Hungarian rental agent
- Thread starter mikey12
- Start date
The rent boy area?
Returns are around 6-7% for good quality investments, but you really have to be very careful about where you invest and what type of property you purchase. Within the same district and often on the same street, there can be huge variations. There is very much an oversupply problem at the minute of low quality classic apartments, which nobody wants to buy/rent, but an undersupply and high demand for good quality properties at realistic prices.
If you're considering a new apartment, I'd recommend you research high-end developments such as Gozsdu Udvar or one of the more easily rentable developments in District XIII. Apartments in recently completed developments close to Gozsdu Udvar have also been trickling onto the market, but you should be aware too that after the competion of GU, there will be good availability of rental apartments in this part of VI/VII, so you will need to be realistic about your rental prospects and furnish well. In this area, it might be possible to find a nearly new apartment here for a more reasonable price. Prices are high for almost all new developments in the city. Gozsdu Udvar is one of the most prestigious, but at this stage, parking alone can cost €20,000-€24,000.
In new developments in the Angyalföld region of District XIII, the price per square metre for new builds is likely to be around €1,500. Rental returns should be good if you furnish well as it's a popular area for tenants, but IMO, there is probably not good long-term capital appreciation potential in this area. Tired of living on dirty streets in run-down parts of the city centre, some locals currently consider new buildings in this part of the city to be quite trendy to live in. However, this part of District XIII used to be one of the dodgiest areas of the city and the word 'Angyalföld' (Angel land) still has ironic connotations and is neither a particularly pleasant nor well-located part of the city. Most wealthier young Hungarians I know prefer to live in small apartments in prestigious parts of the downtown area (particularly the better parts of Districts I, V, VI). Younger (no children) expats I know personally only want to rent/buy in the downtown area.
I prefer to invest in renovated buildings in more prestigious areas, but it is almost impossible to find good apartments at reasonable prices in the best parts of the city. It typically takes a few months of searching. I'm always on the lookout, but rarely come across properties that I'd be happy to invest in.
If you choose to invest in classic buildings, you will find that the price/sqm will be a lot more realistic - at €1,200-€1,500 for renovated apartments in totally renovated buildings in premier locations. In my opinion, the capital appreciation potential for these properties should be higher. If you choose correctly and spend a bit extra on furnishing, you should be able to find foreign student/young professional tenants with little difficulty and achieve rental returns of 6-7%. Make sure to stay away from overpriced properties, buildings in poor condition, secondary locations, dark or noisy apartments, apartments with strange layouts, properties with a poor location within a building and overly busy streets. You'll find that this constitues 95-100% of properties currently on the market. For the most part, I prefer to stick to the quieter parts of District V, preferably not too close to Szent István Körút, where overpricing is more common or in District VI, particularly certain streets between Andrássy and Király, but close to the opera house. In my experience, renting high-quality classic apartments in this area at a reasonable price to expat students and young professionals has not been particularly difficult.
Budapest is a complicated market, so take your time and research extensively before committing to anything. Prices are unlikely to shoot up any time in the near future, so time is on your side.
If you're considering a new apartment, I'd recommend you research high-end developments such as Gozsdu Udvar or one of the more easily rentable developments in District XIII. Apartments in recently completed developments close to Gozsdu Udvar have also been trickling onto the market, but you should be aware too that after the competion of GU, there will be good availability of rental apartments in this part of VI/VII, so you will need to be realistic about your rental prospects and furnish well. In this area, it might be possible to find a nearly new apartment here for a more reasonable price. Prices are high for almost all new developments in the city. Gozsdu Udvar is one of the most prestigious, but at this stage, parking alone can cost €20,000-€24,000.
