Beginning real estate investor here, from the Netherlands. Saving up to invest in rental apartments in Transylvania, Romania.
Much of what I've learned so far has come from American sources like Bigger Pockets and several authors and YouTubers. I was wondering if there are any European real estate investors among you guys. I'd be really interested in hearing your experiences so far and I've got a bunch of questions!
Rental Property Investor · Munich, Germany · Member since 2018 · 54 posts · 22 votes
6y
Yeah, that's pretty high for EU standards. In Italy, depending on the LTV you can go as low as 0.9% today.
Nice that you already thought about and found your risk tolerance for that. Please share if you have any news, and if you need anything from Germany or Italy, just let me know. =]
I am focusing on that region for a couple of reasons.
First of all, Dutch laws regarding loans and the Dutch overheated market (housing shortage, resulting in a couple with national average income only being able to afford just 9 percent of all homes) make investing here at home less interesting for me.
Second, I have faith in some of the cities in that reason. They are doing way better than the rest of Romania. The prices are low for European standards, but I am convinced that as long as I stay within the historical City Centres I should be able to make a good profit.
Furthermore, I know the market relatively well (I have family there, been there a lot, read about it a lot to stay up to date) and know people who own rentals there for years and years.
Also the idea of buying all cash, reducing the risks of losing a lot of money during bad times, makes me feel secure. Buying all cash in Western Europe currently is not an option, yet.
(By the way, loan interests are ridiculously high in Romania. So all competition that does not pay all cash, needs a higher income for the same return. This might be a relative advantage.)
In a nutshell those are my reasons for being focussed on that area.
Why do you focus on Northern Italy? I imagine price must play a role there as well.
Rental Property Investor · Munich, Germany · Member since 2018 · 54 posts · 22 votes
6y
Hi Simon,
Thanks for sharing.
My reasons are pretty much the same as yours =]
I am Italian, I know the region a little bit and I have family there. Prices in Munich are really high. It's the most expensive market in Germany. In Italy, houses are much more affordable so that indeed plays a role.
How high are the interests there? Would you be able to refinance the house after purchasing all cash to pull some equity out? Or that isn't what you are planning to do?
For example, mortgage rates over there are currently over 5 percent and in 2012 were over 12 (!) percent. For comparison, in the Netherlands mortgage rates are currently around 2 percent.
Not sure yet about the refinancing, still in the process of learning and exploring the options. I do want to keep a large amount of equity in my investments, though. I would prefer to buy 3 rentals over the course of the next 8 years and fully own them, rather than buying 10 but having a lot of debt. I'm rather conservative when it comes to that, especially in more risky markets.
Rental Property Investor · Munich, Germany · Member since 2018 · 54 posts · 22 votes
6y
Yeah, that's pretty high for EU standards. In Italy, depending on the LTV you can go as low as 0.9% today.
Nice that you already thought about and found your risk tolerance for that. Please share if you have any news, and if you need anything from Germany or Italy, just let me know. =]
British Virgin Islands · Member since 2020 · 31 posts · 13 votes
6y
Hi,
my brothers and I started with a LTR on Bonaire.
I live in the British virgin islands and my brothers in NL.
For the reasons Simon mentioned we are currently also not looking at NL. For now we are looking at Florida for our next step. Local knowledge and financially interesting are the main reasons. We would also like to look at south and east europe but are currently lacking the local knowledge for those areas.
Simon i like your approach of being conservative. Are you and Andre in the STR or LTR market?
Not sure yet about the management. Might use the contacts I have over there to get some good addresses for emergencies/maintenance etc. and do most management myself until I obtain my second rental.
Hopefully in a few years I'll be the expert on rental property investing that region and I might be able to help you to get to know it ;)
Florida sounds awesome! Will it be difficult to operate there as a foreigner?
Investor · Chicago · Member since 2018 · 113 posts · 51 votes
6y
I was doing some reading about Italy's "active residency program" where people are basically being given houses under the pretense they put xxx amount of dollars in renovating it and building up the cities economy.
is this a popular choice for those investing in Italy and maybe other parts of Europe or is it hard to realize any returns do to the size of the cities?
Rental Property Investor · Munich, Germany · Member since 2018 · 54 posts · 22 votes
6y
Hi @Stefan Folkert I am on the LTR. I am also using my background on project management and process improvement to build the process and systems to manage my properties in Italy through my family there. I did a lot of documentation and procedures already and It's working well so far.
If you need any help in the north of Italy, just let me know! =]
Rental Property Investor · Munich, Germany · Member since 2018 · 54 posts · 22 votes
6y
Hi @Matt B., are those the infamous 1 euro Italian houses? If so, those are houses in very small, old, and not developed cities. That's the purpose of the program, bring people to those cities, but I don't see that being profitable as a rental. I don't even know if you can rent it; If I am not wrong, you have to fix and live in the house for x time to get the house "for free."
And I also don't see a profitable sell or rent after fixing and living on it. If you are looking for a house "in the middle of nowhere in an old (maybe medieval) city in Italy to have for yourself, then that could be an option. But I don't know if there's any city "giving" houses at the present.