Planning on purchasing a flat? If you make the right moves, you can hit big bucks – Part one

Last year saw a record amount of investment purchases: many are still looking for means to invest their money on the housing market. However, they’re not only counting with long-term leasing, the number of purchases realised with the intention to lease housing short-term has escalated as well.

In the latter category, the amount of achievable return is higher indeed, but this also heavily depends on the location. At more favourable places, the possible achievable return around 4% in case of long-term leasing can be amped up to 7% in the case of flat hotels – however, in a less successful season, or at a less frequented spot, this can drop below 4.5%, which doesn’t even provide the necessary labour costs for the owners themselves. We tried to research the amount of returns investors can actually hope for, and the best locations to buy properties to lease at. Part one.

Last year saw a record amount of investment purchases: many were looking for means to invest their money on the housing market. The number of investors has slightly decreased this year amongst buyers, but still, many of them buy housing with the intention of putting them up for rent. They don’t only aim to profit from long-term leasing: the amount of transactions realised involving properties that are intended to be leased short-term, as flat hotels, has escalated also.

Because of the unexpected boom, the scale of one-night accommodation fees has dropped, while the bigger competition has also worsened occupancy rates. Seeing the decrease in return rates as well, many began to consider long-term leasing a better opportunity again. We tried to research the amount of returns investors can actually hope for, and the best locations to buy properties to lease at.

What’s the best location to buy housing at?

The ratio of achievable income and prices shows significant differences depending on location and the type of the property. Thus, when deciding about a purchase, the buyers has to have an established concept about pricing, rentals, possible incomes and the provisional fluctuations in prices. Meaning that it’s not rentable to buy a property with prospects of very high rentals and fees if the property itself is pricy as well.

The location of our future housing is heavily determined by the type of lease we want to make: short-term or long-term. If short-term is our pick, it’s definitely more worthy to buy housing in the districts and areas preferred by tourists, where estates can be leased at a high occupancy rate. In this respect, the city centre is the best choice, namely the districts V., VI. and VII. and district IX.’s certain zones that are closer to the centre, also Inner Buda. However, it’s also useful to monitor the occupancy rates of the available accommodations nearby, as even adjacent streets can show a very different picture.

In case of long-term leasing, the range of possible locations is a bit more ample – the downtown areas are always a good choice, but depending on your target group, it could be worthy to check out other, less frequented districts. Besides the city centre, districts XIII., XI., XIV., IX. and Buda are also popular locations. It’s important to note that university students and families who are looking for housing to rent for a long time are searching for different types of estates entirely. Students mostly look for housing that are close to their alma mater, so their optimal locations are areas that include or are close to a university campus or building.

The next part of the article will be about the preferred locations of younfg adults and families to rent at, and will also include the pros and cons of long-time and short-time leasing.

(Source: http://www.portfolio.hu)