Understanding Your Result

ROI vs. Gross Yield: What's the difference? When analyzing Dutch real estate, you will often see two different percentages. It is crucial to know the difference:

• Gross Yield: This is simply your annual rent divided by the purchase price. It gives a quick snapshot of the property's potential but ignores costs.

• Net ROI (Cash on Cash): This is the most important metric for investors. It calculates your net profit (after paying the mortgage, VvE, and taxes) divided by the actual cash you invested from your own pocket (down payment + closing costs).
  

How to improve your rental ROI? If your calculation shows a low or negative return, consider these strategies common in the Netherlands:

1. Interest-Only Mortgages: Many investors opt for an "Aflossingsvrij" mortgage for up to 50% of the property value. This lowers your monthly obligation and significantly increases your immediate cashflow.

2. Energy Label Improvement: Under the Dutch point system (WWS), the energy label is critical. Improving a label from G to A not only increases the property value but may also allow you to charge a higher rent in the free sector.

3. Renovation: Adding an extra bedroom or modernizing the kitchen can help you command a premium rental price.
   

Answering common questions about rental ROI

Does this include Box 3 Tax? No. The Dutch wealth tax (Box 3) is calculated based on your total net worth and varies per person and fiscal partner status. We recommend consulting a tax advisor for your specific situation.

What are the closing costs in the Netherlands? For investors (buy-to-let properties), the transfer tax (overdrachtsbelasting) is currently 10.4%. When you add notary fees, valuation reports, and mortgage broker fees, you should budget roughly 12-13% of the purchase price as "Kosten Koper" (Closing Costs). This calculator automatically adds these to your 'Cash Needed' estimate.