Is it a good idea for students to buy real estate in Budapest? YES!
It is becoming quite a popular trend among international students who are doing their full academic studies in the city or expatriates living in Hungary to buy real estate in Budapest. Since their work assignment or studies will take several years, in which they will need to pay rent, it’s a smart move for them to invest this money in buying real estate in Budapest, rather then use it on rent payments, and in addition, benefit from owning a property which will provide them with another source of passive income after leaving Hungary to pursue their career.
Another advantage is that since students usually rent flats in central locations, which are nearby public transpiration or near their universities, then they usually purchase real estate in these prime locations, which means the chances of having the property vacant are very low, since there will always be students looking to rent flats in these kind of areas, making this investment very lucrative for young investors.
Though easier for EU citizens (or Chinese nationals, under the Hungarian residency bond program) to purchase real estate in Budapest, it’s still quite a simple process which is available for investors from all countries and continents, so even investors from non EU countries can easily buy a property in Budapest, it just takes a few weeks longer, and they can’t get a loan from a Hungarian bank in most cases.
Things to know when buying real estate in Budapest:
- Market prices are soaring: Real estate prices in Budapest have been soaring over the last couple of years, as the market started to bounce back in 2014 from the global financial crisis. So it will be wise for investors to buy a property as soon as possible, as prices are expected to continue their rise (especially when comparing to other cities in the region, such as Warsaw or Prague).
- The supply is limited: Since there are almost no vacant lots in the city center to build new apartments on, the supply of available properties for sale is limited, and since there’s an increase in demand by foreign investors, prices are rising. So again – if you see a property which is in a good market price, you should positively consider purchasing it.
- Yield: a realistic yield should be around 5%-6%, so don’t be tempted by exaggerated promises that some real estate agencies might make. However – take into consideration that properties in the city center may be rented also during the summer for short term daily rentals, which when taken into account may increase the yield substantially.
- Heating system: Some of the heating systems in the classical apartments might be old and cause problems. Changing a heating system might be (relatively) quite an expense, so make sure to thoroughly inspect it’s condition.
- Investors terminology: If this is your first real estate investment in Budapest (or in general), you might encounter terms and phrases which you are not familiar with, so make sure you’re up-to-date with a current real estate glossary before meeting with the landlord or agency.
Where to find real estate listings in Hungary:
There are many real estate agencies and some good online portals where you can find available properties for sale. Since most agencies publish their real estate listings online in any case, then you don’t need to run between agencies, instead you can simply browse on the leading real estate portals in Hungary and contact the various agencies listing their properties with them. Some good places to start your properties for sale search are:
- ingatlan.com – This is the biggest online real estate portal in Hungary. It’s relatively easy to use, but since most agents in the city publish the same ads on it, then it has a lot of duplicate ads, which can get very frustrating.
- PropertiesInBudapest.com – A relatively new real estate portal. It’s easy to use, multilingual and has detailed property listings. However, it’s smaller than ingatlan.com, so it doesn’t have the same amount of listings. In any case, it has an excellent blog for investors which is very informative.
- ingatlanbazar.hu – Another big real estate portal, which is mainly used by local Hungarians. The biggest advantage of this site is that since it’s mainly directed at the local market, it’s possible to find properties which are at a bit lower prices, however – it requires some basic Hungarian skills to navigate it.