Budapest District VIII

hi there bpartner the appartment that im going buying is a new build just across from the old mans pub on akacfa utca. Right now it is only a car park and definitely haven't started construction just yet.

Im due in Budapest on the 22nd to sign on the dotted line for this property and will be researching about what way to go about renting the apartment when its finished.

you have opened my eyes about the dangers and pitfalls of leasing an apartment through a management company but thats the only road to go down, are you working for a management company? and what role do you play in dealing with clients? have you got a website that i can look at ? and what is the way forward for dealing with this rampant unprofessionalism in the market in Budapest.

Surely if theres a steady stream of investors in Hungary that this unprofessionalism would be overturned as the workers livelyhoods are at stake. I mean if an investor smells a rat and the word gets out that means that management company is going to suffer financially. can these people afford to act like this.

My criteria for payment suits me right now im paying 20% now and 80% when the new build is finished which gives me plenty of time to get funds together.

Im under the impression that if you buy an appartment that its not really finished unless you have a car space also. am i naive by saying this?

Im buying this new build from a crowd called hexacon homes, and i think that the developers are (bercon).do you know this company? They also have a new build in district 9 on the danube.

Ive got my solicitor and waiting for the buyer/seller contract to read over it carefully so far theres no snags.

At this early stage of the development what should i be looking at at the moment more carefully maybe i've left out a few things but maybe you could fill in the blank spaces
 
thanks bpartner,
i know 2k might be a bit high for an appartment even in district 7 but i did really like the area it seemed like a good business area and a lively social spot.

And no there isnt any leisure facilities there i thought though that since there was only 46 appartments for sale that it wouldnt be overcrowded with residents.

The apartment i bought was from Hexacon homes with there agent from Mason estates here in Ireland which are a really reputable company and i doubt if this company could risk financial ruin by recommending such dodgy dealings. Hexacon Homes themselves are run by 2 Irish guys and 1 Hungarian and seemingly from what i was told by masons is that this is there first venture into building apartments from scratch.Before this they had been renovating old apartments. In you're opinion how much per sq metre should i have been paying.

But as you say these apartments arent aimed at Hungarian purchasers as the website is in English. I was also told that there aimed at the Irish market when i first approached the person in relation to buying one of these properties. Im getting storage space as an extra with this apartment of 4 square metres and i was told these apartments would be finished to top standard so if theres anymore critisisms or otherwise i would appreciate them bpartner
 
thanks bpartner all i know from what im told is that theres a developed courtyard in the centre of the apartment block. The block is in a u shape and in the apartment that im buying there is scope for a lot of light coming in as there is 2 balconies . 1 in the front on the street and 1 in the back facing the courtyard as for leisure facilities, if its a gym youre talking about well no im afraid not it isnt a facility right here.

But i did buy a car space as i thought it might influence someone to rent the apartment and as the building had only 46 apartments i said to myself that people would prefer to live in a small apartment block rather than living in a massive apartment blocks with maybe 80 or maybe 130 apartments (to me big apartment blocks with lots of people are a turn off) smaller buildings with more character are what im looking for and as im sure a lot of people are also ( what do you think?)

Yes sure there will be competition in this area ive observed in that website that you listed how the residential market has a lot of empty apartments due to oversupply at the moment but surely with the €uro about to take off in the next 4 years surely that will be reversed

To me it seems to be early days in the property market in Budapest( i could be wrong) maybe the slump has started to set in but i can only speculate as you can yourself but if you have an opinion let me know

And right now it seems good to invest with the forint at 254 = €1 .

because i was quoted the price of my apartment in HUFS at the rate of 250 and it means less money for me by buying when the HUF is weaker
 
thanks for you're opinions bpartner they are much appreciated im learning a lot in this forum and the more info i have the better.

So i have at least 3 of the 4 criteria you state on youre last post.(the car space furnishing and storage).By the way the storage came as part of the apartment not as an extra. The car space was 14500 and the 75sq metre apartment with 2 balconies front and back was €143000.

