lloyds Bank and others who can help you with real estate financing in addition to the Rabo. For this, I would advise you to contact one of the contact persons that I mention at the bottom of this article. They can help and advise you in a targeted way.
For an initial real estate investment, I would advise you on the ‘usual route’. This means that you have to put in quite a bit of your own money, so it is a long breath, but the more own money = less risk. In the case of vacancy, you pay the financing yourself, and the higher it is the more costs. Occasionally vacancy is a realistic scenario, take this into account in your return calculation!
You may also have to sell your investment at an unfortunate moment, for whatever reason. Suppose you bought your property at a good time for a tonne, but the moment you have to sell it is only worth 80 thousand euros, then you are happy that there is no higher financing because then you have to go deep into the pouch.
For most lenders, it is important that you can prove that you have income in Box 1, or income from work. So if you have a permanent job then you have an advantage. But there are also solutions for people without a permanent job, for example for starting entrepreneurs. Divest is a party that looks at the capital in Box 3 for financing.
This includes savings and already accumulated capital, for example, a surplus-value on another property such as your own home. This is particularly interesting if you already have a property and want to make a subsequent purchase. Check the Domivest site for more information. I don’t have any financing with Domivest, but I hear good stories from reliable sources.
The risk for a party as divesting is higher because they only look at your box 3 capital, which means that the interest is also higher than when, for example, you finance the investment in ‘the usual way’.