Buying a house in the Netherlands as a starter
Is it possible? We will show you how!
It isn’t easy to buy a house as a starter in the Netherlands. I know all about it, because I am living example. You might have a large student debt or no savings at all and you live day by day, because you weren’t born with a silver spoon in your mouth. Yet, I will show you some achievable, easy and quick ways to achieve one of your resolution you have set for this year!
For the past years the Dutch government has made it harder to buy a house or even get a house with the social housing benefits, due to ‘regulating the housing market’. The question is: is it really working? But that is a topic for next time. Let’s focus on you again. This may lead you to either living in a studio, renting a single room or having a private rental apartment/house (which you actually can’t afford).
I will show you some of the options of how to purchase your own house.
Option 1: You’ve got to get your hands dirty!
You can buy an old house through Funda (a Dutch online market place for properties) or any other similar platform. Most of the time, the advice is to buy the ugliest house in the nicest area. This will help you to acquire a potential sale when selling it. The houses in a good area are most of the times to good standards, which sell fast, and hold high prices.
The benefits of buying an old house is that you are eligible for an extra loan from the bank, added tax returns and benefits from the local council!
Option 2: In contradiction to option 1, you can buy a house in a disadvantaged area.
Why would you do that?
I know right, buying a house in a disadvantaged area isn’t classy. You would rather live in the bustling city or in highly commercial areas. But don’t forget, you need a hell of a lot of savings to get a 1-bedroom flat in a city centre. With the same money you can buy a whole house and even renovate the place in this so-called disadvantaged area!
And don’t forget, buying a house in a disadvantaged area has its benefits. The local council in the Netherlands always wants to create a safer and better environment for their citizens. Look at Amsterdam Bijlmer, for example, and check out pictures from around 7 years ago. The living standards have risen ten-fold. There is even scarcity, and rental prices have become phenomenally high. Similar examples are the neighbourhoods of Charlois (Rotterdam), Odor, Overvecht etc. SELLING RETURNS WITH OVER 10% YIELD (And was the highest in the Netherlands in 2017).
Option 3: Buy your rental house from the rental company or landlord.
I will give you an example: the houses in Crooswijck, Rotterdam were around €600 to rent per month. Tenants were given an option to buy their houses for approximately €175,000. The apartments were renovated by the private investors/local council and landlords and sold for reasonable prices! Now one house is worth more than €350.000, and yet the new landlords pay a mortgage just a little over €600 per month. Whereby citizens around the area are paying between €600 and €700 for a one-bedroom flat.
In the Netherlands there are housing corporations; these are institutions that are set up with the main intention to make profit. It’s regarded as a semi non-profit. They most often have a small number of houses that they want to sell off, due to some minor damages or simply because they are not lucrative assets anymore. With some strong negotiations, you can get some of the damages fixed or make the price drop tremendously.
Option 5: Build your house! Yes, you heard me well – build your own house!
This is an option not set aside for the financially elite – starters can also build their own house!
- You need to have a piece of land (which you can obtain from the local government/municipality).
- Enrol yourself in a CPO (this is an organization that helps you build a house, whether it’s for corporate or individual use. It’s just a matter of enrolling yourself in such organizations.
To buy a house in the Netherlands, you need to have 6% of the total selling price of the house. For instance, if a house is priced at €175,000, you will need a sum of €10,500 to be able to buy the house. Whereby you get around 3% back in next tax year. Tip: aim to buy around the end of the year so that you just have to wait maximum 5 months to get your returns back.
If you want to know how to buy a house in your country of residence, just HOLLA at me!
Now is the question: “I DON’T HAVE A PENNY TO spend. How do I get a house?”
In my previous podcast episode I showed how to go about your new year’s resolution and following your dream (even when nobody else believes in you.)
Buying a house is a big thing and its feels like throwing money out of the window. But yet you can do it.
I am doing a huge project back in Ghana. I needed €19,000,- in 5 months. And I only had €9,000,-. So how the hell did I get the 20k in 5 months?
Well, it’s called financial management!
I earned €3000 a month. My cost a month was €1600,- a month. What did I do to get this sum of money in a short period? I WORKED MY ASS OFF.
- Cut down on my expenses, starting with selling my car. I was saving €300 a month, and I bought a bike.
- I figured out how to get small income by buying and selling for family and friends. This I used as a pocket money to buy personal stuff.
- Instead of eating out or ordering food or spending a lot of money in the groceries shop, I cut my spending on food from €250,- a month to €50. YES, it’s possible.
- I made a list for the whole month of the food I am going to eat every week: breakfast, lunch and dinner, which came to €12,50 a week. I made some good African food.
Food to buy
- Waakye with chicken stew
- Ghana jollof rice with tuna (instead of meat much cheaper). And grilled chicken wings instead of chicken thigh
- Macaroni Bolognese, a lot of vegetables from the market
- Light soup with fish, which is just €3,- for a big pan.
- And some bread put it in the fridge and bread spreaders.
- Syrup and sparkling water
- Fruits from the market
- A bag of crisps.
This is €15, -, I would use the earnings I made as well to add a bit up.
I saved €9,750. I lacked €250, – which I borrowed from my bank.
- No buying clothes.
- A HUGE FOCUS!
This is how I saved €10,000, – in 5 months for my huge project. This is how you could manage and save the 6% for the down payment of your mortgage.