Advice on buying a house (Netherlands, Amsterdam)

[AllTheBitz]

I'm thinking of buying a flat in Amsterdam or rather taking a mortgage out more specifically. Mortgage rates are pretty good and if I choose to I will have to invest little of my own money.

Pros:

• It's in a bustling major city
  The market seems to have bottomed and is in a small upswing
  Easy for me to get a good size mortgage
  Rates are very low
  Some tax benefits to owning
  Beats renting
  Can always rent it out fairly easily if I end up having to leave Amsterdam

Cons:

• The Netherlands has punitive yearly taxes on owning real estate
  Heavy deflation could turn the purchase sour
  If I have to rent it out the bank will likely crank my interest rate up (no point in trying to rent it on the sly, I just don't want that kind of headache)
  Somewhat hefty pricetag for intitial fees, survey ect..
  Some regime uncertainty since The Netherlands is very leftwing and has only recently liberalized parts of their property market in the past few years
  Could end up with a revalued mortgage if the single currency crumbles?

I'd really appreciate your thoughts guys, please point out any errors in my thinking or things I have overlooked... Thanks in advance!

If the house still in a good case you can sure invest in it , maybe after 10 or 11 year you will
get you ROI but don't forget that the house will still on your hand too you can then rent it as
you want and sell it after that 

[bigtimespaghetti]

Isn't Europe about to collapse into a Sovereign Debt collapse BIG BANG this year (or next) according to Martin Armstrong's models. In what universe would that not mean a collapse in real estate prices and an increase in taxation??

Armstrong has also written about the bubble in real estate in Switzerland. He has also written about the real estate loans throughout Europe denominated in Swiss francs, that will blow up because of the abrupt and egregious appreciation of the franc since the Euro peg failed recently.

C-O-N-T-A-G-I-O-N.

The comments in this thread are interesting because it means there are some (most?) who still don't believe the contagion will affect all of Europe (are they correct?) and thus the stampede out of Europe will be abrupt as these people wake up to a contagion and try to all exit at the same time too late.

You know I agree that the direction the West is going is not good. I am just wondering if this can kicking cannot go on for a long time yet- just look at the freak show in Greece right now, it's like watching a punch and judy show. I think that there is some argument that as everything is falling apart, real estate in affluent major cities could retain some safety- see London for example where wealthy multinationals have been buying up huge chunks of houses, largely French and Chinese.

Doesn't Martin Armstrong also advocate getting a long term fixed rate mortgage right now if you can?

In a worst case scenario, I'd be out maybe 7000-9000 eur on fees and surveys, a state mandated insurance (that the borrower pays for) backstops the banks in case of default.

I see it one of two ways- best case I have a cash-flowing property in the long term, worst case, I along with the rest of Europe go into default.

Be sure I will be reading through my terms and if in the event of default I will still be on the hook for the mortgage in the event of bankruptcy I will seriously reconsider my position.

[bigtimespaghetti]

If the house still in a good case you can sure invest in it , maybe after 10 or 11 year you will
get you ROI but don't forget that the house will still on your hand too you can then rent it as
you want and sell it after that 

Renting in the future is the major incentive for me. The other benefits I would get from owning are a bonus.

[neoneros]

Buying now is a good option. Mortgage rates are low as are the housing prices. Buy cheap and loan cheap. If you have money to invest to downsize the mortgage amount you should do so.

While living there yourself you can deduct the interest and the monthly cost would be far less then when you would have rented a place like that. If you ever consider to leave and rent it out, try dividing it in rooms for students.

For now if you would rent it out, the first three years you do not have to pay taxes for the possession of the house or the rent income, though you loose the deduction. And only if you have the house for sale, bit shady, because having the intention to sell is enough. 'Stille verkoop'

Good luck and go for it!! Do not worry about the water levels, luctor et emergo

[bigtimespaghetti]

Buying now is a good option. Mortgage rates are low as are the housing prices. Buy cheap and loan cheap. If you have money to invest to downsize the mortgage amount you should do so.

While living there yourself you can deduct the interest and the monthly cost would be far less then when you would have rented a place like that. If you ever consider to leave and rent it out, try dividing it in rooms for students.

For now if you would rent it out, the first three years you do not have to pay taxes for the possession of the house or the rent income, though you loose the deduction. And only if you have the house for sale, bit shady, because having the intention to sell is enough. 'Stille verkoop'

Good luck and go for it!! Do not worry about the water levels, luctor et emergo

I will not over extend myself with debt, this is the first time I have considered any debt I could not pay off the next day. But I will also not tie up any of my savings unless I have to.

Thanks for the advice neoneros.

Let's hope the rest of the West can luctor et emergo to!

[iamback]

Email Martin Armstrong and ask him.

He wrote about real estate (this is a global model I think):

http://armstrongeconomics.com/2015/02/26/real-estate-the-business-cycle/

[bigtimespaghetti]

Email Martin Armstrong and ask him.

