Engel & Völkers Licence Partner Regional Office Belgium > Blog > How is the market for investment properties in Liege doing?

How is the market for investment properties in Liege doing?

For several years, the city of Liege has been a real estate success with a rapidly growing activity.

What about real estate?

The real estate market offers many investment opportunities, there are currently more than a hundred buildings for sale on postal codes 4000 and 4020.  With such an offer, how can we separate the good products from the bad ones? Here are some tips to help you answer them...

What are the types of buildings in Liège?

  • 100% residential buildings, composed of several apartments with 1 to 3 bedrooms.
  • Mixed-use buildings with a commercial ground floor and apartments on the upper floors. The commercial rent on the ground floor will be subject to the IPP.
  • Buildings with student kots.
  • Commercial buildings only (mainly located in the city centre) and in shopping streets whose rents are also subject to the IPP or ISAOC if the investment is made through a company.

What relationship can we hope to obtain?

The performance of a reporting building will depend on several factors such as :

  • The number of units: the more units there are, the more rental work there is to be done (change of tenant, visits, negotiations, inventory, etc.), the higher the return required by investors.
  • The quality of the tenants and their regularity of payment.
  • The geographical location, which has an impact on the rents obtained.
  • The type of tenants: commercial and office leases are subject to the IPP.
  • The fact that the building is in urban planning order or not.

The investment properties that our local franchisee partner recently sold in Liege offer a profitability of 4.4% (building of 3 units in urban order) to 6.8% (building of 10 units).  These returns are calculated on the basis of 10 months' rent (1 month's rent used to finance the withholding tax on real estate and 1 month for the change of tenant or for a provision for costs) and deed in hand, i.e. the acquisition costs are included in the total amount of the investment.

To calculate the return on your investment, the formula is as follows:

Profitability = (monthly rent x 10) / (purchase price x 15%)

Is this the right time to invest in Liège?

The answer is YES

Real estate prices in Liege have certainly risen sharply in recent years, but given the interest rates that are still quite low and the potential for development, Liege remains a particularly popular place.  Except in the event of a major financial crisis, there is no obstacle to the continued growth of real estate in Liège.

What do you need to know before investing?

With a small amount of capital and thanks to the loans that banks can grant, investing in a rental property is always a good investment plan, and over the years, you build up a small amount of real estate capital, with the rents received becoming a nice annuity once the loan has been repaid.

But before investing, we advise you to pay attention to the following points:

  • Is the building in urban planning order?
  • How many rental units?  Is the rental risk shared?
  • What types of leases have been concluded? In other words, based on tenant turnover, how much time will I spend on this investment?
  • Are there any possibilities of resale by cutting, or expansion?
  • Are rents subject to tax?
  • Is the building sold as a company? In which case, it will be necessary to use an accountant or a corporate broker such as our partner Copilot.

If an investment in a rental building seems too important, it is also possible to invest in an apartment that can be offered for rent. There is a strong demand for apartments for rent in the centre of Liège.

In summary

Buying a rental property is an excellent investment. As with every investment, there is always a risk, but by preparing the file well and analysing each aspect perfectly, you reduce it to make it a great deal.

Whether you are looking for a rental property or you are an owner wishing to resell your property, our real estate agency Engel & Völkers in Liege will advise you and fully support you in your investment project...

Contact us now
Engel & Völkers
Licence Partner Regional Office Belgium

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