For me this is a big investment,as ive been working for a long time to even raise equity for this venture so as you say yourself you have to be careful. But the list of apartments that you quoted per square metre are seemingly similiar prices to what im buying myself.

im just hoping that im going to be meeting down to earth business people not conmen.

As im buying as an individual im thinking that i should need an accountant to look after the tax for me (what do you think) should i open a bank account for the management company to access funds when they need to ( a kind of buffer account) pay for costs like maintenance and supervision on an appartment block and is it easy get receipts from these people as i have been told its bloody murder trying to get them for tax relief in this country.
 
No offence Bpartner but AAM users should remember to exercise appropriate caution when dealing with online contacts.
 
Hey Bpartner, AAM user just means an 'askaboutmoney.com user' i.e. anyone using this board.

Seanieboy, that price does seem slightly high. The location is good but not amazing and the designs for the place don't look particularly good either. The absence of leisure facilities is significant as it means that your apartment will not really be in the luxury category. If it were my money I would have a look at somewhere like Gozsdu udvar, which is around the same price, has leisure facilities and is a refurbished older building of high stature, which is likely to stand the test of time as opposed to a characterless new one. This is just my opinion though.

Best of luck,
Budapest
 
Hi Bpartner,

I agree with you about management charges. They will be higher in Gozsdu udvar, but I think that there are arguments on both sides and in any case, the potential rent should be slightly higher for Gozsdu udvar. Also, in ten years time, my guess would be that an apt in Gozsdu udvar should have appreciated at a better rate than Akacfa 26 as the design is infinitely better, the location is slightly better, leisure and wellness facilities are available and it's a already a well renowned building in Budapest. All round, it will be a much more desirable place to live in.

In relation to the demand for second hand apartments, I think we differ slightly on this issue. As more of the classic buildings are refurbished in the central districts, my guess is that they will be more desirable places to live in the next five to ten years than the new builds, many of which in my area have already started to look shabby, even though they're only a year or two old. Lack of parking can be an issue but many expats and professionals don't have cars so it won't be an issue for everybody. My opinion is also that in ten years time, the probable resale value of a well located renovated classic apartment in a renovated building will more than likely be better than a ten year old modern apartment on the same street. Desirability doesn't really matter to an investor if the figures add up, but some sort of emotional connection is vital for most buyers who want to live in their property.

Budapest
 
I agree with you about renovated buildings in District V being a good bet for the long term. I would add Andrassy ut into this equation too. Almost every available plot has been built on in this area also and in my mind, it will continue to be one of, if not the most prestigious street in the city.

I also think that renovation of the older buildings in the city centre will happen at a higher pace if apartment owners agree to sell their attic spaces. I know of many developers who would love the chance to buy loft space in older buildings in V and VI and renovate the building in return, but unfortunately some owners don't want this disruption and hold up the agreement. Hopefully this attitude will change as time goes on and the benefits of living in a renovated city become more apparent.

Talk to you in ten years time!
 
I am another potential investor in the Budapest market and find your debate very informative and helpful. what is your opinion (Budapest and BPartner) on the advantage of buying a 1 bedroom in District V versus something bigger in VI or VII. Wouldnt this hit the Couple market and rent can be nearly as good ? Is there nowhere in District V that has 1 bedroom, parking and Leisure facilities. You both seem to differ on the advantage of having parking. In the longterm my feeling is the capital appreciation would be higher on an apartment with parking, would I be correct? I know you will always find tenents who dont need the parking space but that allows you to rent it out aswell.
 
Hi emnc,

I also think that parking is very much a benefit. The only thing I don't recommend is paying well over the odds for a standard new build apartment just to get a parking space. You can always for example buy a second hand property and buy a parking space in a new building close by if necessary.

As regards buying a 1 bed in V or 2 bed in VI or VII, there are many variables to be considered. Some parts of VI are better than some parts of V and a lot depends on the apartment layout, aspect, condition of building, etc.. If you're talking about leisure facilities and parking, then I take it that you mean a new build. There's nothing worth talking about in V but have a look at somewhere like Gozsdu udvar on Kiraly utca in VI.

