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WE
HAVE A SOLUTION FOR EVERYONE!
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LOW BUDGET RENOVATIONS
- MODERATE BUDGET RENOVATIONS
- LUX RENOVATIONS |
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Office:
1052 Budapest,
Feherhajo 12-14
Tel: +36-1-4111-651
Fax: +36-1-4111-649
Mob: +36-20-33-44-294
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Why
Renovate? |
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Once
a target property has been acquired, a great majority of
the owners decide to proceed with renovation. But why? The
following is a list of the reasons why renovation makes
sense.
Reasons
for renovation:
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1)
PROPERTY CAN BE RESOLD AT HIGHER VALUE
Owners who are in the market to acquire and immediately
(or within short time) resell apartment properties can gain
a substantial increase in the capital gains on the property
just by renovation alone. Interior renovation of a flat
is the single most important action an owner can take to
increase the resale value as opposed to just waiting for
other 'external' factors, such as a general rise in pricing,
district improvement, and external (facade) building renovation.
The sale prices of renovated apartments in Budapest today
are substantially higher than those for non-renovated properties,
and this difference is especially significant for run-down
apartments. In some cases, the difference in sale price
before and after renovation can exceed 50 percent! As a
general rule of thumb, you can expect the value of your
property to appreciate by approximately 20-25 percent virtually
immediately after the completion of work.
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2)
INCREASING THE LIKELIHOOD OF FINDING TENANTS FOR RENTAL PROPERTIES
Renovating a property for rental purposes is a wise investment
since it increases the likelihood of finding a suitable tenant
and reduces the time that property is off-market and not generating
rental income.
Presently, the local residential rental market can be divided
into 3 categories: locals, students, and expatriates.
Locals, or Hungarian families consisting of single couples
are usually in search of smaller apartments around 50-60
sqm in the greener parts of Pest, such as district XIV or
XIII, or in the neighborhoods of Buda. The rental income
from such flats is medium at best, especially at present
time of widespread of highly attractive mortgage loans for
Hungarian citizens and families. As the rule of thumb, rental
rates for this category stand around 1,000-1,100 HUF per
sq./per month.
Students, which include both foreign and Hungarian students
usually band together and rent large flats in the city center.
A common scenario has 3-4 students living in one large apartment
of about 100-120 sqm. Such flats usually have 3-4 separate
rooms and a separate bathroom or toilets; however, not every
flat can be utilized for this purpose therefore such considerations
should be taken into consideration prior to acquisition
of the property. Renting to students is an option that currently
used by many foreign investors since these properties can
be rented relatively easily providing good yields with an
approximate 10 year pay back period. The demand for these
properties is constant, as there are tens of thousands of
Hungarian and foreign students studying in Budapest at the
various universities.
As a rule of thumb, rental rates for this category range
around 1,300 to 1,600 HUF per sqm/per month.
The third category, the Expatriates include businessmen,
diplomats, and many other foreigners and their families.
Such individuals and families rent large apartments in the
center of the city or in nice parts of Buda, as well as
houses on the Buda side. The demand from this category is
expected in increase in the near future, as large multinational
companies such as GE, UDV, and Microsoft are establishing
their regional and even European headquarters in Budapest.
As a rule of thumb, rental rates for this category can range
anywhere from around 2,000 HUF to 6000 HUF per sqm/per month.
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3)
INCREASING THE RENTAL PRICE OF THE PROPERTY
A renovated apartment will attract a higher class of tenants
increasing the amount of rental income received from the
property. The better the quality of the renovation, the
better the image it will portray and the more income it
will generate sometimes as much as 30-40 percent more in
any given category discussed above.
We
at New Budapest can assist you with your rental income planning,
by concentrating on the proper utilization of your renovation
dollar. We perform renovations for any given rental category,
customizing the renovation process to your budget.
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4) PROPERTY CAN BE USED AS A RESIDENCE
The majority of the older type apartments in Budapest today
are not up to the standards of North America or Western
Europe. These apartments have not been renovated for decades
and have old-fashioned, malfunctioning electrical, heating,
and plumbing systems with a significant number lacking telephone
lines. Such conditions make the flat unusable and indicate
a clear need for renovation.
The
complete renovation solution provided by New Budapest can
transform such property into a Western style residence with
all the modern amenities right in the heart of beautiful
Budapest!
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5) GOOD INVESTMENT PRACTICE
Renovating a property that has been recently purchased is
not only a necessity, but is also is good
investment practice. Renovated properties can be sold quicker
and easier and for a higher sale price, making them more
liquid investment, which can be a determining factor of
good sale in the times of real estate market boom.
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