Investing in Budapest as a Ltd Company

Hi Shnaek,

I went through OPI initially in Maynooth. They charged me 4% for their 'help' which consisted of out of date documentation that i could have got from the net, a printout of apartments that were sold 6 months ago, and unrealistic cost information. To be honest, budapest invest who i also went to see, seemed even worse, although it is a personal opinion.
I went over there a few times and have now bought a lovely 1 bedroom apartment in a great area for €45k. I'm pretty impressed, and had a tenant within a week (250 a month). I'm stll on the lookout for financing for a second one, as you can see.
I've got a few contacts there now, and the estate agent that i'm dealing with is opening another branch in december, and i'm going to be her fledgling agent over here. I'll use my experiences of OPI as a benchmark, and try to offer information and help (for a moderate fee) which is both up to date, and realistic.
If you are intent on purchasing before december then i'd suggest OPI purely as they seemed more interested than budapest invest. If you can wait till after christmas, our website will be up and running, and the database of properties will be online. I'll keep you posted.

Piggy,

i am now a customer of Raffeisen and they told me that they need to see two years worth of business and transactions before they will lend to foreigners. Did you visit the bank in budapest or contact them remotely?

Rich

Management company

A bit of advice to any of you that are going to use a management company over there to run things. I've just been quoted €4500 to furnish a pristine apartment (1 bed) by the company that i was using. Bearing in mind that we are apparently the most expensive country in the EU, i priced their furnishings over here from the list they gave me, and it came to under €1500. Its also worth mentioning that they charge a 10% fee to buy this stuff for you. Its cheaper for me to fly back out there, stay in five star accomadation, and furnish it myself, in fact i'd still have change for a round the world trip. Anyone think that they might have a relative in the furniture shop they are using?

scam artists......

Management company

Hello

How can I contact you off line

thanks

Budapest investment

rdoleman,

Thanks for your response. I might wait until after December myself, so I will definitely keep an eye on your website. What you bought is exactly what I am after - a one bed in a good area for about 50K. I have also been looking at Bulgaria as there are fine offers (on paper at least!) there, but much of the information I have relates to Budapest. I would travel there before Christmas except I don't have the holidays to take!

Re: Budapest investment

Unless things have changed very drastically in Bulgaria since I was there in '96 and '97 you would need to do some serious homework before investing there. Their currency, the Lev, declined by over 90% against the dollar in the course of a few months in early 1997. It was no exaggeration that people feared they would starve in the economic mess that ensued.

Re: Management company

If you register i can send you a message

Management company

If you register i can send you a message,

Here you go, thanks

Re: How I contacted Raffeisen

rdoleman,

Excuse my late reply. Haven't been around much lately. I contacted them via email. Never met them in person.

Piggy.

P.S...best of luck with the second apartment. Your experiences are making me think about this once more!

Re: rdoleman

rdoleman;
please excuse me if I'm blind, but you mentioned setting up a website, and I can't find any reference to it's address. Can you post it?

Re: rdoleman

If you can wait till after christmas, our website will be up and running, and the database of properties will be online. I'll keep you posted.

Click to expand...

rdoleman,

Have you a business interest in this subject? If you have, perhaps you should disclose this interest, given that you have used this thread to criticise apparently competing businesses.

Property Fund

Does anyone know of company who manages funds specialising in the Hungary / Czech markets.

What would the main pitfalls of investing 50K in a fund like this, as opposed to buying your own property

Scheme

There is an Irish development group involved in large scale building in Budapest, currently raising €6m to €7m at €200k minimum. This is to be put into an 80% geared scheme(s). I'm awaiting the prospectus. a lot of ground work over a year has been put in from what I can see, with a high spend on tax advice.

The tax situation is complex and not helped by Irish Anti-Avoidance rules about short term overseas investment. I would take it slowly if I were you. Flying to Budapest and buying a property over a few trips is the easy bit. Making sure you're not being ripped off on prices, and that you're not going to get hammered on tax is the real key.

I suggest you spend money on proper tax advice, or join in a scheme like mine from Hiberno-Hungarian Enterprises where the works done for you.

Re: Scheme

Hi Ear to the ground,

Can you post a link for Hiberno-Hungarian Enterprises?

To be quite honest, €200k minimum sounds awfully expensive. You could buy two nice apartments for that...possibly more actually.

Thanks,

Piggy.

Budapest

There isn't a website. It's one of those quiet operations for a small number of people. As far as I know the 200k min will amount to 4.5m from about 20 investors in the development company. The company will gear up to 80%, build and sell units to the domestic hungarian middle class market at abot €50,000 a unit. The total cost is about €24million, and expected profits over 100% over the short period involved.

This isn't a but-to-let investment, but one earlier in the process where there is more profit potential but different risks.

There is a lot of hype about Budapest at the moment, but its just hype. What agents here and there won't tell you is that the under 250k property market is flooded, and there is over capacity in this part of the market. Getting a long term tenant for units at less than €250k where you will get top location/ top specunits within sight of the Danube, is difficult.

If you've 50k equity you may not have the capacity to get into the safer top end of the market, and where you could rent to a foreign exec for example. This is why I'm choosing to put my stake in the ground at the development end.

