My first apartment | Real estate property #1

At University I lived at first in a 12 m2 student room. It was big enough to fit in a small bed, a closet, lavatory, 2 person couch, desk and tv.

I actually found an old picture of the room:

It looks a bit like a jail room but I had some of the best years of my life inthere! Despite it’s size I actually managed to fit 10 people inthere. Granted some did had to sit on the floor but when you are in your early twenties. Rent was paid by my mom at 190 EUR per month.

After a few years I put myself on the waiting list for a bigger room and got a 16 m2 room for 2 years. My very last year I spend in a studio that was about 25 m2. The studio was a bit more expensive at about 260 EUR. So I moved up and up very slowly over the years.

When I started to work I stayed inscribed at the university so I could rent my studio for one more year.

I used the time to search for a new place. I searched for privately rented studio’s, but they were small and costed 400 – 500 EUR. Way overpriced. I knew I had to search for a home for myself.

The search commenced

And time was running out, after one more year I was going to have to leave my university rented studio. I needed something fast and did not had to many demands:

• Close to a Freeway of some sorts, so I could drive everywhere easily
• Close to the station, which was also the neighborhood I studied at
• In Gent, its a beautiful city, I was born there, had my family close and most of my friends live there or around there
• A place to store my car would be a plus
• Cheap. I didn’t want to pay to much.
• One bedroom, I didn’t think I would need more
• Outside space would be a plus but not a requirement
• I wanted to live at the South of Gent, also because it was much easier to go on the Highway from there

The easiest way to buy a place is when you really need one. I didn’t had that many demands. I searched for homes on the lowest segment of the market and ended up seeing about a handful. Here is a few things I checked out that stuck with me:

• A small duplex apartment close to the center with a terrace. One bedroom. It was listed for about 130.000 EUR. Eventually it sold for a bit more I heard.
• A house where when you entered you were conveniently in the living room, that also had a shower for some reason. It had 3 floors, but it was very narrow and steep. I remember thinking this place was only good to break down. It was listed for 140.000 EUR. It needed a complete renovation, but the location was excellent, located between the station and center
• A house that was Crooked. My sister was with me when we looked at it. She noticed it from the outside. I figured she was imagining it, until I went inside. It did had a garden. It was listed for 180.000 EUR and located at a good neighborhood.
• An apartment right outside Gent. It had a parking spot. It was pretty good and around 130.000 EUR, but I decided it was to far from the city center for what I wanted at the time

One reminder, these are all prices of 8-9 years ago. It will be impossible to find houses or apartments at these prices these days. Consider around a 3-5% rise in prices per year.

Purchasing my first property

At some point my eye fell on a one bedroom apartment, not far from where my Studio was located. It was listed for 140.000 EUR, and one garage was included. It was not so big, just 55 square meters. But knowing I came out of a Studio of 25 square meters it felt pretty big.

The entire building was bought up by a company who was making high level renovations and then selling off each apartment. In total there is 5 one bedrooms and 6 two bedrooms if I recall correctly, spread over 2 buildings, so pretty small scale.

The apartment itself had new well isolated windows, and the electricity was checked and approved for 25 years. There wasn’t really a kitchen and the heating was a bit old and communal. The walls were all purple with even a grey ceiling. In other words anything but my style!

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I thought about it for a day, and then made an offer of 130.000 EUR for the apartment. I was not nervous at all when doing this. I needed a place, and this was one of the best I found in the last months searching in terms of price / quality.

This was a time when you could still try to lower the price in Gent. I got a counteroffer of about 136.000 EUR and accepted it the same day.

Once your offer has been accepted you have 10 days to put down a 10% deposit. In Belgium once your offer is accepted you are required to pay the 10%, even if you change your mind. Additionally you need to go to the bank to get a loan. I got a loan at 3,45% interest rate, which was considered low at the time.

Additional costs:

• 4000 EUR costs for the notary arranging the deal
• 500 EUR costs for the bank arranging the deal (if I remember correctly)
• 500 EUR Insurance for when I would die and not pay my loan
• 6,5% taxes (low tax rate because of the small side of the property and because it was my first house)

A few days later I signed for the apartment and paid the deposit. Three months later it was mine. At the time it was rented out, so I had to give notice to my renters. You can give them a 3 months notice, but only if you decide to move in yourself. Which I was planning to so I did. They eventually moved out a bit sooner then expected, although I did had to live back home for 1-2 months to bridge the gap between renting my studio and moving to my apartment.

In the next years, as far as my budget allowed it I would do a few renovations:

• The walls and ceilings would get painted almost totally white, with an exception of one wall per room (one green wall in the living room, one blue in the bedroom)
• Also the bathroom tiles would be painted white
• The heating would stop being communal, and everyone in the building (5 apartments) would get their own gas – lower energy boiler (cost 3000 EUR)
• A new kitchen from Ikea would be put in (cost about 3500 EUR)
• A new floor would be put in the bedroom
• Put in a new front door (Fire safe and extra secure for Burglars) (1000 EUR)
• New bell system in the entire building (my share was 200 EUR)
• New roof on the building, including isolation (my share was 7000 EUR)
• One radiator was leaking so I replaced it (cost: 800 EUR)
• Of course I added furniture, but I kept it relatively cheap. I don’t think I spend more then 3000-4000 EUR on furniture in the end.
• Not part of renovation, but worth to mention: because its a small building with no elevator, the communal costs are rather low. Apart from the renovations they are about 400 EUR per year.

After the renovations…

In the end it looks like this:

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Apart from the outside improvements such as the roof, I do believe the inside had also improved considerably.

Some things I did not do (yet?):

• I did not put in a new floor in the living room / kitchen. Now doing it would mean removing and placing back the kitchen. I think my floor is ugly but at the same time its in good condition. However I its possible I will still do this the coming years.
• I didn’t put in a new bathroom. I only take a bath once a month and shower every morning. It would make sense to put in a shower, and renew the place, but I am not sure the little extra comfort is worth the investment

Most investments have been on the outside, and less on the inside, although I am very satisfied with the kitchen and bedroom right now.

I do hope to keep this apartment for a very long time. Its in a fast growing city, with faster growing prices so in the long term this investment will pay off.

Future plans with the property

I no longer have the same need to live in the city as I had before, and would prefer to move outside a bit and have some more space. Of course I would miss the ease I have to go to the center, shops and the station, but the additional space would make up for it. On top of that most of my family are living outside the city.

In the case that I purchase a second property, I believe I could rent this apartment out for 600 EUR / month (before I moved in it was rented out for 470 EUR), and that would be a nice boost to my passive income goal.

Of course I do need to find a second property first! The search is going on as we speak so stay tuned for a future blog about my current search.

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