Budapest Apartment advice

S

Sceptic

Guest
Hello all. I urgently require advice on a property that I bought in the Madach Gardens in District VII. Its a one bedroomed apartment that I paid over €2,200 sq/m for (I know Eddie Hobbs I was rash) nearly 3 years ago. I must come up with the remainding 60% by the end of March to close the deal or get my original money back minus legal fees from the developer. Whats the best course of action? Cut and run at a small loss or spend more and speculate and try to rent it out?
 
Hi Sceptic,

€2,200/sqm isn't too bad for that development. It is one of the best in the city and should rent well. I don't usually recommend new build/restoration projects but Madach Gardens/Gozsdu Udvar looks interesting. You might be able to get up to 65% of the value as a Hungarian mortgage and rental prospects are €550-€600 per month for a one bed apartment according to Autoker's letting section.
 
Thanks Budapest,

I still reckon I paid over the odds but I'm wondering what kind of money a one bed appart at 52.5 sq/m on the third floor of the Madach Gardens would make if I was to sell on the open market. Or would you reckon there would be a good chance of renting it at > €500 p. month to someone or simply would you cut your losses and run. I'm really indecisicive at the moment. Any advice would be appreciated
 
€2,200 seems to be overpaid at that time. 3 years ago, prices were lower in Madach Garden. But you are now in better position even if it is not a good time to sell in Budapest. Keep it and get a good return, anyway. It is possible without any difficulties if the apartment is in good and professional hand. 6-8% yield is achivable if interior design and living standards are satisfying higher needs.

Any advice plesea contact me!

Best of luck
 
€2,200 seems to be overpaid at that time. 3 years ago, purchasing price was lower in Madach Garden around at 1,600-1,800. But you are now in better position even if it is not a good time to sell in Budapest. Keep it and get a good return, anyway. It is possible without any difficulties if the apartment is in good and professional hand. 6-8% yield is achivable if interior design and living standards are satisfying higher needs.

Any advice plesea contact me!

Best of luck
 
Madach was one of the best offerings to come to the Irish market through the mainstream agencies, and will do very well for investors. Best thing to do with it is to hold it for a year or two untl the glut of "flippers" has cleared. Properties in ths development will be much sought after. Y.ou did ok. I had a look at the site a few days ago as I passed it, standard of work looks very good. However it looks to be well behind time, will run right up to the April deadline if not beyond I would say. As far as I know there is a stiff penalty on the developers if it goes beyond that, about 600 euro/month for average apt as far as I can recall.
 
Septic I bought there also, did you get notification of the whole thing being an apart hotel recently as I did?
 
Probably you mean that Autoker, the builder, has started dealing with property management. As a result they try to offer apartments for rent in Gozsdu. I suggest you focus on long-term renting potentials instead.
 
Hungary said:
Probably you mean that Autoker, the builder, has started dealing with property management. As a result they try to offer apartments for rent in Gozsdu. I suggest you focus on long-term renting potentials instead.
Click to expand...

Its not Autoker, they haven't shown their hand yet. Its Mr Yom-Tov, the original owner of the development who sold out to Autoker as I recall. I spoke to somebody who got a circular from him offering to manage the apartment as part of a hotel type complex, but he is just flying a kite as far as I can see, probably to make a pitch for supplying some very expensive furniture of the standard that his hotel will require!

I advised the buyer to do as you did, to sit tight and not commit to anyone just yet. The site has great long-term rental potential, it is literally right in the centre of the city, and the area has been cleaned up beyond all recognition in the couple of years since this project kicked off.
 
Hotel business is a new segment in residential property in Budapest. City Home, district 6, also provides apartment for rent both short and long term through the builder. I do not say this cannot be a good land for making money but rent in City Home, for instance, is very far from real achiveable rent. They use 5 stars hotels' price system and it could happened the same in Gozsdu Court. Central location, nice amenities, outstanding condition, all in all, it can be a competitive opition for tourits who intend to stay in downtown.

Yet, long term rental looks a good way of maximising benefits from property investment.
 
To Kerinsp,

Yes I got that letter too. I suppose being the sceptic that i am I thought it a bit of a scam and didn't take it seriously. However in retrospect if he is telling the truth, there may be grounds for making good returns. However I'd imagine that a long term renter would be more secure with a consistent income. Did you respond?
 
