Secrets of renting accommodation in Luxembourg that you won't find anywhere else
Interview with a real estate agent about the actual rules for renting accommodation in Luxembourg: prices, documents, deposits, commissions, risks and typical mistakes made by tenants.
My name is Irina Bettendorf, and I am a real estate agent. I moved to Luxembourg more than 20 years ago, not through a programme, but thanks to the help of friends.
At that time, I had neither a European surname nor a European passport. All this came later, after many years of immigration and integration into society, through work, study and continuous volunteering for various associations. After the divorce, each of us found our other half, first my husband, and then, 15 years later, me.
My journey to the Grand Duchy was also unusual: we came from Cuba.
In Luxembourg, I:
- worked in many different fields;
- obtained a second degree;
- was a player-coach for the basketball team;
- trained and worked as a basketball referee for three seasons;
- rented a flat with her husband;
- was looking for a flat as a single mother;
- learned all the pitfalls of renting accommodation from personal experience;
- underwent retraining and became a real estate agent;
- For many years, I have been helping a wide variety of people find a roof over their heads in the Grand Duchy, whether through purchase or rental.
If you are just thinking about renting, buying or selling property in Luxembourg, or are already actively searching, be sure to check out my experience. First and foremost, when we arrive in a new country, we all start by looking for rental accommodation.
Don't underestimate social capital
After the wedding, my first husband and I moved to Liberty Island, his homeland. Life there was difficult, and in fact, there was nothing but freedom. When the situation reached its limit, our friends in Luxembourg helped us. They arranged visas and passports. Without them, we would not have come here, of course — everything is very expensive.
There is no point in hiding the fact that we were very lucky. We were simply pulled out of one life and provided with documents and initial accommodation for another. We just had to find a job ourselves, because without a job, you can't get by here.
However, this issue was not easy for us to resolve. Those who move for work know that you need to be either a unique specialist or a top-level expert that Luxembourg needs. That was not the case for us. My first husband and I were both geologists. In the end, I studied law at the Sorbonne and took retraining courses for real estate agents, but that's another story.
Why renting accommodation is not easy: 20 years ago and now
The affordability of housing in Luxembourg, or rather its unaffordability, is not a new problem.
In the past. A little over 20 years ago, when I moved here, there was a war going on in Yugoslavia. There were a lot of refugees from Serbia, Croatia and neighbouring countries. Refugees and people with degrees are completely different categories of people, and landlords treat them differently.
Now. Since then, the situation has only worsened. A lot of new housing has been built. And new housing is always more expensive, people take out loans to buy it, and these loans have to be repaid. So you simply cannot ask your tenant to pay rent that is lower than your monthly mortgage payment. Plus utilities and other expenses.
If we look at the statistics, compared to 2021, in the second quarter of 2022, the number of houses available for rent decreased by 5%, and apartments by 14%. At the same time, rents have increased. This is a natural process, and it will continue.
What is the reason for this?
- Highly skilled professionals have been coming to Luxembourg for the past 10 years. They already have employment contracts and high salaries. And where there are high salaries, there is also expensive rent.
- At the same time, there is a large segment of refugees, single mothers, and workers from other countries with lower incomes. The market must adapt to them, which means that even more housing must be built. But...
- Developers cannot keep up with the growth of the incoming population, and sometimes they are unable to build where there is space available. Government policy dictates that green spaces must remain green. It may take decades before they are converted into residential areas.
What can you rent in the capital with a salary of €2,400?
When moving to Luxembourg, you need to be prepared for the fact that the lion's share of your salary, no matter how high it may be, will go towards rent. And you need to clearly understand that not all housing will actually be affordable with a given income.
For example, with a salary of 2,400 in metropolitan areas, you can only afford an apartment, probably a studio. But not a house. If we are talking about more or less comfortable housing, then with such a salary, the rent ceiling is 1,500 euros.
Returning to the cost, it is worth mentioning that the law clearly states that the annual rental cost cannot exceed 5% of the amount invested in the property. The law will change in 2023, lowering this figure, which will please tenants.
It doesn't matter whether it's a loan or your own savings (who knows?). Simply put, you can fully recoup the cost of renting a property in at least 20 years.
