Investing in rental property is always profitable. The price per square metre of living space in Luxembourg continues to rise and provides investors with an excellent return. Here are a few tips on how to make a successful property investment.

Should you invest in new or old property?

Investing in a new project has several advantages. However, since 1 January 2015, the VAT rate has increased from 15 % to 17 %. It can no longer benefit from the reduced rate of 3 % which was intended for sales in future state of completion (Vefa). In addition, you will have to wait at least 2 years before reselling it, otherwise your purchase will be considered speculative. You will therefore not be able to benefit from a revaluation of the value of the building.

Older housing incurs higher registration and transcription costs than a new property. However, the VAT is lower if the house or flat needs work. The costs will therefore be lower on an old house than on a new building.

In any case, before investing in real estate, it is best to seek professional advice.

Choose an attractive location

The purchase of a house or flat for rent requires some thought. The transaction must be profitable, especially if the owner relies on the rental income to repay part of the property loan.

The choice of location is of the utmost importance when renting a flat. The most attractive cities are those that invest the most in public infrastructure. Luxembourg or Esch-sur-Alzette come to mind. Municipalities close to employment areas and with an efficient public transport network are also very popular: Hesperange, Frisange, Leudelange, Sandweiler, but also Strassen, Bertrange, Capellen, Steinfort, Niederanven or Bettembourg...

Buying a house or a flat?

You should know that 60 or 80 m² flats are the most popular for rent. They are very popular with young professionals who have not yet decided to buy. Ideally, you should choose a flat with a parking space or garage, and close to public transport. The presence of a balcony or terrace is a real asset, as is a large living area and good energy performance.