If you are an expat considering investing in property in the Netherlands, understanding the Dutch buy-to-let mortgage market is essential. These types of mortgages are specifically designed for individuals who intend to purchase a property for the purpose of renting it out to tenants. We will cover the basics of a buy-to-let mortgage in the Netherlands, including the requirements, process, and potential benefits of investing in rental property in the Netherlands.
What are buy-to-let mortgages in the Netherlands?
In the past, expats faced challenges entering the Dutch buy-to-let market unless they had the financial means to buy a property outright. Moreover, expats were only able to eligible for a buy-to-let mortgage after residing in the Netherlands for at least three years. The process of obtaining a buy-to-let mortgage has become more accessible for expats over time. However, there are still specific qualifications that must be met.
Buy-to-let mortgages in the Netherlands, also known as investment mortgages, are designed for individuals who want to purchase a property for the purpose of renting it out to tenants. A buy-to-let mortgage is provided by Dutch banks and financial institutions. It typically requires a larger down payment and higher interest rates compared to traditional residential mortgages. To qualify for a buy-to-let mortgage in the Netherlands, applicants must have a good credit score and a steady income. They may also be required to provide a detailed business plan outlining their rental property investment strategy. Additionally, the property being purchased must be income-generating, meaning it must be rented out to tenants.
Requirements for a buy-to-let mortgage for expats in the Netherlands
Dutch banks provide mortgages for expats in the Netherlands, even for those who have not resided in the Netherlands for an extended period of time. However, expats must meet specific qualifications in order to be eligible for a mortgage. These include:
- Having resided and been employed in the Netherlands for a minimum of three years
- Having a minimum gross annual income of €45,000 euros
- Being an EU national or meeting the residency requirements
- Having a significant amount of personal funds available to cover a portion of the property purchase price, typically around 40-50%
These are general requirements. Other banks might have different requirements and criteria for approving a mortgage application.
Banks may require that the property is intended for long-term rental only when applying for a buy-to-let mortgage. Short-term rentals such as vacation or Airbnb may not be allowed. Additionally, banks tend to prefer properties located in major Dutch cities such as Amsterdam, Rotterdam, The Hague, and Utrecht. This is due to the higher rental demand in these areas, which reduces the likelihood of the property remaining vacant. This makes such properties a more secure investment for the banks. It is a general trend. Each bank may have its own criteria and preferences.
Can you use your current mortgage to buy a rental apartment?
It is possible to use your existing mortgage to purchase a buy-to-let apartment. If you already own a home and have a mortgage, there are various options available. It is recommended to speak with a financial advisor to explore these options and determine the best course of action for your specific circumstances. This could include using your current house and mortgage to potentially secure a higher return on your investment. However, it is important to note that every case is different. It is crucial to consider all the pros and cons, tax implications and regulations before making a decision.
Why consider a buy-to-let mortgage?
Investing in a property in the Netherlands for the purpose of renting it out can be a viable option, as it can provide rental income and potential appreciation in property value. However, it is important to be aware of the various factors that come into play when investing in rental properties, such as tax consequences. For example, a 1.2% annual tax levy is imposed on the value of the property (minus the mortgage). Additionally, the process of evicting tenants in the Netherlands can be complex and time-consuming. Weigh the pros and cons of this type of investment, and consult with a financial advisor to gain a comprehensive understanding of the potential risks before making a decision.
Your partner in buy-to-let mortgages in the Netherlands
If you are interested in learning more about buy-to-let mortgages and the costs and returns associated with this type of investment, we invite you to reach out to us. Our team of experts would be happy to provide you with more information and answer any questions you may have. You can contact us by phone at +31 70 5118788 or by filling out our contact form. We look forward to hearing from you and helping you make an informed decision about investing in the Dutch property market.
How can we help you?
José de Boer
Buying an apartment to lease out can often be a good investment as, in addition to rental income, an increase in property value can be expected as well.
Obviously you can purchase such properties with your own private cash, however taking out a mortgage has also recently become an option.
The bank may set a few more conditions regarding the rental of the apartment. For instance, a long-term occupation needs to be the case – Airbnb or any other short-term rental is not allowed.
The bank will expect buyers to cover roughly 40 per cent of the purchase price with their own cash.
Please contact one of our mortgage advisors in order to hear how we can help you and which other conditions/requirements apply.
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At FVB de Boer, we have established good working relationships with a number of Dutch banks to help you realize your dream property.
FVB de Boer helps you to secure your property with building and fire insurance or home contents insurance for the short or long term.
Buying an apartment or home to rent out can be a good investment. FVB de Boer can arrange mortgages for expats to buy property.