However, the most interesting thing is that houses and flats now cost so much that almost no one sets even 5%. In Luxembourg, they don't set anything higher than 2-3% for new housing because it would be very expensive for the tenant to live there.
How to follow the two main principles of finding accommodation
The country is divided into 12 cantons, each of which has a key city that is worth focusing on. And if you look at the map, the price range is enormous. For example, there is Luxembourg and the northern canton of Vianden.
The same studio will cost, say, £1,400 or more in the capital. But in Vianden, you can find one for £1,000. And the distance between these cities is only about 60 kilometres.
Transport accessibility and convenience
The first rule of finding a roof over your head, especially if you don't have a car. Of course, you should look for accommodation closer to your workplace.
If you already work outside the capital or a large city, it is better to look for a place to live near your workplace. If you work in the capital, you can look at places that have bus or train connections.
Rent-to-salary ratio
This is also very important, as there is an unspoken rule that is not written into law. No landlord will rent you accommodation if your family's income does not exceed three times the cost of rent plus utilities.
There is a studio flat for €1,500 + €200 utilities. How much does the family earn? If it's around €5,000, then such an application might be accepted. Because €1,700 x 3 equals €5,100. If the family earns €3,000, then no one will rent anything to them. No one will refer to the law or a document, because they do not exist. It is simply the accepted practice.
Why am I talking about a budget of around €2,400? When there is a flow of refugees, as there was in the late 1990s and now, the average salary of such people is around €2,400, sometimes slightly more. Europeans working here in European institutions (Institutions européens) earn much more and can afford to rent from €3,000 per month.
But don't despair, you need to head north or north-east. You could also consider Esch-sur-Alzette.
Where to look for accommodation to rent
There are actually quite a few options for finding accommodation.
Specialised websites
Of course, they exist:
- www.habiter.lu and so on.
These are official portals that list flats from agencies, and they do not engage in selecting potential clients. How does the scheme typically operate?
The agent publishes advertisements on portals, users receive them in the form of newsletters or actively browse the virtual pages of portals themselves, dreaming of finding a roof over their heads. The agent begins to receive calls from unknown numbers from people who want to sign up for a viewing, and so on.
What's the downside? It's not the fastest process. As an agent, you don't know the person looking for a flat. You need to meet them, understand their psychological and financial situation, where they work, how much they earn. You can't discuss such things over the phone; some people don't even give their surname.
Only after this work has been done does it make sense to go with the tenant to view the flat.
Social networks
Facebook, LinkedIn, Internations, Instagram, and internations.org allow you to immediately see who someone is, find out where they work, and estimate their salary. This can simplify the interaction between tenant and landlord. If you don't want to search yourself, you can contact an agency.
Agents
We have our own lists of flats, which include the owners' preferences, location and other factors that help us sort requests more effectively. This saves time and allows us to work more efficiently.
What documents will the tenant need?
If we are talking about someone who already works here and has a contract, then it's simple:
- Employment contract.
- Passport or residence permit, any legal document granting the right of residence.
- The last three payslips. It is very important to understand what kind of person he is, what he does for a living, what company he works for, and whether he has a steady income. This is extremely important for landlords.
- If you have children, it would be helpful to provide a certificate of family composition. Or at least mention in writing that you have children and their ages.
If there is no contract, you need to study the context. In general, each situation must be considered individually.
What expenses to prepare for
The most important thing when renting a flat is money. When someone wants to rent accommodation, they must be prepared for significant expenses on the first day.
Where do they come from:
- The tenant always pays for the first month's accommodation in advance.
- He most often pays a deposit. Usually, this is an amount equal to 2-3 months' rent. Sometimes it is not required, but this is rare.
- You have to pay agency fees if you use the services of an agent. Unfortunately, these are paid by the person in need, i.e. the tenant. Agency fees amount to one month's rent plus 17%. This means that for a studio costing €1,000, you will have to pay €1,170 to the agent. For a flat or house costing €3,000, the fee will be €3,510.
The agent acts on behalf of the flat owners, knowing their requirements, and their role is to find a tenant that suits the owner. Not the other way around!
