It’s a special time of year... Late August, people are back from vacation and some are wondering if they really want to "work" anymore. The illusion of a different, cooler life... All this talk of "financial independence", is it really possible?
Our purchasing power has taken a serious hit, and the vacation budget certainly hasn't helped. Let's face it, we're going to have to get back to work…
Why not put those long hours of reflection on the beach to good use with my real estate investment project?
Well, the real estate market has changed. My borrowing capacity has melted like snow in the sun. Money is expensive if you borrow it, and on the other hand, my liquid assets are paying off.
So why should I take the plunge now... It would be stupid.
Well, no, it's not stupid!
The BuyerSide team can prove it to you, with a few figures to back it up:
Mr Stupid and Mr Smart both have €500,000 in equity.
Mr. Stupid decided not to invest in real estate at all, opting for a "state bond" with a net yield of 2.81%. Mr. Smart, on the other hand, thinks he's finally going to buy his first investment property.
Thanks to BuyerSide, he's found a good deal in the Solbosch / Roosevelt district at 4.5% gross yield.
Who's right, who's wrong?
Let's try to decipher it all
In the end, Mr. Smart’s assets will be much more substantial. He will have used his real estate income to pay off his bank debt as he went along. Assuming that the value of the property has simply kept pace with inflation, Mr. Silly overall assets will be more than a million euros higher.
Although there may be some renovation costs to contend with over the period, the difference will of course remain very substantial.
On the other hand, financial independence will only really be achieved for Mr. Smart’s heirs, who will benefit from a property that has been fully repaid to the bank.
Do like Mister Smart and come to BuyerSide to discuss your future real estate investment project!