Same money, two paths. One buys a flat with a mortgage and rents it out; the other invests the same money in ETFs, including whatever the flat would cost each month. Who ends up with more?
The flat you’d buy
€200,000
€900
Per month, before taxes. Check listings for similar flats in the area.
30% · €60,000
For a home you don’t live in, banks often lend less: count on 30% or more.
20 years
Mortgage, costs and assumptions (tap to change)
3.5%
25 years
7%
Taxes, notary, agency, as % of the price. Higher for a second home than for your own home.
1%
Maintenance, insurance, property tax, building costs, as % of the value.
20%
Depends on the country and the type of contract.
1
2%
2% = in line with inflation. Rent grows 2% a year; investing in ETFs returns 7% a year on average.
Gross rental yield 5.4% · average
After 20 years, what each path owns, in today’s money:
Buy and rent out flat value − mortgage left + ETFs from the extra rent€174,217
Invest in ETFs the same money, in ETFs€236,885
Investing in ETFs comes out ahead by about €62,668. In this period the flat never catches up.
Buy and rent outInvest in ETFs
On day oneYou put in €74,000 (down payment and purchase costs). The ETF path invests the same €74,000.
Each month the flatBrings in €660 of rent after tax and empty months, and costs €701 of mortgage and €167 of owner costs.
€208 a month from your pocketThe rent doesn’t cover the costs. The ETF path invests the same €208 each month.
In today’s money (2% inflation). Before the tax when you sell the flat or the ETFs, and without selling costs. Rent tax is applied to the rent as a simple %. Educational estimate, not advice.
When buying to rent out wins, and when investing in ETFs wins
Buying to rent out usually wins if…
The gross rent is 6% or more of the price a year.
The mortgage rate is low and the rent covers the payments.
You hold it for 10 years or more and you don’t mind managing it.
Investing in ETFs usually wins if…
The gross rent is under 4% of the price.
Mortgage rates are high, or the purchase costs are heavy.
You want something simple that you can sell in a day.
It’s not only about money
Debt works both ways: a mortgage multiplies gains when prices rise, and losses when they fall.
Being a landlord is a job: tenants, repairs, late payments, empty months.
One basket: a flat is one asset in one city; ETFs spread your money over thousands of companies.
Something you can touch: for many people a flat feels safer than a fund, and that matters too.
Taxes to check in your country
The taxes when you buy, the tax on rent and the tax when you sell depend on your country, and sometimes on your region. Ask a tax adviser before buying.
Taxes change, and they vary. Tax rules change often, sometimes every year, and depend on your country, your region and your own situation. What you read here is a general summary, checked in October 2026: always check the current rules with an accountant or tax adviser before deciding.
Questions
Why does the ETF path invest more when the rent doesn’t cover the costs?
To compare like for like: if the flat costs you money each month, that money comes out of your pocket. The ETF path puts exactly the same amount into ETFs, so both paths use the same money.
Isn’t the mortgage an advantage?
It can be: you control a flat worth more than your money. But you pay interest on it, and if prices fall you lose on the whole value. Try a different mortgage rate and house growth under “Mortgage, costs and assumptions”.
What gross yield is “good”?
A common rule of thumb: 6% or more gross a year is good, under 4% is low. After taxes, costs and empty months, what’s left is usually much less.
Next: your first plan for investing in ETFs
Answer 3 questions and get a one-page plan: how much to keep in the bank, how much to invest in ETFs each month and how to set it up.
Not financial or tax advice. Educational estimates with constant average returns. Investing in ETFs can lose money; house prices and rents can fall too. Check the rules or talk to a qualified adviser.
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