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Real Estate Development near Budapest. Please advise.

Real Estate Development near Budapest. Please advise.

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Old Dec 22nd 2017, 10:14 am
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Default Real Estate Development near Budapest. Please advise.

Hi. So I was in Budapest just last month. Loved the Public Transportation, the Architecture, The cleanliness and the city in general. So my Hungarian associate sent me a proposal with regards to building a Residential Apartment complex.

Got any insights on the Hungarian Real Estate Market?
Gonna visit next month again to do some research.
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Old Dec 28th 2017, 7:28 pm
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Default Re: Real Estate Development near Budapest. Please advise.

Are you being invited to fund a development?

Budapest prices have risen substantially in the last couple of years - obviously that situation will not last for ever.

We have a general election next year.
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Old Dec 29th 2017, 4:36 am
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Default Re: Real Estate Development near Budapest. Please advise.

Even in rural parts prices seem to be rising. Some of the prices for Tanyas round our village have made me stop and wonder. IN the last few years prices in and around Budapest have shot up considerably and this is quite probably unsustainable for the obvious reason wages haven't really gone up in the same way.

I would still be dubious about property as an investment in Hungary.
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Old Dec 29th 2017, 10:44 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by The Developer View Post
Got any insights on the Hungarian Real Estate Market?
Yes. Leave it to the professionals. Seriously.
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Old Dec 29th 2017, 11:31 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by Expatrick View Post
Are you being invited to fund a development?

Budapest prices have risen substantially in the last couple of years - obviously that situation will not last for ever.

We have a general election next year.
Yes. So I’m a Real Estate Developer already and I was looking to expand my business overseas. Hungary made most sense considering I already have an associate there, relatively easy visa rules and lower taxes. Also proximity to my country of origin.

So there’s 2 ways to get started. The first would be to buy foreclosures from auction, renovate a little and sell. The second would be, which I currently do in my home country, to build small residential accommodations.

So my Hungarian associate insists on the second route but the problem with that is A) There isn’t really a lot low investment options for building small accommodations. For example, the least expensive option offered to me by my Hungarian associate was a small residential complex a little farther from Budapest (15-20 mind by underground) was around $400k-$500k. Sure you could get financing after investing the first $200k but that’s still a lot of risk and a lot investment. B) Shortage of labour.

I was looking at an investment of around a hundred thousand dollars with relatively low risk. At least until I know the market personally. But that is not to say I’m not interested in the second option at all. So let me know what you think.
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Old Dec 29th 2017, 11:41 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by jetsam1 View Post
Even in rural parts prices seem to be rising. Some of the prices for Tanyas round our village have made me stop and wonder. IN the last few years prices in and around Budapest have shot up considerably and this is quite probably unsustainable for the obvious reason wages haven't really gone up in the same way.

I would still be dubious about property as an investment in Hungary.
Do you think the Chinese and other foreign investors may have something to do with it? I don’t think the wages may have a lot to do with the Real Estate market. I mean, wages in my country are almost half of that in Hungary but the Real Estate prices are almost the same. Besides, I was ready some articles on the Hungarian Economy the other night and one article read the wages in Hungary were set to grow in 2018 and in a separate article it read the consumer spending has been up compared to last year and that the forecast for GDP growth was 2%. Higher than the EU average. Apparently the Hungarian economy seems to be doing good.
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Old Dec 29th 2017, 11:44 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by Watchpost View Post
Yes. Leave it to the professionals. Seriously.
Of course, I’ll consult the professionals too. This is just something to be better prepared for when I’m in Hungary again. Let me know if you know of any English speaking Real Estate consultants, brokers or Developers.
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Old Dec 29th 2017, 2:07 pm
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by The Developer View Post
Yes. So I’m a Real Estate Developer already and I was looking to expand my business overseas. Hungary made most sense considering I already have an associate there, relatively easy visa rules and lower taxes. Also proximity to my country of origin.

So there’s 2 ways to get started. The first would be to buy foreclosures from auction, renovate a little and sell. The second would be, which I currently do in my home country, to build small residential accommodations.

