There are three main types of returns in real estate: rental yield, financial return through leverage, and capital gains upon resale. The total return varies depending on the type of property, its condition, and its location.
For existing houses and apartments, total returns typically range between 3.6% and 4.8%, while for new developments they range between 3.5% and 5%. Investing in garages can yield around 4%, while student housing may generate returns exceeding 4.5%.
Rental yield reflects the relationship between rental income and the total acquisition cost of a property.
For existing properties:
For new developments:
The total acquisition cost includes not only the purchase price, but also additional expenses such as:
Once the lease agreement is signed, you can delegate the financial management to a professional property manager such as TREVI. We take care of rent collection, follow-up in case of non-payment, and all technical management tasks, from handling issues to coordinating maintenance and repairs.
Using financing can increase your overall return, provided that the rental yield exceeds the interest rate of the loan.
In periods of high inflation, borrowing can be particularly advantageous, as the real value of the borrowed capital decreases over time.
At some point, you may decide to sell your property. Capital gain occurs when the selling price exceeds the total investment.
To maximise potential capital gains, it is essential to:
Key factors include:
It is generally recommended to hold a property for at least 7 to 8 years, as capital gains can be relatively limited in the first years due to acquisition costs.
In Belgium, if a property is sold within five years of purchase at a profit, a capital gains tax of 16.5% (plus local taxes) may apply.
Real estate returns vary depending on the type, location, and condition of the property. While attractive returns are sometimes promoted, it is important to adopt a realistic and critical approach.
Net yield takes into account additional costs such as:
This provides a more accurate picture of your actual return.
Real estate can offer attractive returns, but requires careful consideration at every stage: acquisition, rental and resale.
TREVI Rental Management supports you by handling both the financial and technical management of your property. From rent collection and maintenance to strategic advice and resale support, our professionals take care of everything so you can focus on what matters most.
Contact TREVI today to discover how we can help you optimise your real estate returns.
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