Topical is undeniable. The number of points a rental property must meet to be allowed to be rented out in the free sector (a freely determinable rent) in the future rises to 187 points. As a result of this measure, many properties currently in the free sector will have to take a rent reduction by law. For many investors, this means that they will have to sacrifice significantly on their return on investment.
Partly because of the WOZ cap (read more), many rental properties will not reach this minimum limit. However, not all rental properties face a WOZ cap. This is because there is an exception for so-called COROP houses. We wrote an article about this type of house in the past.
COROP houses are located in one of the COROP regions in Amsterdam and Utrecht. These flats were built or renovated between 2018 and 2022 and are smaller than 40m2 in area. For this category of rental housing, the WOZ cap does not apply, and the total WOZ value is included in the point count. This makes many of these flats in the Amsterdam area, even in the future situation, far above the minimum number of points required to be allowed to rent at a deregulated rent.
An example:
After briefly researching on Funda, we find the following flat: Rookmelderstraat 70
This ad tells us that the building will be completed in 2021 and, according to the NEN2580 report, has a living area of about 36m2. Because of this data, the WOZ cap is dropped when making the point count.
If we carry out a point count based on the photos, floor plans and information from the WOZ Valuation Office, we have at a result of 207 points, so the flat is rentable in the free sector.
We estimate the current rental value of the flat to be at least €1,500 per month. The flat is for sale for € 324.000,-. A simple calculation makes the gross initial yield on this purchase will be around 5%.
Besides a stable return on investment, and the certainty that the flat can be rented out in the free sector, it is also likely to be maintenance-free due to its recent completion and good energy label.
Over the past few years, the Dutch government has shown a negative attitude towards property investors. The new regulations also do not improve the climate for property investors in the Netherlands. Nevertheless, in the long run, real estate still proves to be one of the best investments. Moreover, we see that the rental market in Amsterdam is stable and growing. COROP flats are proving to be a promising investment, especially during the new legislation.
Want to know more about renting out your flat in Amsterdam, or buying a COROP flat as an investment? We would be happy to help.
Investing in COROP housing can be one option to still make it to the free sector with a small property.
