Investing in the Dutch real estate market is far from easy for modest investors these days. The market is highly changeable, high interest rates show no sign of going away. The certainty once associated with real estate appears to be a thing of the past. But there is still hope, especially for those modest investors.
What exactly is happening in the world of real estate? Once, real estate entrepreneurs would happily cycle through a wealth of houses, but now the sector appears to be in stormy waters. An amalgamation of problems has turned the once glorious tide, landing both investors and tenants in a sort of residential no man’s land. Dragging inflation, high interest rates. Government interventions by Rutte IV, which were meant to meet the high demand for housing, only have a stifling effect. Can we slow down for a second, you can hear investors shout. The rest of the Netherlands meekly drags behind. The international market poses an alternative, though only accessible to a select few.
Guaranteed returns
But when financial security is compromised, companies often display extra resilience. Was it Churchill who said you should never waste a good crisis? Financing company Pearl Capital saw opportunities when the real estate market started to destabilise. They came up with the idea to facilitate real estate loans with a guaranteed interest rate of 6 percent for the lenders. With other parties, that number tends to fluctuate and depend on the project. “We thought it would be a good idea to fix the interest rate,” explains Max Weterman, investment advisor at Pearl Capital. “We don’t work based on a prognosis at Pearl Capital, we simply pay out a fixed interest rate of 6% every quarter. The minimum investment is €100.000.”
“For many, real estate was simply a way to make money. Now that the market and regulations have changed, many have sold their properties. For them, investing in loans is a simple alternative to still make money in the real estate sector.”
Risk-free
Lenders invest their money on an 18-month basis with Pearl Capital. Shorter terms carry less risk, explains Weterman: “If the client wishes to continue, the term is automatically extended by six months each time with no additional efforts required. If they do need to liquidate their money, there is no years-long wait. That offers reassurance.”
Removing hurdles
The real estate expert believes that removing the burden for the client is the secret sauce that makes the Pearl Capital formula successful. From notary costs to taxation, Pearl Capital wants to make the process as simple as possible for the investor. This approach works: the company has been growing steadily. Another relevant factor are the properties they invest in. These have to be of high quality, which offers additional security for investors. “That’s also why we have the 1st registration on the mortgage, as well as requiring borrowers to undersign the loan in private capacity. There’s a huge demand for tranquillity and certainty, which is exactly what we provide,” Weterman concludes.
Source: mtsprout.nl
