Regardless of the current economic situation, the question always arises: where is it worth investing capital to ensure long-term security and favorable returns? The possible answers are diverse, yet real estate investment always appears as an attractive alternative. But is it still worthwhile to consider real estate investments today? Who should opt for it, and when? What should one pay attention to? In this article, we will explore these questions.
Real estate investment generally begins with purchasing a property, which, if necessary, is renovated and later sold at a higher price or rented out. One of the most appealing aspects of real estate investment for many is its tangible and value-retaining nature. Additionally, property values tend to follow inflation trends.
Ideally, real estate investment begins with a good purchase. However, what individuals consider a priority factor varies.
Some investors prefer undervalued properties, which they renovate and aim to sell at the highest possible price as quickly as possible. Others plan long-term investments, prioritizing properties with favorable rental potential that generate stable and predictable income.
Budapest, in this regard, is an attractive investment destination. Compared to other European capitals, property prices are relatively affordable. Additionally, ongoing infrastructural and urban developments contribute to increasing property values.
Beyond the city, choosing the right neighborhood is also crucial. Properties in major cities, especially in capital cities, generally offer better sales and rental opportunities. Moreover, the demographic composition and infrastructure of the surrounding area significantly impact the property's profitability.
Hungary has also become a key destination for foreign investors, not only due to favorable tax policies and incentives but also because of a skilled yet affordable workforce, which continues to attract multinational corporations and real estate investors.
In 2023, average property prices in central districts of Budapest ranged from 3,000 to 5,000 EUR per square meter. In contrast, prices in cities like Vienna or Berlin exceeded 7,000 to 10,000 EUR per square meter. Average rental yields in Budapest were between 4% and 7%, with higher figures possible in areas with strong rental demand.
Since returns can be realized through both sales and rentals, investors must decide whether to pursue short-term rental options (such as Airbnb) or long-term leases (e.g., residential rentals or commercial spaces). Certain inner-city districts in Budapest are particularly well-suited for short-term rentals.
Luxury real estate investment has also gained popularity. The rising price trends observed since 2014 have been especially pronounced in the luxury property segment, making it attractive for investors.
Another option is off-plan investments, where properties still under construction are purchased at significantly lower prices from developers. Furthermore, real estate investment trusts (REITs) and real estate funds can serve as alternatives, focusing on long-term value appreciation.
Although real estate investment is less liquid and capital cannot be accessed in installments, a well-chosen property remains a secure investment with excellent return potential.
From a taxation perspective, Hungary offers competitive tax rates for both individuals and companies compared to other European countries, making real estate investment even more attractive.
While real estate investments can be diversified, this approach is typically more effective for larger investment portfolios.
Building an investment portfolio requires careful planning. First, investors should determine how much capital they want to allocate to real estate and for how long.
Staying informed about the current real estate market is crucial. The Hungarian National Bank (MNB) regularly publishes housing market reports, and the Hungarian Central Statistical Office (KSH) provides a housing price index with valuable insights.
Once an investor has selected a property, they should calculate the expected return. This analysis helps determine the investment's revenue and cost structure and provides a basis for setting rental prices. Consulting with a real estate investment advisor is highly recommended, as they can assist with financial planning, renovation cost estimates, taxation considerations, and identifying the most suitable mortgage options.
The Global Realty Group's investment experts offer up-to-date knowledge and professional assistance for those considering real estate investments.
Several factors influence the success of a real estate investment, but strategic planning can help minimize risks. Before purchasing a property, consulting a professional is advisable to uncover hidden renovation requirements.
Investors should also consider working with a knowledgeable real estate agency or developer. While some may perceive this as an added cost, it can save both time and money in the long run. Experienced professionals can assist not only with administrative tasks related to buying and selling but also with developing effective marketing strategies to maximize investment returns.
Overall, real estate remains a stable and profitable investment option for those who plan carefully and make informed decisions.
English (UK)
Magyar
Русский
中文(简体)
