First deal - Student housing in The Netherlands

[Ivor Grisel]

Investment Info:

Appartement, rented out to 4 students. Located in Arnhem, Netherlands.

Purchase price: €171.000

Cash invested: €0 on appartement itself, about €5000 in closing costs

What made you interested in investing in this type of deal?

Students are a steady source as tenants go. There are always more students than rooms, especially for the low rents.

The appartment itself is nicely located (next to a park) and has two floors. Exit strategy is to improve the state and sell it to a couple (or rent it out if enough cash flow).

How did you find this deal and how did you negotiate it?

Real estate agent that only does rented out properties. Negotiation was just making an offer.

How did you finance this deal?

Second mortgage on our house, interest only for 10 years. Planning on paying that one down with the cashflow, buy we wanted some flexibility with cashflow. For a next step, we would get a mortgage on the appartment and get either a cheaper property or leverage it and get a bigger one.

How did you add value to the deal?

As there are tenants already, none yet. But as soon as one moves out, fresh paint. And on the long run, maybe remove carpet and put pvc flooring in.

What was the outcome?

Nice cashflow, but mostly doing first steps.

Lessons learned? Challenges?

First deal, so learned everything. Financing, rules and regulations, calculating deals, etc. Biggest lesson was that you need to find good partners. The real estate agent turned out to mostly just have deals, but was a mess in regards to providing documents and handling the deal.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

For people in the Netherlands, Arnhem en Nijmegen area: vastgoed beheer Gelderland. Great communication, good pricing, just a tremendous help and boost in motivation.