The rental market in Budapest, in every buyers interest

Even though Budapest is a capital with more than 2 milion people it is fairly easy to find a flat to rent or to buy. Buying an apartment seemes, in a long term, to be a really good investment and it is fairly cheap comparing to other capitals in Europe. But it is still a big investment to make. There are two main types of investments: those aiming the highest possible capital gains and those focusing on a rental income as high as possible. Most people would like to combine these two types.

But since there are so many free apartments to let, how can you be sure to not buy a property that will be left empty? Looking at the different types of tenants and what they are looking for, you know where it is safest to invest and how to easiest attract people to rent your apartment. Who wants to rent an aparment in Budapest? Where do these people want to live? What standard are they looking for? These are some questions you have to know have answer to, if you want to buy a property easy to let.

tenants
There are a lot of properties for rent in Budapest today, so you might think that the concurrance of the tenants is hard. But if you look at what most of the tenats are looking for, you'll see that there are not to many properties of interest.
The most common tenants are businessman, students from Norway, Sweden and Germany studying medicin and veterinary. There are also students from Ireland, Turkey, Austria, Greece all again studying Medicine, Veterinary and Pharmacy and their requirements are usually very similar.
They are looking for practical, clean apartments in a good, safe, central location (for students: nearby the universities) well connected to public transport.

Prices today
A classic apartment today costs from 300-500 euro a month to rent, for a one bed room, 500-700 euro for a two bed room and 750 euro and up for a three bed room or more. If it is a new apartment the prices are a bit higher, approximately 100 euro more a month.
Like I said earlier, most tenants are students and businessman and usually they require a quit high standard of living. They are often far away from home and need to work/study a lot and to go home to a safe environment is important, and to get a feeling of really beeing home, they rather pay a little bit extra to getthat feeling of a real home.

Investors
Most of the real-estate investors from abroad here in Hungary come from Ireland and the UK. Increasingly more and more people from Norway are also starting to invest in properties here in Budapest. Generally people have an interest in investing in properties in their home country, but some simply can't afford the property they are looking for, and some just wish to spread their investment overseas where they hope for better returns in the long term. In the UK many people invest in properties overseas because of the new Self Invested Personal Pension (SIPP) fund. The new pension rules will allow a personal contribution of 100% of your earnings in any tax year, considerably more than the present system.

The investors are a mix of private individuals and married couples and people also set up Hungarian companies and many satisfied investors often buy more than one property.

EU
Hungary entering the EU has effected the market in many kinds of ways. It makes it easier for companies to establish here, students can get an EU recognised degree, some students can go to schools here for free and it is also easier to get a scholarship for studying abroad. That means more people who are used to a higher standard come here and are looking for a high standard homes. There are more and more students and businessman moving to Budapest for a short or a long term, and they all make a contribution to increase the prices in the rental market.

There are a lot of properties for rent and those that are not in good locations or are in poor condition will probably still increase in process but potentially much more slowly than the apartments in good locations and in high standard. Even though the Euro is far away, prices will probably be rounded up and prices will generally go up in both property prices and rental prices.

Summary

So to be aiming the highest possible capital gains in your property, is to buy one in a good location, either in a good allready high standard apartment or renovate an old one, and to rent it out for a reasonable price to someone who requires just that kind of flat. It is easy to make your apartment the most attractive one, and if it is, you will easily let it out and don't have to worry that it will be empty and you without income. And in the mean time, the value of your property will increase and give you an even bigger income the day you decide to sell.