In new developments in the Angyalföld region of District XIII, the price per square metre for new builds is likely to be around €1,500. Rental returns should be good if you furnish well as it's a popular area for tenants, but IMO, there is probably not good long-term capital appreciation potential in this area. Tired of living on dirty streets in run-down parts of the city centre, some locals currently consider new buildings in this part of the city to be quite trendy to live in. However, this part of District XIII used to be one of the dodgiest areas of the city and the word 'Angyalföld' (Angel land) still has ironic connotations and is neither a particularly pleasant nor well-located part of the city. Most wealthier young Hungarians I know prefer to live in small apartments in prestigious parts of the downtown area (particularly the better parts of Districts I, V, VI). Younger (no children) expats I know personally only want to rent/buy in the downtown area.
I prefer to invest in renovated buildings in more prestigious areas, but it is almost impossible to find good apartments at reasonable prices in the best parts of the city. It typically takes a few months of searching. I'm always on the lookout, but rarely come across properties that I'd be happy to invest in.
If you choose to invest in classic buildings, you will find that the price/sqm will be a lot more realistic - at €1,200-€1,500 for renovated apartments in totally renovated buildings in premier locations. In my opinion, the capital appreciation potential for these properties should be higher. If you choose correctly and spend a bit extra on furnishing, you should be able to find foreign student/young professional tenants with little difficulty and achieve rental returns of 6-7%. Make sure to stay away from overpriced properties, buildings in poor condition, secondary locations, dark or noisy apartments, apartments with strange layouts, properties with a poor location within a building and overly busy streets. You'll find that this constitues 95-100% of properties currently on the market. For the most part, I prefer to stick to the quieter parts of District V, preferably not too close to Szent István Körút, where overpricing is more common or in District VI, particularly certain streets between Andrássy and Király, but close to the opera house. In my experience, renting high-quality classic apartments in this area at a reasonable price to expat students and young professionals has not been particularly difficult.
Budapest is a complicated market, so take your time and research extensively before committing to anything. Prices are unlikely to shoot up any time in the near future, so time is on your side.
L
lee-m
Guest
I believe the best return is for city center properties mainly 5th, 6th, 7th and part of the 13th district, in the 5th, 6th, 7th I will recomand classic apartments 65m2 - 85m2 with 1 or 2 bedrooms. in the 13th if it is in the part close to the st istvan road classic apartments can be considered as good investment in other location only new built. you can count on 6% - 8% return.
have a look at www.budapestrent.com where you can see samples of size / rental income.
bear in mind that in the center almost all the tenants will demand a fully furnished apartment and it costs 6,000 - 10,000 euro to fit out depands on the size and number of rooms, when you fit out the property you can get a foreign tenant - students mainly. corporate clients will be looking for bigger apartments but there are not too many of them so the competition will be difficult
I agree with budapest as far as the price level concerns.. good luck
have a look at www.budapestrent.com where you can see samples of size / rental income.
bear in mind that in the center almost all the tenants will demand a fully furnished apartment and it costs 6,000 - 10,000 euro to fit out depands on the size and number of rooms, when you fit out the property you can get a foreign tenant - students mainly. corporate clients will be looking for bigger apartments but there are not too many of them so the competition will be difficult
I agree with budapest as far as the price level concerns.. good luck
H
Hungary
Guest
mikey12,
I suggest you ask proffesional advice from independent consultant in relation to property investment in Budapest. This market is more complecated than you expect. Almost all districts (twenty-two+an island called Csepel district 23) have business potentials but there is no best place to invest. That is why investors may make mistakes when they are talking about districts and areas.
The question is not where you invest but how to invest to get as high return as you can. In this case, location is also not as important as investors think. Let us see an example:
- Buda side, district 3 (normal location)
- 40 sqm new build studio apartment is rented for HUF 125,000 with car parking
- tenant is a Hungarian solicitor, 32, who has an own law firm, 12 months lease
- no special view but furnishing is high standard
€500 monhtly rent is achiveable in Pest side too if you have a nice one bed apartment.
I see investors prefer Pest side which may be a mistake. For instance Gellert Hill (border of district 1 and 11) is a prime location in Buda. Corporate tenants would be happy to rent apartments there especially new build. Or Castle district in district 1 is also a prime location.
