Property investment glossary

The key concepts in plain language — the same terms we use in our analyses and tools.

Debt-free price

Sale price + the share of the housing company loan attached to the flat. The only price on which properties should be compared.

Maintenance charge

A monthly payment covering the housing company's running costs (heating, upkeep, administration). Deductible from rental income.

Capital charge

A monthly payment that amortises the housing company's loan. Deductible only if the company expenses it in its accounts (otherwise it burdens cash flow but does not reduce tax).

Special charge

A one-off or fixed-term additional payment covering a single major repair. Often a sign of an underfunded housing company.

Share of housing company loan

The share of the housing company's debts attached to the flat. Paid off through the capital charge or as a lump sum.

Gross rental yield

(Rent × 12) ÷ debt-free price. A quick screening figure that ignores costs. Read more →

Net rental yield

Yield after maintenance costs and vacancy, relative to the debt-free price. More realistic than gross yield.

Cash flow

Rental income less all outgoings, including loan servicing. Tells you whether the property leaves money in hand each month.

DSCR (debt service coverage ratio)

Net income ÷ loan servicing costs. Above 1 means rental income covers the loan. Banks watch this figure.

Return on equity (ROE)

Annual return relative to the money you actually put in (deposit + transfer tax + transaction costs), not to the full price.

Repair backlog

The repair need in euros that has accrued from wear and has not yet been carried out. It grows when renovations are postponed.

Long-term plan (PTS)

A long-term maintenance plan: a table of upcoming repairs, their timing and estimated cost. Read more →

Condition class

An assessment of a building component's condition, typically 5 (new) … 1 (poor / needs major renovation).

Hidden debt

The total burden that doesn't show in the debt-free price: your share of upcoming repairs and the underfunding gap. Read more →

Transfer tax

A tax paid by the buyer on the transaction. 1.5 % for housing company shares and 3 % for real property, calculated on the debt-free price. Counts towards your equity requirement.

Capital gain

The profit on sale, taxed as capital income. The acquisition cost (purchase + transfer tax + transaction costs + improvements) reduces the taxable gain.

Net assets

Assets minus liabilities. Affects, among other things, how a partnership's or company's income is split between capital and earned income for tax.

Vacancy

The time a flat stands empty. A realistic estimate (e.g. 3–5 %) belongs in every calculation.

Leasehold plot and redemption clause

The housing company leases the plot. Check the ground rent, the terms for increasing it and whether the company has the right to buy the plot. A rising rent with no right to redeem is a risk.