Rental Yields in Budapest

Good news! Residential rental yields in Budapest move sharply up!

Gross rental yields in Buda (fall, 2009)

BUDA - Apartments	€ COST TO BUY	€ MONTHLY RENT	YIELD	€ / m² COST TO BUY	€ / m² MONTHLY RENT
50 m²	78,700	427	6.50%	1,574	8.53
85 m²	143,990	981	8.17%	1,694	11.54
120 m²	257,160	1,532	7.15%	2,143	12.77
200 m²	461,600	2,618	6.81%	2,308	13.09

Districts researched: Buda districts I, II, III, XI, and XII
Source: Global Property Guide

Gross rental yields in Pest (fall, 2009)

PEST - Apartments	€ COST TO BUY	€ MONTHLY RENT	YIELD	€ / m² COST TO BUY	€ / m² MONTHLY RENT
50 m²	82,950	479	6.93%	1,659	9.58
85 m²	130,985	826	7.57%	1,541	9.72
120 m²	201,960	1,366	8.11%	1,683	11.38

Districts researched: Central Pest districts V and VI
Source: Global Property Guide

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Gross rental yields in Pest for the high-end apartments now average 7.54%, and their yields have increased by almost 2% from the previous year.

Gross rental yields for a similar category in Buda average a lower 7.16%, but again have increased by 1.59% on GPG’s 2008 estimates.

This is very positive news, suggesting that value is returning to at least some real estate markets, after the recent turmoil.

Quality is a must!

Rental yields for more typical, good but not especially high-end central Pest apartments average 5.6%, while Buda yields tail slightly behind at 5.57%. The Buda side of Budapest is becoming a favorite of longer-term investors.

Residential rental return of 6% and above is still considered good. A guaranteed rental return simply does not exist!

Good location and quality unproblematic renovated apartment is a must! Low quality, superficial refurbishment is no longer good enough!

The supply of quality units is extremely limited. New build apartments are in large supply (but often poor quality at questionable locations), and owners are typically having to reduce rents.

Apartments tenants look for

Tenants are likely to be either wealthy Hungarians or foreign professionals / students, of which there are approximately 150,000 in Budapest. Tenants demand a luxury specification, with a high standard of renovation and furnishing, including flat TVs, leather sofas and thoughtful interior design.

There is a lack of well-designed, well-furnished apartments in the city and premium-quality apartments tend to attract premium rents. Tenants in Budapest have grown to have high standards, and throwing in a few mismatched pieces of furniture, even from Ikea, is no longer good enough to attract a tenant. More and more investors of more keenly-priced classic properties are renovating their apartments to a standard that exceeds that of standard new-builds with designer tiling, suspended ceilings and Philippe Stark bathroom fittings, hoping to attract the more discerning tenant.

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Other Posts about Buying Real Estate in Hungary:

• Location: Where to Live with a Family in Budapest
• Location: Where to Buy Investment Residential Property in Budapest
• Rental Yields in Budapest
• Expenses When Purchasing
• Buying for the Right Price

Back to Buying in Budapest »