Long-term investment opportunities in Amsterdam
A traditional building in the canal district
- Historically, the core of the city of Amsterdam has been the most lucrative area for real estate investors.
- The combination of high yields, as a function of a near-permanent shortage of rental homes, and continued appreciation of all real estate, make for extraordinary returns to the prudent investor.
- Acquiring such properties now, ahead of the next boom, should be a strategy of all seeking a long-term investment in Amsterdam real property.
The opposite face of Amsterdam
The city of Amsterdam is known by many as a centre for culture, tourism, the arts, entertainment and a diverse history.
- However, Amsterdam's ZUIDAS (South Axis) is a major, modern centre of international business. Its location, just South of the old city, provides the perfect infrastructure with easy access to the airport (Schiphol), to the highway system and to all forms of public transport.
- To add a parcel of this booming area to one's portfolio, makes sense.
Everybody must live somewhere
New residential areas, somewhat styled to the tastes of the historic centre, surround the original city.
- With near-zero vacancy rates and waitlists in all parts of the city, it would make nothing but sense to add recent residential construction to one's portfolio.
- Lardlords can pick and choose the most suitable tenants, due to the enduring housing shortage.
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Amsterdam Real Property - investment strategies
More than building on historic significance
Clearly, the city of Amsterdam is known the world over. It's a haven of eclectic freedom and an unbeaten wonder of architectural and cultural splendour.
The city is also a developing investment opportunity. A three-pronged investment strategy for Real Property in Amsterdam would include:
- Properties located in the historic heart of the city. These would include mostly residential properties but also possibly some commercial, retail and mixed-use offerings;
- Business, commercial en industrial locations (also bare land and properties under current development) and possibly even institutional buildings;
- Some recent stock residential buildings either in the core of the city or in one of the more recent developments surrounding the main development areas.
An alternative to a get rich quick scheme
To buy now and sell tomorrow or soon thereafter may sometimes yield a pleasant return. It is, however, not our field of operation. We wish to share long-term goals with you:
- A substantial return on investment of the properties through decent management in ongoing rental revenue that should be increasing steadily over the years;
- A capital gain on the investment if, at some time in the future, you wish to sell part of your portfolio or all of it;
- A currency speculation component, based on the assumption that investments in € will perform more favourably than other currencies, particularly when viewed as against $-based economies.
How to manage an Amsterdam investment portfolio
Buy a property and the money will just come pouring in
Obviously, that is not the modus operandi we recommend. To manage any real estate portfolio, no matter where, requires careful planning and continuing oversight. We believe that it's prudent to view tenants, even in a heated market like the one in Amsterdam, as clients that need to be catered to at (almost) all times.
Find a property manager
Many property management companies are available. We know the market to the point that we are comfortable making certain recommendations in that regard. You may retain one of those recommended management companies, you can select your own, you can do your own management or you can let us handle the management details for you.
What a manager will do for you
What a good manager will do for you (the property owner) is multifold. The most important item on the list is, of course, to rent out the property and keep the tenant happy so they can be retained for a long time. Other than that:
- A manager deals with the day to day issues as they may or may not arise at the property;
- Makes sure that services are retained and suppliers paid, taxes are up to date, repairs get flagged and dealt with;
- Liaises with tenants and prospective tenants, collects and returns deposits and rents. But most importantly:
- Stays in touch with the owner and provides timely updates and financial reporting.
Amsterdam tenant selection strategies explained
For ever a market shortage of rentals
Probably the most remarkable feature of the Amsterdam rental market (residential and commercial) is the tremendous market shortage. This problem has existed for as far as history goes back - with various parameters contributing to its continuation. The problem has not got better and is not expected to improve over the next decades, if ever.
Desparate tenants
Where there is a continuing shortage of supply, tenants will generally accept conditions that otherwise would be unthinkable. Outside of the social housing market, there are virtually no legal restrictions as to what a landlord can demand. Interestingly, tenants will generally comply.
Examples of landlord domination
A landlord can legally ask for:
- Detailed income and employment statements, review of bank accounts, information from previous landlords, a credit check, tax information and accountants declarations;
- A security deposit of up to three month's rent; recurring service fees;
- Verification of identity (passport) and copies of bank cards;
- The tenant to supply flooring, painting, appliances, drapes, light fixtures and such;
- To refrain from smoking or keeping animals and to limit the numbers of occupants.
Landlord in charge
Since the landlord is so strongly in charge of the process, due to the market shortage, they can select the best possible tenant, reducing the chances of tenant damage, rent skipping, payment problems and vacancies in general.