Diversification of your portfolio
In terms of investment, diversification remains an important element, as experience has shown in recent years. We observe that the standard used by the Swiss Private Bankers, known for their prudence, affects 40 to 50% of assets in real estate.
Return on invested capital
The calculation of the yield in real estate is set by juxtaposing 2 elements: the rental yield + capital gain.
The yield is calculated by the formula:
Example of rental yield calculation
Rent : 850€/month or 10.200€/year
Purchase price: : 200.000 + 27.000€ notary and registration fees
In general, the yield of a property is calculated according to several criteria:
- Type of tenants
- Contract continuity
- Condition of the building
- Rental vacancy
In residential real estate, it is generally situated between 3% and 5% and can even reach 6% ou 6,5% in the case of renting furnished properties.
The real estate "track record" shows that a property gets to be appreciated as the years go by.
The average annual capital gain over the last 30 years on the Belgian residential market has reached 5%! We believe that the capital gain over the next 20-30 years will remain around 3.5%.
We can therefore summarize the 2 previous points:
4.5% RETURN ON CAPITAL (on average) + 3.5% CAPITAL GAIN (average value) = 8% TOTAL RETURN.
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Trevi is your guide
Have you always wanted to know if investing in real estate was right for you? Or are you interested in more information about attractive investments tailored to your needs?