Pest side is over supplied with apartments for rent. Buda side has more potential in terms of yield and appreciation.
As far as I know, Irish and English think public transport is important. To be honest, expensive apartments are rented by tenants who have own cars or use taxi service.
Again, I think Pest side is popular but Buda side has a sortage in nice furnished apartments for rent.
Budapest has pitfalls and usually investors are not careful enough.
If you want to invest you do it as a professional without any mistake. Therefore, apartment portfolio is a good solution. Diversification would help you mitigate potential risk such as long vacancy time, low rent.
I suggest you ask proffesional advice from independent consultant in relation to property investment in Budapest. This market is more complecated than you expect. Almost all districts (twenty-two+an island called Csepel district 23) have business potentials but there is no best place to invest. That is why investors may make mistakes when they are talking about districts and areas.
The question is not where you invest but how to invest to get as high return as you can. In this case, location is also not as important as investors think. Let us see an example:
- Buda side, district 3 (normal location)
- 40 sqm new build studio apartment is rented for HUF 125,000 with car parking
- tenant is a Hungarian solicitor, 32, who has an own law firm, 12 months lease
- no special view but furnishing is high standard
€500 monhtly rent is achiveable in Pest side too if you have a nice one bed apartment.
I see investors prefer Pest side which may be a mistake. For instance Gellert Hill (border of district 1 and 11) is a prime location in Buda. Corporate tenants would be happy to rent apartments there especially new build. Or Castle district in district 1 is also a prime location.
Pest side is over supplied with apartments for rent. Buda side has more potential in terms of yield and appreciation.
As far as I know, Irish and English think public transport is important. To be honest, expensive apartments are rented by tenants who have own cars or use taxi service.
Again, I think Pest side is popular but Buda side has a sortage in nice furnished apartments for rent.
Budapest has pitfalls and usually investors are not careful enough.
If you want to invest you do it as a professional without any mistake. Therefore, apartment portfolio is a good solution. Diversification would help you mitigate potential risk such as long vacancy time, low rent.
Last edited by a moderator:
H
Hungary
Guest
The following website will help you contact agencies and get information about Budapest property market. For research, it can be a good beginning:
Hi Mikey12
I am currently going through the buying process in Budapest and I would thoroughly recommend that you take a 3 day trip out there and meet up with Budapest (your first respondee). It does take time to find the right one but the whole experience is more than worth it. I firmly believe that this investment will pay off, in the long term.
I cannot recommend him highly enough for the non pressurised advice and professionalism from the outset. He does the research and can show you a selection of properties in your pricerange. He has the LOCAL knowledge which is invaluable for us strangers coming into a market that we dont understand.
I wish you luck
I am currently going through the buying process in Budapest and I would thoroughly recommend that you take a 3 day trip out there and meet up with Budapest (your first respondee). It does take time to find the right one but the whole experience is more than worth it. I firmly believe that this investment will pay off, in the long term.
I cannot recommend him highly enough for the non pressurised advice and professionalism from the outset. He does the research and can show you a selection of properties in your pricerange. He has the LOCAL knowledge which is invaluable for us strangers coming into a market that we dont understand.
I wish you luck
I use Tower Budapest, and have no complaints. Friendly bunch. emails responded to within 24 hours (which is better than I do myself 
). www.towerbudapest.com
On the other point in the thread re good areas to buy-2-let, how about the parts of Dis 6 and 13 near the Nyugati Station (back of WestEnd center) where the Government are going to construct the new Gov buildings, ready in 2009 (total spend 50-70Bn HUF).
any thoughts?
). www.towerbudapest.comOn the other point in the thread re good areas to buy-2-let, how about the parts of Dis 6 and 13 near the Nyugati Station (back of WestEnd center) where the Government are going to construct the new Gov buildings, ready in 2009 (total spend 50-70Bn HUF).
any thoughts?