He wrote about real estate (this is a global model I think):

http://armstrongeconomics.com/2015/02/26/real-estate-the-business-cycle/

Thanks iamback. I appreciate the link. I'll have a read and I'll email him too.

[bigtimespaghetti]

Those interested in real estate, run out now and take the longest possible mortgage at a FIXED rate in the domestic currency of where the property is located and/or you wealth with rates this low. If you use a cross-currency, then you better pay attention to hedging. This is a hedge so if it ever gets that bad, you can just walk away as did the Romans. DO  NOT assume real estate is a store of value. That depends on the taxation level of the local government and the location.

Ah this is the article I cam across recently. I'm certainly not pinning my hopes on capital gain. But with a fixed rate mortgage and assuming I had to rent the place out, rents would have to fall by approximately 40% for me to start being concerned about my mortgage payments.

I do like the idea of getting a yen loan, but with the euro being such a basket case any significant fluctuation in exchange rate means that it'd be simply too risky.

[Joerii]

I'd buy that house and rent it out using AirBnB. Good money right now in Amsterdam !

[bigtimespaghetti]

I'd buy that house and rent it out using AirBnB. Good money right now in Amsterdam !

I have noticed this as well. A lot of hassle if you are away from the city though.

[cryptillian]

in a AAA location or?

[bigtimespaghetti]

in a AAA location or?

Yes it would be in a desireable area, if it wasn't the debt would be essentially meaningless to me as housing in less desireable areas is well within my ability to pay down quickly.

[elasticband]

Is it for living ?

Yes, I work in the centre, sorry if I wasn't clear on that.

OK then, good luck anyway. I visited the Netherlands once and loved Amsterdam    A good friend of mine also got married to a dutch and are living there.  

Thanks mishax1! I really like it here too (I'm British). I'm just still a little unsure if it's a 'good' time to buy. I suppose if it was a 'good' time I'd probably already be priced out though! I don't care about capital appreciation- it'll be a home and a very long term investment to me. But I'd rather not wipe out my finances on a silly decision too.

I had to idea you were British, i thought you were dutch! How long have you been in NL now? we should do a beer sometime...

I have a few friends that just entered into he property market and yes they all think now or a few month ago was the time to buy.

What areas around the city are you thinking?

considering you can find a place for the equivalent of 10-15 years rent in the private sector i would say f*cking go for it.

If i had any long term ties here on knew i was going to be here for a a long time i would buy instead of renting, but i am thinking of other paces in a year or two.

[bigtimespaghetti]

Is it for living ?

Yes, I work in the centre, sorry if I wasn't clear on that.

OK then, good luck anyway. I visited the Netherlands once and loved Amsterdam    A good friend of mine also got married to a dutch and are living there.  

Thanks mishax1! I really like it here too (I'm British). I'm just still a little unsure if it's a 'good' time to buy. I suppose if it was a 'good' time I'd probably already be priced out though! I don't care about capital appreciation- it'll be a home and a very long term investment to me. But I'd rather not wipe out my finances on a silly decision too.

I had to idea you were British, i thought you were dutch! How long have you been in NL now? we should do a beer sometime...

I have a few friends that just entered into he property market and yes they all think now or a few month ago was the time to buy.

What areas around the city are you thinking?

considering you can find a place for the equivalent of 10-15 years rent in the private sector i would say f*cking go for it.

If i had any long term ties here on knew i was going to be here for a a long time i would buy instead of renting, but i am thinking of other paces in a year or two.

I took a job last year and moved here, like I said, I've really loved living here so far.

A beer sounds good!

There are some nice places near Vondelpark, since I'd like to buy a dog too, this might be the best option if I can find an appropriate place. I'd want a balance between decent place and good location. Since I'm not married to the idea of buying in places like the centre or the Joordan (though not ruled it out) there seem to be a decent number of properties out there. Seems a few people are asking a bit more than they are really worth though.

[elasticband]

Is it for living ?

Yes, I work in the centre, sorry if I wasn't clear on that.

OK then, good luck anyway. I visited the Netherlands once and loved Amsterdam    A good friend of mine also got married to a dutch and are living there.  

Thanks mishax1! I really like it here too (I'm British). I'm just still a little unsure if it's a 'good' time to buy. I suppose if it was a 'good' time I'd probably already be priced out though! I don't care about capital appreciation- it'll be a home and a very long term investment to me. But I'd rather not wipe out my finances on a silly decision too.

I had to idea you were British, i thought you were dutch! How long have you been in NL now? we should do a beer sometime...

I have a few friends that just entered into he property market and yes they all think now or a few month ago was the time to buy.

What areas around the city are you thinking?

considering you can find a place for the equivalent of 10-15 years rent in the private sector i would say f*cking go for it.

If i had any long term ties here on knew i was going to be here for a a long time i would buy instead of renting, but i am thinking of other paces in a year or two.

I took a job last year and moved here, like I said, I've really loved living here so far.

A beer sounds good!

