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Is it time to sell your property? And what to do with the extra cash?

  • 5 days ago
  • 3 min read

The past couple of months have been an absolute real estate whirlwind for Carlos and me. Together, we bought a new apartment, I sold my studio, and right now, we are in the middle of selling Carlos’s current apartment.

 

To say that dealing with property in the Netherlands is overwhelming is an understatement. It’s easy to get stuck in analysis-paralysis, wondering which path will serve your future best.

 

If you own a home or a rental property and have been struggling with the "keep or sell" dilemma, this article is for you.



Three reasons to sell

 

Before we can discuss the math of selling (the HOW), we have to uncover the drivers (the WHY). From personal experience and client situations, I observed property decisions falling into these three categories:

 

  1. Changing life circumstances: Relocating abroad, expanding the family, or separating from a partner.

  2. Emotional & lifestyle needs: Outgrowing a neighbourhood, wanting a garden, or simply because you don’t like the building.

  3. Financial considerations: An inability to afford the mortgage, or an asset that is suddenly bleeding cash.

 

Look at your own property: why would you consider selling it?

 

While changing life circumstances and lifestyle needs play a big role in our decision-making, the recent regulatory shifts in the Netherlands also mean that financial considerations must now be leading.  

 

Remember: a decision to sell is almost always a decision to deploy capital somewhere else.



Case study #1: How my studio became ‘social housing’

 

I bought a studio part of a new construction project in 2017 and moved in by 2020. When I moved in with Carlos at his place in 2024, renting out my studio was a no-brainer: I could charge a free-market rent of €1,980 per month on a temporary contract, cover my Box 3 wealth taxes and other property costs, while holding onto an asset that with time would continue to appreciate.

 

By 2026, the rules completely changed the game:

 

  • The point system: Under the tightened rental point regulations, my studio's small size forced it into the social housing sector. My capped maximum rent dropped to €932 per month.

  • The contract lock-in: Temporary rental agreements are effectively gone. Forcing myself into a permanent tenancy at a capped rate meant destroying 30% to 40% of the property’s underlying sales value.

 

The asset no longer generated positive cash flow after Box 3 taxes. The decision was clear: I sold it earlier this year.



Case study #2: Carlos’ forced decision

 

Carlos bought an existing apartment in 2022, with the intention to one day rent it out. Once we decided to purchase a home together, he faced the same question: Should I keep my current apartment as a long-term wealth builder?

 

We ran the calculation through the new point system. His apartment barely squeaks into the mid-sector tier, capping his maximum legal rent at €1,228 per month.

 

That capped rent cannot even cover his monthly mortgage payment, before you even factor in repairs, maintenance, taxes, and insurance.

 

The Dutch regulations made the decision for him. He’s selling.



What’s the best thing to do with the cash, if I sell?

 

Remember how I said that a decision to sell is almost always a decision to deploy capital somewhere else?

 

When people sell one property, their immediate reflex is to put 100% of the cash proceeds into their next home to minimize their new mortgage.

 

While that feels safe, it is often an incomplete strategy. Consider the opportunity cost of where your wealth grows fastest:

 

  • In property: Over a 9-year holding period, my studio yielded an annualized return of roughly 7%. Carlos's shorter-term property return is estimated between 0% and 2%.

  • Alternatives: Over the last decade, a diversified global index fund (like the FTSE All-World) averaged around 12% annualized, while tech-heavy indexes (like the NASDAQ 100) surged closer to 20%.

 

Instead of blindly burying all your cash in brick and mortar, use the Total Cost of Ownership (TCO) framework: calculate your prospective home's absolute cost: mortgage, transfer taxes, notary fees, yearly municipality taxes, VvE (home owners' association) fees, and all other phantom costs like those for repair and maintenance.

 

If that total TCO is lower than 30-35% of your net household income, you can comfortably afford to maximize your mortgage, let inflation erode the debt over time, and invest your surplus cash into liquid, diversified, low cost index funds.

 

If your TCO stretches past that 35% boundary, ask yourself: How much of this new property is a need versus a want? Could I still get 80% of what I want with a different property AND keep that TCO within limits, so that I could invest my capital in assets that compound over time?


This is the decision-making process Carlos and I have been following, helping us take confident, numbers-backed financial decisions about our home ownership.


We can help you do the same, just give us a shout.


 
 
 

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