Property in Bratislava

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Newdad

Guest
I'm looking to buy an apartment in Bratislava (Slovakia) and was wondering if anyone else has experience of doing so. The agents I've talked to, say to expect a gross rental yield of 6-8% (for an apartment in District 1), however capital appreciation for the last number of years has been 10-15%. I know that past performance does not guarantee future value but the way I look at it the rent should cover the running costs (mortgage etc) and the gain will come from capital appreciation. I'm looking to invest between 100-120K and am looking for a relatively 'safe' option as I have other moneys in higher risk projects. I know that the safest option is a 3.5% savings account but this return does not interest me. I'd appreciate peoples opinions on Bratislava/Slovakia and if they think my money would be better spent elsewhere.

Thanks,

Newdad
 
I'd say your agent is lying to you with regard to gross yield and who says that capital appreciation in the past on quality apartments translates in to a similiar capital appreciation on your apartment which already seems to be priced highly compared to what my slovakian friend paid for his apartments in Bratislave.
 
Dipole, Why do you say 100-120K is too much for a apartment in Bratislava when you don't know the size, number of bedrooms etc. From my internet searches this appears to be the going rate for the nicer 1 beds and some two beds. Also what do you base your comment on that the agent is lying about a 6-8% rental yield, do you rent properties in this area?
 
100-120K is too much because you'll be lucky to find anyone, foreign or local who is willing to pay over €500 for rent per month for any sort of property.
Doesn't matter about the type of property; it has to be viewed as an investment.
Locals certainly won't pay big bucks even if they can afford it - austerity has still got a hold of that country.

When you were doing your internet searches were you reading slovak language pages or just the English ones?
Have you researched whether you are going to finance with a Euro zone or local mortgage?
Bratislava has potential and I'd buy there but not at the prices you are quoting. My slovak friend is buying another property there and he is certainly not paying the sort of money you are considering forking over because he knows the rental income will not service the mortgage payments on any 100-120K property; as I said the locals will not pay and western Europeans are scarce on the ground.
 
I enquired from an Agent who claimed possible 6% gross yields, but subsequently informed me that the rental market was not very well developed and not many renters, and lucky to get €400 pm for rental. Also, said Agents will exaggerate rental and yield. I could find no independent sources of info on market size, rents etc (and agent said you would have to ask around as no sources available because market immature). Suppose you have to take a view on how economy will develop and what opportunities that will present.
 
Thanks for the replies and the advice. From what I've read the Slovak economy is on an upward trend which I think they can maintain because their fiscal policy of low corporate tax will encourage this. Given a possible rental return of 400 euro pm then a price of 90K would seem more appropriate for apartments. Think it might be worth a trip out there to see first hand what’s there with the above budget in mind, if there is disparity between foreigner prices and what the locals pay then it might be worth putting in reduced offers and see if anyone takes the bait?

Newdad​
 
Newdad said:
Thanks for the replies and the advice. From what I've read the Slovak economy is on an upward trend which I think they can maintain because their fiscal policy of low corporate tax will encourage this. Given a possible rental return of 400 euro pm then a price of 90K would seem more appropriate for apartments. Think it might be worth a trip out there to see first hand what’s there with the above budget in mind, if there is disparity between foreigner prices and what the locals pay then it might be worth putting in reduced offers and see if anyone takes the bait?


Newdad
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Slovakia is a great market to go and invest in my opinion better thean all its eastern european competitors as we speak. It is safe as long as you choose your developers with care. I persaonally have invested however I have not gone for a residential let i.e. bratilslava i have gone for a ski apartment in the high tatras. We have paid 46,000 for a 1 bed loft at about 700 sq ft. we have aguranteed rental income for the first 2 years secured of 6% from the developer. I have borrowed the whole 46,000 and will be in positive cash flow on completion taking also into accoutn management fees. Bratlisava will be a good buy but is more expensive. Over 100k does seem a little steep considering also you look at neighbouring Prague which has enjoyed a boom in the last 2 years you can buy for less than that and is a similar investment. Bratilsava is considered as a mini Prague.
 
