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Comparing Investments from 2015 to 2023 – €100,000 in Global Stocks vs. Netherlands Real Estate
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Summary of the Analysis
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This file provides a comprehensive analysis of two investment scenarios:
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1Investing €100,000 in a Dutch Rental Property (Real Estate) - We assumed an average dutch income in 2015 (and a limit in the max morgage he/she could optain), fixed interest rate for 30 years and all associated costs.
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2Investing €100,000 in a Global Stocks ETF (ISAC) - Broad all country world ETF in 100% stocks, TER 0,2% and no other investments in the period of time considered.
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The goal is to determine which investment provides higher value and returns over the period from 2015 to December 2023.
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This analysis considers all factors that affects or could affect the returns of each investment: such as property appreciation, rental income, taxes, stock market growth, and associated costs.
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Structure of the File
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Introduction: Overview of the methodology and key assumptions for the analysis.
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1Stocks vs House: generale details and conslusion sheet
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2Stocks Analysis: Year-by-year breakdown of ETF investment's performance.
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Real Estate Analysis: Classification of all costs, Year-by-year breakdown of rental property's performance.
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4House investment Cash Flow: overview year-by-year of the P/L and other details.
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Final Results Summary
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The following table summarizes the investment outcomes as of December 2023:
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Investment Type
Initial Investment (€)
Final Gross Value (€)Taxes Paid (€)Net Gain (€)% GainYearly Gain (%)
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Real Estate€100.000€644.947,73€16.926,68222.965,56122,97%13,66%
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Global Stocks (ETF)€100.000€223.667,87€7.202,38216.465,49116,47%12,94%
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Delta6,50%
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Key Insights:
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- Both investments have delivered exceptional returns over the analysis period.
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- Real Estate slightly outperformed stocks in terms of total gains (€222,965.56 vs. €216,465.49).
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- Real estate has benefitted from leveraged growth via a mortgage, while stocks provided passive and liquid returns.
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- Taxes are notably higher for real estate, but the overall gains more than compensate for this.
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- The volatilityof the two investements are very different: House 4,66% and stocks 13,40% (The variance in the price of houses is less volatile compared to the prices of the stock index)
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Conclusion:
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While both investments offer lucrative opportunities, real estate has a slight advantage due to leveraged growth and consistent rental income. However, this advantage comes at a cost: higher taxes, significant management effort, and greater time involvement for the investor. The return difference of 6.5% in favor of real estate raises an important question: is this incremental return worth the additional hassle?

Real estate investments often require extensive effort, including property management, navigating a lengthy purchasing process, and ongoing maintenance. By comparison, ETF investments involve lower barriers to entry, reduced time commitments, and greater flexibility. These factors make ETFs a more accessible and streamlined option for many investors.

It is worth noting that the real estate analysis assumes average property returns in the Netherlands, with an interest rate based on January 2015 figures.
Would the results differ with a better purchase deal or a more favorable interest rate?
Undoubtedly, yes. Real estate's reputation as a great investment historically stems from such scenarios, but they are highly dependent on timing, market conditions, and individual circumstances.

In conclusion, while real estate investments may offer higher returns under certain conditions, they require a higher level of commitment and risk tolerance. Potential investors must weigh these factors against their personal goals and resources before making a decision. For further details on the costs and effort associated with real estate investments, please refer to Sheet 3: House Return Detail.
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However, the choice depends on personal preferences regarding liquidity, risk tolerance, and management efforts.
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1. Risk Management
Investment risk is a key consideration when deciding between real estate and ETFs. Real estate investments carry unique risks such as market downturns, property devaluation, tenant defaults, and periods of vacancy where rental income ceases. Additionally, unforeseen costs like major repairs or maintenance can strain financial returns. On the other hand, ETFs are subject to market volatility and economic cycles. However, they are diversified across numerous assets within a fund, spreading the risk and reducing the impact of any single asset's underperformance. Investors must assess their risk tolerance to determine which asset class aligns with their financial goals and resilience to market uncertainties.
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2. Liquidity
Liquidity, or the ease of converting an asset into cash without significant loss of value, varies greatly between real estate and ETFs. Real estate is inherently illiquid; selling a property involves a lengthy process including valuation, marketing, and closing, often taking months. In contrast, ETFs can be bought and sold on stock exchanges in real time, offering high liquidity and immediate access to funds. For investors needing flexibility or who anticipate needing quick access to cash, ETFs present a clear advantage over real estate.
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3. Diversification
Diversification is a critical strategy for minimizing risk and maximizing returns. ETFs naturally offer built-in diversification, as they invest in a basket of assets across various industries, sectors, or geographic regions. This spreads risk and minimizes the impact of any single asset's poor performance. Real estate, on the other hand, is a concentrated investment—purchasing a property ties your returns to a single asset in a specific location. While diversification in real estate is possible by owning multiple properties in different regions, it requires substantial capital, increasing the barrier to achieving the same level of diversification as ETFs.
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4. Market Cycles
Understanding market cycles is crucial when evaluating the potential returns of real estate versus ETFs. Real estate markets are influenced by factors such as interest rates, local economic conditions, and supply-demand dynamics, which can lead to significant price swings over time. Timing a property purchase or sale to coincide with favorable market conditions is challenging and can heavily influence investment outcomes. Conversely, ETFs are affected by broader economic cycles and global market trends. While ETFs can also experience volatility, their diversified nature often cushions the impact of any single market downturn. Investors should consider how their investment horizon aligns with market cycles and whether they are prepared for the potential impact on their chosen asset.
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Appendix
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Suorces used for the analysis performed
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