Would you buy a car without driving it first? Or drop a pin on a map and book a trip to wherever it lands, no questions asked? Some people would!
For those who are more diligent:
Purchasing property generally requires a similar level of planning and due diligence — a great real estate investment return comes from understanding both location and market in excruciating detail.
We’re here to help.
We make sure you are familiar with Budapest, know what to expect and what not to expect from each neighborhood, and understand the local purchase process.
We believe these are the details that make the difference between hundreds versus thousands in revenue.
Your money may be burning a hole in your pocket, ready to invest in a great property in Budapest. Or you may be scouting out the terrain, seeing if the local real estate market is right for you.
Wherever you are in the process, this guide takes you through the steps of a template purchase in Budapest’s real estate market. Start with getting to know the city, and finish with sealing the deal.
Skip ahead to the purchase steps here.
Over the last decade Budapest has become a rising star, increasingly popular with tourists, celebrities and real estate investors alike.
The central Eastern European capital has invested billions in rejuvenation. It’s polished off its 19th century palaces and boulevards whilst growing an eclectic contemporary culture.
The city is peaceful, beautiful and centrally located. And for investors, favorable property prices have led to a rapidly growing real estate market. You can still expect a low barrier to entry and high returns of up to 8% in the most desirable neighborhoods.
Take a look at our detailed overview of Budapest’s real estate scene, and architectural and cultural highlights here.
Speaking of desirable neighborhoods:
If you’re looking to shop the most popular districts, you’ll want to get to know the V., VI., and VII. well.
Budapest’s three most popular districts for visitors all converge downtown.
This is where you’ll find the city’s most well-known sites. A unique bar life and growing gastro scene also lives here. From architectural heritage to spacious parks and delicious meals, these neighborhoods have it all.
Read about each district in detail in our neighborhood guides: Fifth District, Sixth District, Seventh District.
Your end goals define your property needs. Identify them so that you or a real estate agent can find the right property that much faster.
If you are looking to buy a home or second home for you and your family, you may be searching for larger, one-family properties in a more residential area.
Alternatively, a mid-sized flat in a quiet and approachable street downtown could be perfect if it’s a getaway for two that you’re after.
It may be that you’re a property investor buying to let on short term. Important factors include a location that’s popular and convenient for tourists and smaller square meterage.
Those buying to let long term should understand the desirable locations for tenants to live, and secure a property that covers all of the basic necessities for an apartment.
Finally: apartment flippers. Research is essential to predicting which properties and locations can expect a rise in valuation over a short period of time.
Location, location, location is an oft-quoted real estate cliche. And it’s not just because it’s easy or fun to say.
Really understanding a location of an investment property will help you find great properties for sale, determine what is a fair price for it, forecast the expected return on investment, and more.
A short-term rent studio on Andrassy Avenue may earn you more than a three-bedroom flat in the IX. District in the long run — simply because of where it’s located, and how you can market and price it.
These are just a few points where a local, knowledgeable guide can make investors thousands.
A good guide will have a thorough understanding of the city layout, and a solid understanding of the price points of nearby properties and sales. A great guide will know the owner of the listing as well, and work with you to negotiate the best price of purchase.
Once you’ve secured a good location and hopefully a great guide, you’ll need one last thing — a real estate lawyer worth their salt.
Being picky in every sense of the matter pays off. A bad lawyer can ruin a good deal.
Make sure to hire legal counsel that is well-versed in real estate law, speaks English fluently, and thinks creatively — someone who understands the rules and can also think outside of the box.
A template real estate purchase process with a Matthew and Daniels agent goes like this:
First, you’ll tour the apartments with us based on your investment goals and budget.
When we’ve found the perfect place, you’ll give the seller a verbal offer. Then, you’ll meet with our lawyer — their legal counsel will represent your rights, prepare the legal contract and organize purchase permissions for non-EU citizens.
Next up, you sign a written purchase offer.
This will detail:
Final signing date
At this point, you should leave at least 500.000HUF (approximately 2,000USD), or 1% of the purchase price as a reservation deposit, which you can hold without interest in your Hungarian lawyer’s escrow account.
At this time, we will price negotiate with the owner on your behalf. The seller will send a signed acceptance document, including their counter-offer.
Now, your lawyer prepares the purchase contract draft together with you – in Hungary the buyer’s lawyer prepares the contract. You sign the purchase contract, or leave a Power of Attorney at your lawyer’s office permitting them to sign the document on your behalf.
10-30% of the purchase price will be paid as a downpayment as soon as you sign the purchase contract. If you’re a non-EU citizen and plan to leave, we’ll remind you to go to the notary with your passport to get it verified.
Your lawyer can now request a purchase permit for you from the Hungarian government, so that you can get the ownership rights of your property.
Once you’ve received the permit, you’re able to complete the full purchase and proceed to get the ownership right from the Hungarian Land Registry Center.
For more information about costs and fees associated with process purchase for each buying model, read our guide here.
The purchase process for non-EU citizens is identical to that of EU citizens, save two factors. Non-EU citizens need purchase permission, and are subject to more strict mortgage conditions.
In the real estate market, diligent planning and local expertise translates into tangible profit.
We’re committed to publishing the most current information available for you about the Budapest real estate market, at any given moment.
Find the latest updates and data here on our blog, or speak to a local expert to take a deep dive into Budapest’s property scene.