Do you have a budget in mind at the minute?

Budapest
 
Yes Buda, budget max 100 but may be willing to go higher if impressed!! Capital app is key. and obviously I dont want it vacent.
regarding the 1 bed notion, in Ireland one can get more then half the rent for a one bed that you would get for a two bed. The clients are normally a working Couple, so they are good paying tenants. What is the tenant profile in District V and V1, ie mainly student etc...?
Who are the estate agents for Gozsdu udvar on Kiraly utca in VI? Is this the same as Madach Gardens?
 
For just over 100k, you'll only get a studio or small one bed apartment in a new luxury development. For this type of apartment, your tenants will probably be professionals from other countries. If you go second hand, you could buy a large one or two bed in V or VI for this price. Your tenants for such a property would be profesionals or expat students. In my experience, student tenants isn't a bad thing over here. They tend to take care of the place and may want to hold onto it for several years. e.g. many Norwegian and Irish students go to vet college over here for five to six years.
 
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You have been asked once before to desist from posting comments pumping Budapest for property investment as opposed to discussing issues relevant to the topic in hand. If you persist you will be banned. You have been warned (again).
 
hi bpartner,
I think you're pretty informative for what im looking for and thank you for you're posts over the past few days. As im coming over to Budapest its best that i get as much info as possible on the place and its market.

As im buying in Akacfa utca and i do think it has great potential along with car space what should i have paid for this apartment per square metre? remember its going to be a 2 bed apartment 75 sq metres with 2 balconies front and back.

I know Budapest and yourself were determining which was better 1 bed apartments in district v or 2 beds in district v1 all this is very relevent to hear for me and he told me i should be looking at that other development on kiraly utca gozsdu udvar. It seems very expensive for me and out of my price range and i do know that budapest prefers old classical buildings.

I know in one way he is right in the sense that there would be more character in these apartments but elevating costs on old buildings could be a deciding factor for potential investors.

Investors want to buy in my opinion an apartment that have no problems with dampness, heating,dry lining with wall, etc.they want to start out with a highly fitted out apartment that is impressive to the eye and modern in appearance on the inside. I know the quality is in these old builds but they do have there problems and if the potential investor is thinking 10 to 15 years on a new build, well then the problems could be a minimum and less to think about over the period.

This development quite rightly will appreciate more rapidly than mine on akacfa utca as it costs more initially and maybe slightly better location but i think that mine is fairly well positioned also what do you think?

Budapest also said that the design on akacfa utca wasnt great well i thought that it looked pretty well on the ball, and its a small enough development. I know a lot of people over here in Ireland would be of the opinion that a block of flats with a lot of people in them would be less desirable than a smaller development of say 46 apartments over 8 floors mainly because of the noise factor and other issues. so id love to hear you're opinion of these issues
 
Bpartner said:
Dear ClubMan,


I expect that I was warned because I am Hungarian. If so, it was not kind of you.
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I think I can safely say that the warning has absolutely nothing to do with your nationality!

One of the many good things I find about AAM is that it's not proliferated with ads and people/companies trying to sell services/property etc. The role which the moderators/administrators play is also crucial to make sure that there is balance and that the forum is as helpful as possible to people who need their questions answered.

bpartner, you shouldn't take any warnings personal, but you should of course heed them!

I think anybody who has an interest in Hungary/Budapest would welcome contributions from a Hungarian like yourself.

Perhaps if you don't fully understand the posting rules it might be worthwhile to send a Private message to the moderator for clarification.

Donking
 
thanks bpartner,
I live in a 3 bed semidetached house in a town and i have a garden also plenty of space all round. Now i know that id hate to own an apartment in the midlands in Ireland as they dont seem to appreciate that much as noone really holds much interest in them down the country. On the other hand if i had the money i would buy in Dublin as the appreciation in that city is like no other that i know and far more professionals ie (celtic tiger cubs) choose to buy bachelor pads.

I would say from speaking to people that a 2 bedroom apartment would be the preferred option as it gives the option of choice for guests living room etc.