So my Hungarian associate insists on the second route but the problem with that is A) There isn’t really a lot low investment options for building small accommodations. For example, the least expensive option offered to me by my Hungarian associate was a small residential complex a little farther from Budapest (15-20 mind by underground) was around $400k-$500k. Sure you could get financing after investing the first $200k but that’s still a lot of risk and a lot investment. B) Shortage of labour.

I was looking at an investment of around a hundred thousand dollars with relatively low risk. At least until I know the market personally. But that is not to say I’m not interested in the second option at all. So let me know what you think.
I am sure you know the old adage "Never invest (gamble) more than you can afford to lose'!

As regards the scheme you mention you said 15-20 mins by underground. Did you mean underground (as in Metro) or suburban train (HEV), could make a difference in terms of the suitability of location. Any way, as you say, that sounds like an ambitious project, with considerable risk!

I don't know if this is valid but I have a hunch that you might consider renovating houses within the city. For example I live in District 2 in Buda and if I were to walk around for an hour or 2 I reckon I could identify several houses that need renovation & / or conversion that you might acquire at a reasonable price.

Having said that I am sure your Hungarian associate knows more about this than I do.

Final note, as already suggested, don't count on the housing boom continuing, I have a feeling you might have missed the boat on this one.
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Old Dec 29th 2017, 2:33 pm
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Default Re: Real Estate Development near Budapest. Please advise.

Good luck to you if you want to try this, personally I would not invest a single cent in Hungarian property.
As has been said many many times here before Hungary is somewhere to commit to living - it is not an investment.
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Old Dec 30th 2017, 7:34 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by duztee View Post
Good luck to you if you want to try this, personally I would not invest a single cent in Hungarian property.
As has been said many many times here before Hungary is somewhere to commit to living - it is not an investment.
I 110% agree with Duztee. To be honest I don't feel comfortable you have asked Brits who have lived in or known Hungary for much longer than yourself about investing and profiting from property development. I personally think you should do research outside this forum. What are we ourselves going to gain from any profits you make? Zilch!
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Old Dec 30th 2017, 7:44 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by FenTiger View Post
I 110% agree with Duztee. To be honest I don't feel comfortable you have asked Brits who have lived in or known Hungary for much longer than yourself about investing and profiting from property development. I personally think you should do research outside this forum. What are we ourselves going to gain from any profits you make? Zilch!
I don't have a problem with somebody not currently in Hungary asking other expats who are in Hungary for any "insights". Nobody has to respond if they're not comfortable and the OP has received some advice - which he may or may not take note of, his decision. The bottom line here is not so much his "profit" but the likelihood of his entering into a disastrous arrangement.
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Old Dec 30th 2017, 8:03 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by Expatrick View Post
The bottom line here is not so much his "profit" but the likelihood of his entering into a disastrous arrangement.
When potentially The Developer could come back here, upset that it was the advice / suggestions gained here that persuaded him(her) to enter the deal in the first place.

Another point to make is that the Hungarian legal system for civil issues is IMO not fit for purpose. Even simple cases can take years and even if you win then costs are often only partially awarded if at all.
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Old Dec 30th 2017, 8:08 am
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Default Re: Real Estate Development near Budapest. Please advise.

When potentially The Developer could come back here, upset that it was the advice / suggestions gained here that persuaded him(her) to enter the deal in the first place.
Well you could say that about an awful lot of the content on BE.
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Old Dec 30th 2017, 10:34 am
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Default Re: Real Estate Development near Budapest. Please advise.

The Developer has asked advice from non-professionals (us), what he does with it is entirely his (her) choice!
I don't have a problem with anyone asking anything as long as they in turn accept that all they are getting is our individual and personal opinions.
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Old Dec 30th 2017, 10:39 am
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Default Re: Real Estate Development near Budapest. Please advise.

Originally Posted by duztee View Post
The Developer has asked advice from non-professionals (us), what he does with it is entirely his (her) choice!
I don't have a problem with anyone asking anything as long as they in turn accept that all they are getting is our individual and personal opinions.
Precisely! And I think the sum of the advice given so far equates to caveat emptor!
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