I have been a real estate agent for 10 years in Belgium in the hyper-competitive market of a popular touristic coast town called Knokke. About 80 real estate offices for a population of 33K (excluded second residency)
Is it hard to find deals in Belgium? Yes, if you look in the mainstream places:
- It's very rare to find a good deal with a real estate agent in Belgium. IF they have a good deal, they either buy it themselves or they always work with an exclusive little club of high net worth investors/renovators. This way the real estate agent gets their commission twice. Once for the sale before renovations and then a second time when they re-sell it after renovations or construction of a new building. As a small investor, it is hard to get into this "club" to access to the really good deals.
- It's hard to find a good deal on a popular real estate listing sites like "immoweb". When it is a "private" sale people always overestimate the value of their home as they compare their home with other listings they see on that site which are overpriced most of the time. A real estate agent will only put their listing (and pay for it) after he has exhausted his own mailing list. So the best deals are already gone before it's placed on these portals.
So how to find good deals in Belgium?
- Think outside the box, look at commercial buildings or other functions, can you convert them to living places? Seen some really profitable projects of industrial buildings converted into lofts. Doing something similar on a small scale now. I know people who divide these buildings, sell the majority to offset the purchase price of one unit that they keep to rent out. This way they get a very nice cashflow.
- Auctions. It consumes a lot of time, as you have to be physically present in Belgium. I did more than 20 auctions before I made a good deal. But worth it.
- Know your regulations very well. I know a lot of people who made a killing by just knowing the building regulations and then finding deals directly. Some owners don't ever realise the potential their building has. Maybe you can buy a house and build a penthouse on top, convert to multi-family, or split building plots.
- Look outside the regular rental market. Some people are doing very well in Belgium renting out small storage to shop owners. They bought an industrial building, filled it with shipping containers and rent is out individual containers. Student housing is still profitable (although there is fierce competition in cities like Ghent and Leuven), or Airbnb.
Rest of Europe
- Germany has a very good renters tradition and great economy. Looked at this market for some time, but haven't pulled the trigger yet.
- Also very interesting market are the ski/mountain resorts in Bulgaria. You can buy apartments for 20-30K. I believe this market has a huge upward potential as you can see the rising number of eastern Europeans in ski resorts in Austria and France. The infrastructure is getting better and better.
Financing
- Bank financing in Belgium is very favourable right now . Currently lending at 1,3% annual interest on a 15 year loan. You can even do better. Think that is hard to get in the USA. Inflation goes harder than that. That is as a small investor. As a more advanced investor, you can get loans at EURIBOR + 0,5% http://www.euribor-rates.eu/
- Do creative financing. Ever heard about a collateral loan? You can use a high yielding dividend portfolio (most of them in REITs) as collateral. Something I'm working on right now. Talked to several large banks that offer this. Instead of giving a downpayment, you can use a high yielding dividend portfolio as a collateral to get a 100% financing. I like this way of financing for multiple reasons. I wrote a post about this on my blog http://supersnowball.com/collateral-loans/