Id imagine a really small apartment in the middle of Budapest would be pretty claustrophobic. id also imagine that if you had guests in a 1 bedroom apartment that you wouldnt have enough room to swing a cat. so if it were me living in Budapest id have to chose a 2 bedroom apartment a few stories up like mine on the 4th floor partially got to do with the noise element. By the way should a person get air condition in there apartment or should it come as a standard package. What way do the people in Hungary think on this one?
 
Bpartner said:
Dear Donking,

But I was warned because information about Budapest is given by me who is Hungarian.
Click to expand...

I don't think that there is a ban on Hungarians providing information on Budapest!! Information relating to the topic of discusion (Budapest District VIII) and sales pitches are somewhat different however.

I have to say that this thread has got very large and seems to have meandered somewhat from the original topic. I've purposely avoided reading all the posts on this thread because there are so many!

I think it would be better and more helpful if separate threads were opened to cover other specific topics on Budapest
 
well bpartner the aspect of the apartment would be that the sun comes up in the east which is the front of the apartment,where there is a balcony therefore sunlight hitting the 2 bedrooms in the morning. and then in the evening the back of the apartment gets the light shining into the living room from the back balcony.

The thing is since akacfa utca is a small street and theres buildings at the front and back the sun mightened shine through as much as it should and the case would be the same at the back but it would absolutely have an awful lot more light than other apartments in the block.

In the case of getting the buyer/seller contract how soon should i be able to get my hands on this so i can read it as im due to sign for the apartment later on in the month. so far i havent got it and i would like to read it before i sign any dotted line.

When i go over to sign what is the procedure for the transaction and as i saw in another post regarding Hungary that i should get my passport notarised as if i went to the Hungarian embassy in Dublin it would be a lot dearer. What happens if i havent got the buyer/seller contract before i go over there should i leave the signing for another time and if so whats the best road forward from there. Im not going to sign for something if i dont know whats in the contract would you agree?

When this money is left in the escrow account with the solicitor when are the solicitors fees paid (hes already sent me on a retainer letter of which im meant to sign) then at what stage of the construction is the stamp duty paid and the first 20% instalment on the apartment paid

Im also reading about the state of the Hungarian forint these days that its gone very much weaker due to God knows what reasons. At this moment in time it does suit me to transfer money to an escrow account to my solicitors office as i will be gaining on the purchase. In youre opinion what is to become of the euro and the forint currency wyse?

Is it a new trend that its becoming weaker than the euro?
 
Hi Seanieboy,

You're right in saying that I do tend to prefer older buildings but if I saw a new block of apartments that was priced well and was of high quality, then I could be easily swayed. I can definitely see the advantages. However, quality, reasonably-priced new buildings are few and far between in Budapest as far as I can see. To get something which is of a high standard, you have to pay very close to Irish prices.

I also don't want to be too negative about your potential purchase. I'm sure that you've done a lot of research and know what you're doing. I just want to encourage Irish investors to be careful and because of this, I may lean on the side of caution. Prices for new developments over here can be plucked from the air and can have little correlation with the rest of the market. This has been confirmed by numerous people in the property industry over here, who I've spoken to off the record.


I agree that many investors will want a straightforward investment, but e.g. dampness isn't really an issue in most older buildings. Both in design and in build quality, in my opinion, many are superior to the new buildings, which are often thrown up without much though for long term quality. Also, at the minute, it's in the interests of developers and estate agents to sell the new stock as it earns them more cash, so be very cautious about what you believe from anyone with a vested interest.

Also bear in mind what your development will look like in ten years time, standing in the same street as a renovated neo-classical apartment building with fourteen foot ceilings, cast iron and granite staircases, ornate ceiling covings, parquet flooring, sculptured facades, etc. What is popular at the minute is not always a good thing in the long term.

You really don't have to be in a rush either as capital gains is steady at the minute and probably won't shoot up anytime soon.

If you're sure of your investment and have checked out everything, then the best of luck to you!

Budapest
 
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