Anyone familiar with the conditions on the German rental market may find it hard to believe, but in Budapest a good 10-15% of all apartments in the city center are EMPTY. These are not reliable figures, but they have been confirmed to me by various sources and are in line with my personal impressions.
On the other hand, there is a glaring shortage of student accommodation in Budapest, which the city believes will worsen in the coming years because the necessary new construction projects are not being carried out. This is exactly where our project comes in:
Conversion of vacant dream apartment
in an exclusive student flat share in Budapest
The project I am presenting today is not a purchase, but simply a conversion of a beautiful, but mostly vacant apartment in a prime location into a year-round rented student flat share. We were able to convince the owners that they were tapping into a good source of income with student-oriented furnishings, and that we would find tenants for them who would value such an apartment and treat it well.
This is exactly what we have now completed and I think it was worth it 🙂
Why don’t the owners want to let?
There are many reasons for the high vacancy rate:
1) Among other things, the apartments have been in the family for decades, but the owners live in the country or have even lived abroad for a long time. They only want to sell the hidden reserve in an emergency, and since the fixed costs (aka housing benefit) are so low, keeping an empty apartment rarely costs them more than 100 euros a month.
2) Whether rented or not, the value of your apartment has doubled in the last 10 years alone. The property is therefore only sold in return for the purchase of another property.
You have to come up with the idea of selling an apartment in Budapest to put the money into Wirecard shares 😀
2) You have to invest in most apartments to make them rentable. Money that many of these owners do not have or do not want to spend. They don’t believe it could be worth it, because:
3) The usual long-term rent is very low – in contrast to the rent for fixed-term contracts, which are mainly concluded with foreigners. Whether you rent for less than 5 euros/sqm or get 10-15 euros makes a huge difference.
4) In addition, there are many fears: how will the tenants treat the apartment, how secure is the receipt of money, how can I end the tenancy if the apartment is to be sold after all, and much more.
5) Last but not least: a lack of language skills is also an obstacle. The owners had no English at school and certainly had no desire to negotiate with foreign-language tenants.
How our model solves these problems
Our model solves all these points because everything is interconnected:
– Fixed-term contracts provide more control over the condition of the apartment. It can’t happen that you only realize after 3 years what the tenants are doing.
– As we rent out a shared flat, we send a cleaning team to the communal areas every two weeks. We see this as a service, but also as investment protection. It’s better than insurance, because here we notice problems before they become serious.
– the higher rent is justified by the special location (in this case: pretty much directly on Margaret Island) and facilities. It attracts a group of tenants who are obviously more mindful by nature. Since we also focus on medical students from Germany, we have only good things to report so far, also with regard to payment reliability.
– We take care of the administration and tenant contact.
Is a student flat share worthwhile as an investment?
If you are interested in such a project and you can imagine realizing something like this with us, please contact us and we meet online or here on site.