However, it is not the owner who pays the agent's commission, but the tenant. This is a paradox, but it has become established over the years, as the supply of long-term rental accommodation (one year or more) is significantly lower than actual demand.
In general, I believe that a fixed rate or an equal division of agency fees between the tenant and the landlord would be a fairer rule.
Judge for yourself, even using the example of one unfortunate studio for €1,000, we get a round sum of expenses for the tenant:
- 1,000 euros for the first month;
- 2000-3000 thousand euro deposit;
- 1170 euros in agency fees.
That's already around 4-5 thousand. And then there's insurance! By the way, it's worth taking out insurance in advance. Often, when signing a contract, they ask to see the agreement. In general, unilateral agency fees and inflated deposits make life very difficult for everyone, in my opinion.
And most importantly, the deposit does not cover the rental costs! This is stated in every contract.
That is, this money can be used for repairs after eviction, for depreciation, so to speak. And to pay off utility bills. And you have to pay for the flat regularly. Even if it rains in the flat, if a plane flies in.
What to consider when viewing a flat
One of the most important stages is the viewing. This is when the contract is drawn up and the acceptance certificate is signed — these are the most important documents that serve as a guarantee for both parties. All this work falls on the shoulders of the agent, if there is one.
Essentially, this involves a complete inventory of the flat, regardless of whether we are talking about moving in or moving out: you need to take meter readings and document everything that is in the flat. When you move out, you must return the flat in the same condition as you received it. Repaint where necessary. Fill in any holes you drilled to hang pictures.
It is worth remembering:
- Most contracts imply a prohibition on subletting, even if this is not explicitly stated.
- If, when you move in, the landlord sees you for the first time and says, "Live here, no contract needed," then there is probably something fishy going on. It is likely that the property does not belong to this person, or it is up for sale, or they will ask you to pay cash, which gives the tenant no guarantees or rights. Agents always check these things.
- Contracts are often signed without being read, but every line should be carefully inspected.
- If there is an opportunity to change something in your favour, you should do so.
- When a person arrives in another country, they experience stress and sometimes panic. They are happy with any accommodation. But this can lead to big problems later on. Therefore, it is better not to rush into a decision.
- If there is a language barrier, it is definitely worth seeking professional help. In other cases, it can also be useful. For example, in a dialogue when viewing an apartment, the participation of a third party helps to avoid awkward moments. The landlord does not need to ask how much the candidate earns or how solvent they are. The agent will do all this. They will also find the words to soften the situation if the landlord flatly refuses to see a potential tenant.
- It is advisable to accompany the acceptance certificate (inventory) with photographs to avoid ambiguous situations.
What difficulties do mothers with children face?
This is a separate category that I try to help. I feel it is my duty because I understand what they have been through. When I divorced my first husband, they didn't want to let me live with my small child, even though we parted amicably, without a court case or division of property.
The reasons varied greatly: "Oh, we have carpets, we're afraid for them," "Oh, we don't have much space, we're afraid your child won't be comfortable living and growing up here," "Oh, we don't have a garden, he won't have anywhere to play." Lots of polite reasons that mean nothing.
One day, I accidentally found out what the truth really sounds like. It's simple: "We're afraid that if you lose your job, you won't be able to pay the rent and support your child, and we won't be able to evict you."
I solved this problem by asking to view the flat on my own. This allowed me to get into the flat, assess everything for myself, and then say on the spot that I had a child, that I was divorced, and that everything was fine with us, both at work and in our relationship. And it worked!
But for mothers who have been arriving in large numbers in recent months, I always advise them to first familiarise themselves with the regulations of the Grand Duchy. They may be entitled to social housing. And my second piece of advice is to look for accommodation that has already been paid for. It may be an old building, but the rent there is likely to be cheaper!
How to avoid falling into the hands of fraudsters when renting accommodation
There are dishonest citizens everywhere, in every sphere, even in a progressive country like Luxembourg.
What should definitely raise suspicion:
Reluctance to sign a contract
Suspiciously cheap accommodation
These are just a few of the situations I discuss during consultations. I would summarise the most important rule for finding a flat as follows: if you have doubts, fears or uncertainties about anything, consult the professionals. Not a single client has ever left me disappointed.