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Buying an apartment in Brussels while renting elsewhere

Last Updated on March 30, 2021 by Mr. FightToFIRE

It’s been a tumultuous two weeks. As you know I’ve been searching for my first home. I started that search 4 months ago and the original plan was to move in once I found the perfect fit. While I originally intended to take more time, I recently made two major decisions that turned my slow approach into a rapid one. From the title, you might have guessed already:

Yes! I bought an apartment!

Not only am I the owner of a new apartment that will be constructed in the coming year and a half, but I and my girlfriend will also move in together in a rental apartment this September.

Curious about how I will finance it? Well, in the meantime, I have a mortgage.
Because I’m still renting, I took the delayed payment option so I only pay interest for the moment.

Buying an apartment: an Impactful decision

No matter how you look at it these two decisions have a major impact on not only my situation but also on my finances.
The biggest financial impact is due to the purchase of my apartment. I bought a turnkey project as it is called (see inset for explanation), in the center of Brussels.

As it’s a large financial commitment, I’ll have to take a mortgage on it. I’m lucky to have two financial benefits:

  • Support from home: so I don’t have to take out a large loan relative to the total cost of the apartment.
  • Low long-term interest rates: It’s extremely low and given the worry for another recession, it’s not unlikely that they will remain low for the foreseeable future.

This makes the now the perfect time for a long-term mortgage. My goal is borrowing 250,000 EUR to 260,000 EUR over 30 years. This covers 64.55% of the total cost. With the support of my parents and my savings that I already have and will make over the next year, I can cover everything. At the current rates, a monthly payment of ~1000 EUR/month is realistic.

While it is a big decision, it’s one that gives me something to look forward to.

Bridging the gap

A bright future is ahead of me with the apartment in Brussels, but there is one slight problem; what to do between now and then? THe original intent was to stay at home but due to the temporary (student) nature of my girlfriend, we took the leap and seaerched for our own place to bridge the 1.5 year gap.

As you can imagine, for someone still living with his parents at age 29, this is something that will have a huge impact on my personal life. The biggest is living with my girlfriend which is an amazing feeling and is something I’m truly looking forward to. But at least for a couple of weeks, I will have to get used to the change in lifestyle.

All of my friends and family live near my parents and the location of my martial arts’ dojo is relatively close. As a result, once I move to a strange city I will have to get used to the distance and/or find a dojo in the area.

With this change comes a lot of new and exciting opportunities. The big one will be the freedom of having my place. Another nice benefit is that everything is close, including the cinema which I love to visit. Other pleasant changes are living in walking distance of the train station, a fitness around the corner and a big park.

Apartment "on plan"

A turnkey apartment or an apartment “on plan” is just that, something that only exists on a plan and has yet to be built.

The purchase and sale of such a new yet to be build apartment or house is subject to the Housing Construction Act, better known as the Breyne Act.

Breyne law

The Breyne Act of 1971 came about as a result of a case in 1966 that left many buyers with a financial tragedy. Now, a number of restrictions have been built in that offer a number of interesting guarantees for the buyer.

  1. The property must be intended for housing and not for commercial purposes.
  2. You do not have to live in it yourself, renting is also possible.
  3. The property must be built in Belgium by one contractor or building promoter.
  4. You as a buyer must make one or more payments before delivery.
  5. You must pay the amount due in installments. That way you are protected and you suffer no damage if the contractor goes bankrupt.
  6. The seller may ask you for an advance of a maximum of five percent of the total cost.
  7. There is a provisional and a definitive delivery. The latter may take place at the earliest one year after the provisional acceptance. In the meantime, you as a buyer may report defects to the contractor.
  8. The contractor is also liable for major (or fundamental) defects in the building for ten years.