Just a bit of background info... (I'm just back (Tusday) from a holiday in Budapest, Vienna and Bratislava.)

I noticed half of Bratislava City Center is dug up at the moment and the other half has undergone very impressive renewal, with lots of pedestrianisation, shiny solid stone pavements, street lighting etc implemented. The outer city is the ugly place that reminds one of the images of communist tower blocks. The city is without a doubt betting on tourism for it's future. We traveled by train to it from Vienna and used both taxis and trams in the city - it has a very good transport system. Also, the city is very cheap to live in and there are plenty of Tescos and Carrefores around.

Dell, Accenture, AT&T, IBM, Volkswagon and SAP all have operations in the city which suggests a good industrial/commercial base to provide skilled employment. Might I add - unlike Budapest and Berlin, the population of Bratislava is actually growing. Companies will continue to be attracted to Bratislava due to the 19% flat tax in existance - however unemployment at 11.4% (2005) means current levels of emmigration may presist... which of course will dampen rental yields. The economy is growing at 5.5% a year at present (almost exactly the same as ours)

So what's all that add up to? Personally I think the cities proximity to Vienna, impressive investment in tourism and a well educated skilled labour force (I worked with 20 Slovaks last year; and there's a good university in the city) indicate a bright future for the place. However, as with any purchase/investment price is the most important factor (for example Google is almost certainly going to grow in the next five years... but I would'nt invest in it because the share price already reflects this.)

Check out
http://en.wikipedia.org/wiki/Bratislava
[broken link removed]
 
hmmm,Newdad,you mentioned you have you're money in riskier options,this to me seems risky.Realistically it's very difficult for non-nationals to get a feeling locally.A question that I think should be asked is who are you going to sell your property eg 5 years down the road to ? & what I hear from someone who was interested in buying in Slovakia,the prices sound like Paddy prices
 
What are prices like across border in richer more developed and toursit popular vienna?
A friend told me his brother who lives in vienna got a great 2 bed apartment for under 200k recently. Property would have to be a lot less than vienna to be attractive.
 
I am also interested in investing somewhere in eastern europe. I visited Krakow and spoke directly with developers and just didnt feel like it was something I was willing to proceed with.

I went into Madrid last year and this has performed very well.

I just searched the chats under 'Bratislava' and found this thread and wanted to get opinion on Bratislava as Im going to visit in the next few weeks with the mind of possibly picking something up.

A pal of mine tried to tell me today that his brother picked up an apartment a few months ago (2 bed) and pays a mortgage of a little over 250 per month on it and is currently getting rent of 600. I think his figures sound far too hard to believe but Id like to see if anyone else has immediate experience in the market.
 
You can still get 6% gross in city centre. Sometimes up to 7% is still possible. Tenants are only foreigners (executives, foreign workers, teachers, also foreign students sometimes) and they rarely want to live anywhere outside the centre. Now, CGorman, those links are not city centre apartments - except the first and the last one! Jegeho Alej development and Condominium Renaissance are way outside. Good luck in renting those to anyone. The city centre is only Bratislava I (Stare Mesto). If any agents tell you otherwise, its simply a lie. They all like to claim their properties are in the centre, but none of the new developments in Bratislava are. New builds are extremely tough to let... if you're lucky it takes a few months to let a new flat, mostly much longer. Not that they are bad, there just isn't demand in the areas where new builds are. Foreigners rent in the Old Town. Locals rarely rent at all, and those who do are at the lowest income scale, students, etc - if you put 2-3 into your flat, you get 300-350 euro/month. New builds may be convenient for UK agents to sell, but investors will be left stuck on renting.
 
lived there for a while and it is a great place but the attitude towards foreigners has changed due to the influx of stag parties.

From an investment perspective friends bought apartments when we lived and worked there last year and a couple of them now have them let for 1200 euro per month on six month leases. Not very easy to find tenants willing to pay this but they are out there in some of the many corporates named above.

Big thing to watch out for is the impact of the Ballymore development and peoples desire to live in sparly new apartments in the city rather than reno or infill which is what is mostly available now.
 
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