How much money do I need to buy a rental property?
In today's edition of our video blog you will learn how much money you need to buy a rented property:
Frequently, capital investors ask themselves:
- How much equity do I need when buying an owner-occupied property?
- What are the notary and court fees when buying a property?
- How much is the real estate transfer tax?
- What is the cost of professional management?
- How much should my net income be when buying a rented property?
- Can I buy a rented property together with others?
- Can I use my owner-occupied property to buy a rental property?
- What is the cost of buying a rented property?
- At what point does rented real estate become worthwhile?
We answer these and many other questions in our video blog editions.
Here is the transcript of episode 1 to read:
If you are interested in knowing from what monthly income and from what savings you can personally invest in passive income, then you will find a few clues here.
As a single person, you can expect banks to finance you from about 2,500 EUR to 2,800 EUR net. If you are married or a couple, you need about 3,500 EUR net. Young people, however, can start with a little less income, because they have much longer time for repayment. The tenant has a longer period of time to pay back the property for you.
It sometimes makes sense to perhaps buy together with someone else, e.g. if you do not yet earn enough money yourself or are still very young, but already want to generate real estate as passive income for yourself. Then it would make sense to buy real estate with siblings, with a boyfriend or girlfriend together. Of course, the parents can also be taken, which then help (out).
In case of doubt, the parents do not get any interest on their savings either. Many say with a real estate that they help very gladly, so that you get your first rented real estate. If you ask your parents about it, you will surely experience the same. They would not give you money for a car or for a vacation. But when it comes to real estate, parents are usually very positive.
Then there's always the question of "How much equity do I need?".
If you do not own any real estate and are a tenant yourself, you can calculate as follows: You should invest between 10,000 EUR and 20,000 EUR of your own capital at the beginning. If you do not bring anything yourself, you will pay a disproportionate amount of interest, because the banks will make you pay very dearly.
Therefore, we recommend to have about 10,000 EUR to 20,000 EUR in savings. Then you have good conditions to generate passive income for yourself.
Real estate purchase, purchase price, equity, financing, notary and land registry costs