5 tips for buying your first investment property

17 April 2019

Thinking of buying your first investment property? Here are some tips on how to turn your investment idea into a smart move.

1. Do your research.
Whether you target on short-term or long-term lease, you need to do proper research before buying your first investment properties. Budapest is a well-known “city of students”, this means, there is no shortage in long-term tenants here. Historical sites along with international business and entertainment events make this city attractive to thousands of visitors, who are, in fact, your potential short-term guests.

2. Be aware of short-term restrictions.
With the increase of popularity of such companies as Airbnb, some cities have made it difficult to enter the short-term lease market. However, knowing the local laws and regulations will help you choose the right district and make your plan possible.

3. Select a low-cost home as your first investment property.
It is always a good idea “to give it a try”. Even if you are ready to invest up to a million dollars in your first investment property, we won’t suggest to put all eggs in one basket. Current real estate market in Budapest offers various options for investment starting from around €120.000. Keep in mind, you will need to have your budget for renovations and design before renting or selling it.

4. Keep in mind your Return on Investment
Invest in a district that will show you a satisfactory return on investment. A return between 6% and 7% is a good deal. You can find such deals in areas which are expanding or close to universities, train/bus stations and business areas. In order to obtain the highest ROI, you will have to get to know the districts closer.

5. Be picky in choosing your partner.
First-time investors are often scared of being scammed or ending up with unprofessional services. When buying a property, you may face dozens of pitfalls such as peculiar municipal district laws, language barriers, foreign tax system, reconstruction rules and regulations, and many more. An experienced and trusted local real estate agent saves you time and money, while a property management company cares about your property should you be choosing to run your business remotely.

by Dina Iarenchuk / Product Manager