Investing in Poland

perhaps I am missing something but when I clicked on your link I was transported to a load of thinly disguised corporate propoganda that bigged up Property Secrets. When I finally found the article there was a short lead in to an article and the suggestion that I shell out my hard earned cash to learn more.
this is hardly in keeping with our sharing, caring philosophy here on aam
if you have read the article, please write a summary pointing out the key points. However, if you are an employee of property secrets and I rather suspect that you are, please try and offload your crap Bulgarian property some where else

I particularly like the article

perhaps your post should be renamed 'how to spot a distressed real estate company?'

Propman has a vested interested in selling property in Poland but he is a complete gentlemen and gives excellent advice to anyone who needs help.
That is how you ought to behave.
 
Property secrets are a subscription service. Their analysis need to be taken with a pinch of salt as they are usually trying to flog the area they have just 'analysed'. Saying that they do provide a fairly transparent but rather pricy service. I don't think they flog Bulgarian junk. Most of their deals are in Polish & Romanian cities.
 
without wanting to encourage anyone to visit their site, you will find Bulgarian offers in pride of place on their homepage. believe me I am not imagining it.

this is one of the most shameless piece of self promotion I have seen from them in some time. Posting a link to a bunch of virtual judas goats who extol the virtues of Property Secrets - a tactic worthy of Inside Track
 
hythorn said:
without wanting to encourage anyone to visit their site, you will find Bulgarian offers in pride of place on their homepage. believe me I am not imagining it.

this is one of the most shameless piece of self promotion I have seen from them in some time. Posting a link to a bunch of virtual judas goats who extol the virtues of Property Secrets - a tactic worthy of Inside Track
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Not sure if the original poster is from Property Secrets but they do sell Bulgarian properties. Only Sofia though, to be fair they have always posted on how shi*e bulgarian costal and ski resorts are.
 
mr murphy said:
has anbody bought their property as a company, i bought a 1 bed off the plans in warsaw and its due for occupation in september,

It was not recommended to me to buy my property as a company ownership back in early 2006. Company purchase is recommendable only when the value increase of the property is forcasted as low. The situation may be different now as there were substantial increases in 06/07.


just thought this was worth mentioning:
I was just watching Amanda Lambe on her channel 4 Program earlier this evening which did a number of countries in CEE for property investments. Her sypnopsis at the end of the program - " best bet for a property investment in CEE is Warsaw "
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fear peile said:
mr murphy said:
has anbody bought their property as a company, i bought a 1 bed off the plans in warsaw and its due for occupation in september,

It was not recommended to me to buy my property as a company ownership back in early 2006. Company purchase is recommendable only when the value increase of the property is forcasted as low. The situation may be different now as there were substantial increases in 06/07.


just thought this was worth mentioning:
I was just watching Amanda Lambe on her channel 4 Program earlier this evening which did a number of countries in CEE for property investments. Her sypnopsis at the end of the program - " best bet for a property investment in CEE is Warsaw "
Click to expand...
Click to expand...
 
hiya fear,thanks for the reply,i do hope i come out of this property thing alright,i don't always pay to much attention to what they say in tv programs,i reckon its all big bussiness for the tv companys to but yes i do hope poland is more able to ride out the storm that seems to be brueing in the more developed western world but i just get a feeling that the worst hasn't hit yet.mr m.
 
Mr M,

the prices in Wilanow are what are being asked for similar sized properties. It is in all fairness a nice area and was host to many of the smaller sized embassies in Warsaw.
As for setting up a Polish Sp zoo (limited company) you will need 50,000 PLN in working capital to be deposited into a bank account and we waited 6 months to set ours up with a speedy lawyer. the bureaucracy in Poland is a little stifling so I would not go down this route just for the sake of one property.

The good thing about A Place in the Sun is that many British people take it as gospel. Ms Lamb's sources seem to believe Warsaw will double in size in the next ten years. It might be the case. EU subsidies will encourage farmers to be productive rather than subsistant and this will force people off the land into the cities. as far as I remember over 30% of Polish people are involved in agriculture compared to 2% in the UK and 0.75% in the Netherlands. Also the old chestnut that all capital cities in Europe should house 10% fo the country's population so Warsaw is statistically hopelessly undersized and must expand.
Interesting that Bratislava did not get a look in.

I would not be overenthusiastic about making a fortune in Albania. The Bulgarian friends that I have who live in Warsaw all complain about how wild and lawless Albania is.
 
