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Date: 20 November 2023

Invest in real estate abroad? “Plenty of opportunities at home”

With the real estate investment market in the Netherlands seemingly at an impasse – marred by stricter rules, increasing interest rates and negligible returns – real estate investors seem to have only one way to stay afloat: move their investments abroad. Ibiza, Croatia, and even faraway places like Bali are on the rise. According to Max Weterman of financing company Pearl Capital, this is no more than a passing trend: “There are plenty of investment opportunities in the Netherlands.”

More and more Dutch real estate investors are pessimistic about the future of real estate in the Netherlands. Time to find new horizons, they claim. Loudly expressing their intent, they go to the Italian coast, count the yachts, and assume the money will come rolling in. Inevitably, the question arises: what has caused this exodus of real estate investors, and is their concern justified?

Stormy weather

According to Weterman, the panic in the Dutch market is misguided. “That nervous response – looking across the border for alternatives – is somewhat understandable, but unfounded,” he says. “At Pearl Capital, we reconfirm our trust in the Dutch real estate market in several ways. Pearl Capital offers investors the opportunity to invest from €100.000 in commercial mortgage credit with real estate as collateral, for which they receive 6% interest annually, paid out quarterly. Thanks to the first registration on the mortgage and a conservative loan-to-value, Pearl Capital ensures that borrowers fulfil their duties, making sure investors enjoy a fixed interest rate.”

Financial security

That security is very important, according to Weterman. “Investors are worried about the state of the sector, especially because interests seem unstable. Many financiers make their calculations in advance based on a prognosis. Like with any other investments, the interest can turn out to be negative. That’s not the case with us. Pearl Capital uses a model where interests are fixed during the 18-month term of the contract. It doesn’t matter how much the market fluctuates around it: the interest rate stays stable.”

Endless bureaucracy

The promises offered abroad are often wildly exaggerated, adds Weterman. “In other countries, especially in the south, you are often competing with local players. They have a serious head start, so you should assume you’ll be fighting bureaucracy and rising costs.” At Pearl Capital, on the contrary, the bureaucratic element is limited, because the company acts as a financier and takes on all of those administrative elements. “Of course, there’s something to be said for an adventure abroad. But don’t forget: there’s no sweet without sour. The market in the Netherlands is still profitable, and to be honest, it is less risky. Don’t count us out yet.”

Source: ondernemers.com

Bas

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