To rent or to buy? That is the question
The life of an expat, contrary to what some people might believe, is full of challenges and tough decisions. For example:
- Which Michelin star establishment to dine in that weekend
- Deciding on the right level of Christmas bonus for the cleaning lady
- Finding and keeping the right nanny
- Fending off gold diggers (male and female) who are desperate to get their hands on some of that expat cash
- How to get out of attending your Dutch partners family circle party
These challenges fade into insignificance when faced with a decision that most expats face at one time or another during their stay in the two wheeled paradise known as the Netherlands. Which brings me to the subject of this post, to rent or to buy that is the question.
Why expats often rent
My expat journey began in Amsterdam over ten years ago. Initially, the Shallow Man was only planning to stay in the Netherlands for six months, this was extended to twelve, and then before I knew it, three years had flown by faster than a Dutch lady in a tiny miniskirt on a bike.
I was still renting an apartment. By this time I had a local contract. I continued to line the pockets of the owner of the property, who probably spent the proceeds on hair gel and brown pointy shoes. Renting was convenient, hassle free, and perfect as I had the option to give notice on the apartment at any time and was free to leave with only a couple of months notice.
The three year itch
After three years, like a lot of expats I know, I was in a state of flux. Even though I had a local contract, thoughts of leaving the workers paradise known as the Netherlands and returning home, was still in the back of my mind. On the other hand, like most sensible people, I despised paying the extortionate rental prices often demanded in Amsterdam and Den Haag.
Common concerns about buying property are:
- What if I need to return home? (Who would leave the greatest country in THE WORLD and go back to some hell hole like London?)
- All the legal stuff is in Dutch
- How do I go about finding the right place for the best price?
- What size of mortgage can I even get based on my salary?
- Does my expat status count against me if I want to buy?
I shared the concerns above, which weren’t helped by an initial meeting I had with my bank. That I had the thirty percent tax ruling caused quite some confusion, and they were clearly not sure how to deal with mortgages for expats.
Reasons for buying a property in the Netherlands
If you live in Amsterdam or Den Haag, are on an indefinite contract, and have been renting for longer than three years, I have some advice for you. Withdraw the amount of money you pay in rent from the bank. Find a nice open space, and then set fire to the money. You may as well, as that’s what you’re doing every single month while renting an apartment.
Even if you’re not sure how long you’ll be in the country for, you really should consider buying a property. The Dutch property market is incredibly stable. Yes prices took a hit after the 2008 crisis, but what you don’t see in the Netherlands are the massive fluctuations in price that have occurred as a result of the crisis in Dublin and other places.
As well as making a sound financial investment, even if you decide to leave, the most ‘tolerant’ country that ever existed, you’ll still be able to rent the property out, at a price that will cover the mortgage and leave room for a small profit as well.
If that doesn’t convince you, the biggest advantage is no longer having to deal with rental makelaars, who are ever present, while you’re looking for an apartment. Once you’ve moved in, they have a habit of disappearing faster than bitterballen at a company borrel. This can be especially annoying if you fall asleep on the sofa, only to wake up next to a mouse, operating the TV remote control, looking for documentaries on cheese making.
Talk to an expert
My apologies if I’ve gone on a bit, but this is something that I feel passionately about. Being an expat, and getting the best possible deal with banks, makelaars and finding the right notaris etc, is best arranged by using independent experts that understand the complexities of expat financial and tax situations. For this reason I advise talking to Expat Mortgages. They’ve been in business for over 23 years, and have helped many expats in purchasing property. One of the interesting things about them is that they only deal with expats, and won’t look at you with a shocked expression on their faces when you explain that you have the 30% ruling. I know a number of people that have used them. Unfortunately, at the time the Shallow Man bought his former bachelor paradise pad, I hadn’t heard of them, so struggled alone, in a sea of confusing bureaucracy to arrange my mortgage, something that you don’t have to do if you use them.
Truly, the things I do for my readers!
No confused bankers were hurt during the writing of this post.