Programmes like these are 90% entertainment and 10% factual. They focus on Poland, because the viewership is interested in Poland at the minute.

fear peile, it's interesting to hear real feedback from someone who has rented their Warsaw apartment. What return are you getting at that rent?
 
budapest said:
Programmes like these are 90% entertainment and 10% factual. They focus on Poland, because the viewership is interested in Poland at the minute.
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as I mentioned before many British people take such programs as a valuable source of information. if they did not there would be no place for companies like Inside Tripe or 'them that shall not be named'. As Mr M has bought in Warsaw he can expect to be joined by other British investors who will buy there at a later date, thus pushing up the price of real estate. Not all buyers bother with due diligence (unlike Mr M), they just follow the herd - it is not the wisest course of action but it is human nature nevertheless
 
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@Hythorn:

"As for setting up a Polish Sp zoo (limited company) you will need 50,000 PLN in working capital to be deposited into a bank account and we waited 6 months to set ours up with a speedy lawyer".

With all due respect mr Hythorn, but your lawyer was neither speedy nor efficient. The fact is that you need to declare PLN 50k doesn't mean that you need to have the money. Simply issue the total number of shares that is worth more than 50k and write it in the memorandum of articles. Finito.

Second thing - however the full registration of "spolka z o.o." might indeed take 3-6 months, it is only the registration process with the court that takes so much time. In practice after a meeting with the lawyer (notary public) and registration with the revenue you begin to trade as "spolka z o.o. w organizacji" (ltd. in organization) - I reckon it's 2-5 working days. I have personally set up a spolka z o.o. in December 2006.

Regarding properties - the only disadvantage of having a Polish LTD is fact, that every property owned by this entity is treated as a COMMERCIAL PROPERTY which generally means that:

- you must register for VAT and charge it @ 22% - (said before: Poles hate paying tax and are generally willing to rent your property illegaly)

- you will be charged much higher property taxes (200sqm house in my area = 600 PLN/year while same commercial is 2600 PLN/year)

The good news is though, you will probably pay only 20% tax in Ireland (Dividend Witholding Tax) on all eventual income, not 35% on rental income.
 
thanks both of you for your info on the company isssue, ive read alot more about the company thing and its not worth it for me, thanks for all info hythorn and polish guy.mr m.
 
@ Polish bloke

you may very well be right and it is a shame we did not have this conversation a year ago

the lawyer was a family friend in Warsaw so I dread to think how long this might have dragged on otherwise

we were not able to find any alternative but to sink 50,000 PLN into a bank account to provide working capital. fair play to you for finding a solution to this

compared to the UK and Eire, the bureaucracy involved in setting up a limited company is far more complicated that is for sure and I believe that Mr Murphy has made a wise choice in not setting up a Polish Sp zoo
 
Hythorn. Indeed I have set up "spolka z o.o." in Poland (Dec 2006) and now a Limited company in Ireland (Oct 2007). Both same profile.

Even though you do not need 50k PLN in cash all the related legal fees would cost you around 1500 - 2500 or even 3000 Euro to set it up in PL.

In IRL it was exactly E 306.00 and took a week.

Accountant fees are not significantly cheaper than in IRE and I guess that Polish accountant dealing with Irish/UK clients would charge more than in Dublin.

No special rental income tax though. However for an Irish investor it's probably best to use RYCZALT TAX (8,5% and 20% over a certain income, no deductions)
 
budapest said:
Programmes like these are 90% entertainment and 10% factual. They focus on Poland, because the viewership is interested in Poland at the minute.

fear peile, it's interesting to hear real feedback from someone who has rented their Warsaw apartment. What return are you getting at that rent?
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Hi Budapest,

I dont take to much attention to % yields when purchasing as every agent seems to have their own formula for calculating.

What my concern when purchasing is the actual costs figures

Currently the rent is covering mortgage, tax on rental income, insurance, management and maintenance fees, so I am not out of pocket. If interests rates hadn't increased since I purchased I would now be making a nice little profit each month.

I wouldn't be in this position if I pur here in Ireland in 2006, First of all I would now probably be in neg equity on the pur costs and would have to back the rental income from my own resources to pay mortgage.

In Poland rent is covering all costs and the apartment has increased in value substantially.

Just as a matter of interest, what formula would you use to calculate yield
 
The usual formula is one year's gross rent divided by the purchase cost, excluding legal fees, etc.
 
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