Don't let your savings go to waste and choose real estate!

We have known it for longer than today. The money on your savings account yields nothing. And this will not change immediately, reported De Tijd recently. On the contrary, there is no prospect of higher savings interest rates and inflation still seems to be on the rise. So what alternatives are there to keep your savings from evaporating? 

Shares and real estate are seen as the most interesting investments to protect your savings from inflation. Frédéric Vandenhende of Investr, a platform for real estate investors, says the following in De Tijd: "If you want to protect your savings from inflation, real estate is the way to go. There is not only the indexation of rents, the value of your property also evolves with inflation." He advises anyone who wants to invest in real estate not only to do so with their own funds, but also to finance it with a loan. Interest rates are historically low. "If your net rental yield is higher than the interest you pay on the loan, you already benefit from financial leverage in the first place. Moreover, inflation erodes the loan repayment."

According to Vandenhende, the choice of property is crucial to making it a profitable investment. "The most important question is whether you can attract the right tenant for the property. Vacancy is the death knell for investment property. Set a realistic rent and aim for a stable tenant," he says. Those who monitor these things should be able to achieve a rental return of 3 to 5 per cent, according to Vandenhende. "Beware of real estate projects that promise 9 or 10 percent returns. That simply does not exist. Either the rent is not sustainable and there is a risk of vacancy, or they are juggling with figures," he says.

According to Vandenhende, real estate prices in our country will be supported in the coming years by a growing rental market. "The rental market in Belgium has grown in recent years from 25 to 29 percent of the property market, but is still far from the 50 percent in neighbouring countries. In Belgium, renting is still seen as a marginal market, but that is changing. A new generation that does not want to cling on to a home will ensure a strongly growing rental market," he concludes.

Source: De Tijd