I'm told that Madach is a long term investment. Have you talked to estate agents on the ground in Budapest in District VII as regards monthly rent?
 
Expected monthly rent in Gozsdu/Madach cannot be fixed in advance. But I suggest you maximise your potential rental income from your investment. If you had a nice and modern furnished apartment with high standard kitchen, AC, balcony, a car park 800 Euro would be achiveable for one bed apartment. High living standards and modern interior needs to be achived. Otherwise, lower rent and difficulties in renting are expected. Normal stanard apartment with low level of interior design in old fashion must be oversupplied.

Higher return needs higher investment in fitout, for instance.
 
Can anybody fax me Mr. Yom-Tov's letter? I have bought two apartments in Gozsdu Udvar and am interested in all the rental options, but have not heard from him yet. I would like to do some advance research.
 
sceptic, madach seem tobe well priced today, if you look at fadesa project which is close by and was sold for more then 2,600 euro / m2, eszterhaz with 2,200 euro / m2 (and the location is not as good as madach) , I believe in long term investments in and am following this rule with my own portfolio. if you paid 40% you can finance the rest assuming that the rent will cover the mortgage, you may try http://www.fidentiagroup.com (www.fidentiagroup.com) for mortgage advise they seem to be good at that.
I am sceptic that the 1 bed will get you 500 euro / month. there is a lot of supply in the vicinity (kiraly udvar, eszterhaz, madach to name few) and naturaly it will drive rental prices down, unless as I understand there will be an apartment hotel there, which will take a good quantity of properties out of the regular rental market, I can also recomand rental agncies, PM me if you want details
 
With regard to rental or management companies, although I have a couple of names given to me by my Hungarian lawyer, does anyone with property in Madach or in that type of development have actual experience of any particular companies ? I know tenant finder rates and general maintenance percentages tend to be pretty standard, but rather than sticking a pin in the Budapest yellow pages, I'm looking for actual recomm. based on experience etc. Appreciate any assistance anyone can offer.
 
Hi Jrar,

I was in a similar position to you, looking for a rental and management company to deal with my new-build apartment. The property is in District XIII. Have you considered using BPartner (www.bpartner.hu)? My dealings with them are at an early stage, but to date I have found them to be very efficient, well-motivated, and knowledgeable. Feel free to PM me if you need any more information.
 
Lots of interest in the market now regarding Madach, now that it is nearing completion. I was there two days ago however and I don't believe that Autoker can possibly finish it in time for the deadline. I would say that they will try to complete it to a stage that just fulfils their legal obligation ahead of completion date, but the project will be far from finished. Look out for lots of arguments between lawyers! I know that Mr. Peter Biro represents many of the Irish buyers, and he is reputed to be like a dog with a bone when it comes to his clients' interests, so fun times ahead!

I have consistently said that Madach will be a cracking project, and looking at it last week I see no reason to change my mind. It is a classy development, with pretty much the very best location in the city, and it will do well for anyone who sits out the current flat patch in the market. If you own an apartment there you would be best advised to hold it rather than sell it at this stage. Also, I certainly wouldn't jump at any of the fit-out offerings currently being touted by either Mr Yom-Tov or any of the agencies (did I hear correctly that Duna House are putting together an offer -- maybe some of the buyers can enlighten us?). I have no doubt that Autoker themselves will offer a furniture package, and there may be others, so sitting on the hands is the best course of action right now.

Overall though, this is a nice project, and I look forward to seeing it finished. It will make a huge difference to this part of the 7th district, and when the Spaniards have finished building across the street the place will be very attractive and desirable for residents and investors.
 
auto320, good to hear someone on the ground there making such positive observations. I was last there in May last year so things have moved on a lot on Madach in the meantime. Peter Biro represents me and I have to say to date, my dealings with him and his office have been excellent.

I take your point re: sitting tight re: mgmt. company option and fusrnishing choices just now, but my concern would be having someone in place to do a proper snagging exercise prior to handing over the final payment etc. If I thought Mr. Biro would taje the approach that you have heard him known for, then I'd agree that doing nothing would be the best course of action right now.
 
You must log in or register to reply here.
Back
Top