I second what emnc says. I've found Budapest invaluable for all my dealings in Budapest. He found a beautiful apt for me in a lovely area & helped with everything from showing me around the city & explaining the different areas to introducing a lawyer, opening a bank a/c etc as well as being a friendly face to welcome me anytime I have visited.
It's wonderful to know someone on the ground out there who is looking out for your interests.
It's wonderful to know someone on the ground out there who is looking out for your interests.
Not sure, paddyd. In my opinion, this area is still a bit risky and already overpriced. A few years ago, it was almost impossible to sell anything on Podmaniczky utca. Now, asking prices are on par and often higher than similar apartments in better parts of District VI. I don't really see the logic of this.
The proposed government buildings are already factored into many prices in this area. Szinyei Merse Ház, for example, is located on Szondi utca, one of the worst (albeit improving) streets in the district and Autoker are really pushing the government buildings as a selling point to Western investors.
The District XIII side of Nyugati has traditionally been more popular but has remained more or less stagnant for several years now. It's very difficult to find reasonably-priced, good quality investments in this area also.
H
Hungary
Guest
Hi paddyd,
This part of district 6 is a good example why Budapest property market is to be known as a complicated market:
- price differences and rental potentials can be hugh among streets and buildings
- no best street because condition of blocks are not the same
- new apartments are rented easier with better yield and return
- but classic apartments have better outlook for capital appreciation
If you need high return in short term, purchasing new build apartment could be a good choice. But classic apartment may provide you a solid profit with capital appreciation especially if you buy an apartment under the market price due to low condition of the block.
For instance, one of our clients purchased an apartment in this area close to Podmaniczky on Vorosmarty. The building is awful in terms of conditions of the block but it is beautiful in terms of classic style. At the minute it is almost impossible to be rented but owners have diceded to sell the loft (560 sqm and 2 storeys can be built)for renovating the building and fitting a lift to a builder that will build loft apartments at residents committee meeting. The apartment purchasing price was HUF 175,000/approx €700 per sqm in early 2006. I have no doubts the apartment will be worth much more once renovation is completed and lift is fitted.
Andrassy Avanue Garden is also in this area where beautiful apartments will be completed soon. This part of Budapest still has business potentials unless you are a short term investor(not more than 10 years).
However Ujlipotvaros in district 13, which is close to WestEnd is now flat and no any expectation regarding boom due to new government district. Prices are stable becasue there are no space for new developments; and new developments in district 13 attract more buyers than secondhand apartments.
That is now the story here.
This part of district 6 is a good example why Budapest property market is to be known as a complicated market:
- price differences and rental potentials can be hugh among streets and buildings
- no best street because condition of blocks are not the same
- new apartments are rented easier with better yield and return
- but classic apartments have better outlook for capital appreciation
If you need high return in short term, purchasing new build apartment could be a good choice. But classic apartment may provide you a solid profit with capital appreciation especially if you buy an apartment under the market price due to low condition of the block.
For instance, one of our clients purchased an apartment in this area close to Podmaniczky on Vorosmarty. The building is awful in terms of conditions of the block but it is beautiful in terms of classic style. At the minute it is almost impossible to be rented but owners have diceded to sell the loft (560 sqm and 2 storeys can be built)for renovating the building and fitting a lift to a builder that will build loft apartments at residents committee meeting. The apartment purchasing price was HUF 175,000/approx €700 per sqm in early 2006. I have no doubts the apartment will be worth much more once renovation is completed and lift is fitted.
Andrassy Avanue Garden is also in this area where beautiful apartments will be completed soon. This part of Budapest still has business potentials unless you are a short term investor(not more than 10 years).
However Ujlipotvaros in district 13, which is close to WestEnd is now flat and no any expectation regarding boom due to new government district. Prices are stable becasue there are no space for new developments; and new developments in district 13 attract more buyers than secondhand apartments.
That is now the story here.