How do you calculate the return on your investment?

The return on an investment will drive the decision-making process. Are you looking to invest in property and find out the return on your property? We can only encourage you!
Indeed, investing in property is an excellent idea for those seeking to invest prudently. Financial markets are often volatile and speculative, unlike the Belgian property market, which remains relatively stable.

Investing in property is therefore a prudent approach that will provide you with a regular income.
The first thing to do when making an investment is to calculate your borrowing capacity, i.e. the maximum monthly amount you are able to repay. Once you know this amount and the interest rate at which you can borrow, you can calculate your return.

Firstly, please note that several factors must be taken into account: the cost of any work required, property tax, an estimate of rental void periods, the impact on personal income tax, etc.
You can then calculate the return on your investment very simply using this formula: [(Rent x 10.5) / (purchase price + acquisition costs)] x 100

To take your investment projection further, please feel free to complete the spreadsheet we have created for you.

How should this figure be interpreted? Here are some pointers.

The first thing to know is that a distinction must be made between new-build and existing property. For the former, a good investment yields around 3%, while the latter yields around 3.5–4%.

Please note that these figures relate to a prudent investment. You can certainly take greater risks and, in that case, achieve a more attractive return of 7%, for example, but the risks of payment defaults, rental void periods or damage to the property are higher.

Now that you have learnt about the return on a property investment, if you would like to find out more about current developments in the property sector, we invite you to browse our blog, which is full of interesting articles. And if you would like to daydream a little about property, view our available properties.