Criticisms

Hi Tommy, and all,

sorry it took so long to reply

i'd like to clarify a couple of issues in reply to your post:

Have you a business interest in this subject? If you have, perhaps you should disclose this interest, given that you have used this thread to criticize apparently competing businesses.

Click to expand...

I've a personal interest in this thread and i used this site extensively to understand the issues and legalities of buying in Hungary, before embarking on my own purchase. I am an amateur investor who has had a strong interest in central Europe and its investment potential for a long time.

My criticism of other 'competing businesses' was stated as my personal opinion, and any information that i give here is also not an advertising ruse. I have been asked if i am interested in becoming an agent for an estate agent in Budapest, and i've been open about my potential business interest in the subject. I am getting involved with this as i have personal experience of the matter. This experience has lead me to believe that i can improve on the service that i received, and i've made that very clear. I also gave my opinion that out of the companies that i visited for advice, OPI were the better of the two. I was aiming to give some background to my personal situation and involvement in this industry, which is currently amateur. I do intend however, as previously explained in detail, to set up as an agent in Dublin and to trade, using my experiences as a rule of thumb.

I did not intend to put down the business efforts of any established competition. Hopefully the business will be set up by December and potential investors will make up their own minds after receiving competing offers from all three businesses.

Sorry for any misunderstandings

Rich

Investing in Budapest

Hello,

I am also in the process of seeking the best way to invest in Budapest. Investing in Budapest is a bit tricky now, as some sectors in the Real Estate Market are doing well, others are on the down turn. I have been looking into this for about 2 months, and some friends expressed interest as well. We thought the best way maximize gain and cut overheads was to form a central fund. So we decided to form a real estate investment scheme to allow us to purchase larger spaces together and then divide them up. Now we make a small group of people in UK and France, and are receiving growing interest by word of mouth.

We are currently getting help from several contacts in Hungary, and financial advisors in the UK. We are in the process of sorting all the legal/contractual stuff via a registered company in Hungary, that we hope shall be up and running by the end of January, or even before.

If any1 has similar experience, could you please contact me?

Thanks

Dan

Whops

I am a registered user, somehow I managed to post the latter otherwise! So if any1 has exprience, or questions to the post above, please send me an e-mail.

Dan

Re: Investing in Budapest as a Ltd. company

Hi Ear To The Ground,

200k does seem to be alot to spend to me too. My experience is that the easiest rental market is in the 50-60k apartments, in area 5/6. You don't have to invest an enormous amount of money in refurbishment, and you'll get the upmarket student population within a month or so. I have been reliably informed that its very easy to find potential tenants in this bracket by 2 different management companies. I found a tenant within 3 weeks for mine, and that was before we spent any money on furnishing it. OK you will only get 250-300 euro per month, but as a percentage of the cost of the property, i don't feel that this is too bad.

The thing about the city is that there is a finite number of apartments in the central areas (5 and 6), so there will always be a market for them. Development space in the city centre is extremely limited, so i can't see much chance of change there. I was also informed that you will get more for new 'western style' apartments, but that amounts to about 450 euro a month for a 40-50 sqm property. These developments are retailing at around 150k (from the adverts i saw), so my opinion was that you'd get better value from an established property, which are generally beautiful architecturally.

Just my 2 cents worth.

Rich

Re: Investing in Budapest as a Ltd. company

Hi Rich,
I am interested in investing there and agree with what you are saying regarding the finite number of appartments in 5, 6.

I havent taken the step yet in purchasing. Would be grateful if you could indicate which agency you went through. There are a lot of agencies and difficult to weed out the truth and facts from them.

I have tried to register my account here but having problems..

Anyone out there with comments on the different agencies working in Budapest

Hello to everyone interested in investing in Budapest.

I am not surprised to see such interest in this opportunity as it is such a good one. I am a bit biased though, as I purchased a property there approximately 1 year ago.
I can relate to the worries people may have about buying in Budapest as I went through them all myself.
I agree with some individuals on this website when they condemn certain Irish agents on the service they provide, as I had the same experience but I will refrain from mentioning names.
I also fully disagree with anyone charging commission to the buyer from Ireland. In my book this is pure greed. In Hungary, as in Ireland all commission is paid by the seller.
After my experience, hopefully I can be of help in making the purchase process easier for anyone interested.
I have made a number of contacts in Budapest, all of which are very well known and respected. We have come to an agreement to enable us to work together.
My role will be to provide information to customers purchasing in Budapest and to refer them to a real estate agent and a lawyer to complete the purchase.

Points to note:
- The purchase can be completed in one visit and will take approximately four days.
- The buyers hand will be held throughout the whole purchase process.
- The prices are probably the best value you will find as they are local prices and not the usual inflated prices for foreigners..
- I maintain a list of currently available properties.
- I am a small time investor with no links to any Irish real estate agency
- A genuine good feeling of trust is guaranteed.
- I do get a very small cut but this is not provided by the buyer and is not added onto the purchase price of the property.

I am planning an information evening for November 10th at 8pm in Dublin.
E-mail to budainvest@hotmail.com to register your interest or make any queries.
If you can not make this meeting, you can still contact me to make other arrangements. Ph: 086-8219422.

Regards,

Dermot.