There are some nice places near Vondelpark, since I'd like to buy a dog too, this might be the best option if I can find an appropriate place. I'd want a balance between decent place and good location. Since I'm not married to the idea of buying in places like the centre or the Joordan (though not ruled it out) there seem to be a decent number of properties out there. Seems a few people are asking a bit more than they are really worth though.

Properties in Amsterdam are always available, i keep an eye on the market since i got here 2.5 years ago, its a beautiful city and lots going on so its a great place to buy and potentially rent, or just for living purposes you are saving small fortune compared to private rental prices.

If i were going to buy a property in the city i would aim for Old west, pijp or i guess the jordaan, but i really do prefer it just outside the central canal ring, personally i don't spend much time in the center these days apart from a few select bars or local bitcoin sales. really though cycing makes anywhere accessible. I was actually looking around the 150k range just the other day, there are some nice apartments/studios out there!

What are you looking for, studio, 1 or 2 bedroom? I personally would advice a 2 bedroom due to the potential extra income but budgets may not allow for that.

[bigtimespaghetti]

Is it for living ?

Yes, I work in the centre, sorry if I wasn't clear on that.

OK then, good luck anyway. I visited the Netherlands once and loved Amsterdam    A good friend of mine also got married to a dutch and are living there.  

Thanks mishax1! I really like it here too (I'm British). I'm just still a little unsure if it's a 'good' time to buy. I suppose if it was a 'good' time I'd probably already be priced out though! I don't care about capital appreciation- it'll be a home and a very long term investment to me. But I'd rather not wipe out my finances on a silly decision too.

I had to idea you were British, i thought you were dutch! How long have you been in NL now? we should do a beer sometime...

I have a few friends that just entered into he property market and yes they all think now or a few month ago was the time to buy.

What areas around the city are you thinking?

considering you can find a place for the equivalent of 10-15 years rent in the private sector i would say f*cking go for it.

If i had any long term ties here on knew i was going to be here for a a long time i would buy instead of renting, but i am thinking of other paces in a year or two.

I took a job last year and moved here, like I said, I've really loved living here so far.

A beer sounds good!

There are some nice places near Vondelpark, since I'd like to buy a dog too, this might be the best option if I can find an appropriate place. I'd want a balance between decent place and good location. Since I'm not married to the idea of buying in places like the centre or the Joordan (though not ruled it out) there seem to be a decent number of properties out there. Seems a few people are asking a bit more than they are really worth though.

Properties in Amsterdam are always available, i keep an eye on the market since i got here 2.5 years ago, its a beautiful city and lots going on so its a great place to buy and potentially rent, or just for living purposes you are saving small fortune compared to private rental prices.

If i were going to buy a property in the city i would aim for Old west, pijp or i guess the jordaan, but i really do prefer it just outside the central canal ring, personally i don't spend much time in the center these days apart from a few select bars or local bitcoin sales. really though cycing makes anywhere accessible. I was actually looking around the 150k range just the other day, there are some nice apartments/studios out there!

What are you looking for, studio, 1 or 2 bedroom? I personally would advice a 2 bedroom due to the potential extra income but budgets may not allow for that.

I agree with your choice of locations. My upper limit is 200. I don't think I'd feel comfortable taking out more debt than that (or tying up savings in equity). I wouldn't be able to rent out extra rooms while living in a two bedroom- my significant other would not allow it 

As I wrote earlier, I like the idea of renting it out as there is such demand in this city... I mean when the government strangles the housing stock by owning more than half of the properties, it makes sense to take advantage of the distortion in the market.

If it was up to me I'd probably buy a studio in/near the centre, but it wouldn't work with my wife too, so I need to consider 1 bedrooms really.

[elasticband]

Beware that when you have a mortgage on the house, in the Netherlands it is usually not allowed to rent the place out (because of the strong position of tenants, they can't be kicked out even when you can't pay the mortgage anymore).

Yeah tenants rights in NL are crazy in favor of the tenant.

I always felt kind of wrong knowing i could go to the huur commissie and potentially have my rental rate dropped if my apartment does not meet the bill and possible leave the landlord paying part of his own mortgage for me to stay in his apartment.

[bigtimespaghetti]

I'm aware of the risks involved with renting, the laws seem to be better than they were a few years ago, but still very pro tenant- which is fine if there is a genuine need, but I have read a lot about people taking advantage of this. This is why I'd probably choose to rent to trustworthy expats.

[bigtimespaghetti]

Beware that when you have a mortgage on the house, in the Netherlands it is usually not allowed to rent the place out (because of the strong position of tenants, they can't be kicked out even when you can't pay the mortgage anymore).

I'm aware of the banks not liking this and have read that they can increase the rates they charge if you let them know you are renting it out.

I think the bank would likely be flexible (it is a point I will discuss with them), when presented with either having a default or slightly increased risks from allowing the property to be rented. Besides, I wouldn't take on debt I could not afford so the property could be paid off without a tenant too- just wouldn't be ideal.

[cryptillian]

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