Our first home: rented

This new milestone in my life starts on the 9th of September. This is when I and my girlfriend will receive the keys to our first rented apartment. While technically I call it an apartment, it’s more a glorified studio since the total surface area is only 40 m² (yes, you read that right). With a small apartment also comes little rent and expenses. A small overview (excl. groceries):

TypeAmountAlternative
Insurance9.9616.21
Rent595595
Telecom674
Water; Electricity; Gas7090
Total680.96775.21
  • Rent
  • Insurance
  • Telecom
  • Utilities

The amounts you find in the above table are based on information from local suppliers and operators. The Water, Electricity and Gas expense is based on a 50 EUR provision that the landlord asks and a guestimate based on the previous renter’s usage. This last one will vary since we are with two and previous one was alone but I believe I have taken a large enough margin to be save.

I use the two totals as a bracket. The average estimated monthly expenses per person should be 363.04 EUR.

1 year later: our own(ed) place

Once the turnkey apartment is constructed, which we foresee to happen April/May 2021, I and my girlfriend will move in shortly after. This will allow us to have a place of our own and not paying rent to a landlord. While I had preferred to only move on together once this residence was constructed practical complications prevented us from doing so.

The apartment is a passive building that is located near the major European institutions and is thus perfect as a rental property for eurocrats. On top of that, there are various benefits inside the residence such as an intercom, badge system, automated delivery system for packages, etc. Besides the apartment, I will have a personal underground parking space. This of course all comes at a hefty price tag.

For the premium location and idem fit and finish I will pay a total of:

0EUR
Total purchase cost

This includes the parking space and a basic finished apartment with build-in household appliances. It also contains the tax break you get in Brussels for your first and only home. What will be missing is the furniture and the final finish which is surprisingly costly and above all, needed, given how basic they go.

Full of emotions

The 2 decisions I took in such a short time have a profound impact on my life. It definitly makes me feel a lot of different things.

  • Excitement, for I’m going on an adventure with my girlfriend by living together in a 40m² appartment.
  • Fear, for the unknown. Not only about the apartment on plan but also what the future with my girlfriend might bring once we move in.
  • Happiness, since I won’t have to be separate from my girlfriend and we can spend every night together.
  • Doubt, about the possible financial impact. Eventhough it’s relatively clear how much I’m spending, I’m still not sure how the presure of two apartments will impact me.

But I wouldn’t want to trade this turn of events in for anything. My fight towards financial independence will take longer or the challenges are going to be tougher. Looking at the bright side, I will have enough to write about the coming months and years.

As things are changing for me, I wonder how others are fairing. So, what about you my dearest reader?
Did you have any changes happen in your life recently? If so, care to share?

Please leave a comment below and share your thoughts!

I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

Road to home ownership
1. Starting my journey towards my own home
2. Should I buy or rent my first home?
3. The Truth About Room Investments: Off-limits
4. Buying an apartment in Brussels while renting elsewhere
5. The big move and moving around
6. My mortgage: an interesting experience
7. Apartment progress: 5%
8. How one tax deduction reduced my apartment cost by 17K
9. Coronavirus impact on my new apartment
10. Apartment progress: 15%
11. Startling Extra Costs To Get A Better Turnkey Apartment
12. Apartment progress: 30%; finally above ground!
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Ludovic

Congrats with your your purchase!
I recognise the emotions you have listed down when I have bought mine 🙂

If I were in your spot, with an appartement bought “on plan” I would do the following
– Monitor on a regular basis how the works are going; How things are advancing, stagnating, etc.. This can be handy if something goes wrong. The more you know, the earlier you can do something.
– Start to create some relationships with the other buyers; specially with the people that will live there too.
– Investigate how the condomium(? mede-eigendom) will be externalized, organised,…

I’m personally part of the co-ownership council of my appartement. So I can have a look at the problems we have in the building; propose solutions to the other owners, agree/disagree on future investments before the other owners. It requires some time/motivation, but what you get out of it, specially when it’s an investment, is worth it.

Good luck !!

B at Fire The Boss

Congrats on the purchase man! That’s going to be an exciting wait!

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