Choosing a city property is a great way to maximise your investment as well as your rental income.
Whether you fancy a city pad for weekend breaks, a long-term rental property for local residents or a place to let out for holidays, cities are a great option to consider.
Paris
Thanks to Eurostar and direct flights, Paris is within easy reach of the UK. Whether you’re interested in moving there yourself, commuting to work from France or want to take advance of the huge demand for rental accommodation in the city, Paris is a good bet.
“Paris is still very short of accommodation, so the buy-to-let market is healthy. Long-term domestic lets and holiday lettings are good investments,” says Marie-Pierre Saint-Martin, from London Paris Dream Home. “Holiday lets are particularly interesting for investors with a larger budget, who want to occasionally use the apartment for themselves.”
Marion Schlumberger, from Paris M2, says, “The Paris rental market is very strong. A 25m2 apartment in the 10th or 11th arrondissement will give a rent of €600-€650 per month. If it’s let as a short term holiday rental, you can expect about €1000. This works out as a gross yield of 6.24%.”
What to buy: A newly renovated 3rd floor apartment in the trendy 11th Arrondissement. The one bedroom apartment has a fully equipped kitchen, walk-in dressing room and modern bathroom. It’s close to all the key amenities and is priced at €325,000.
Contact: Imoinvest, Tel: 0207 845 0700 www.imoinvest.com
Berlin
As the capital of Germany, Berlin has grown to become a cosmopolitan city that attracts large numbers of tourists each year. For the property investor, its appeal also lies in the local rental market, as there’s a constant demand for long-term rents by the domestic market. The current average rental yields are 6%-8%.
“Germany is one of the wealthiest European economies on a per capita basis, but this is not reflected in a developed market. The rate of home ownership is only around 15%,” said Fergal Creed, director of Berlin Capital Investments. “However, this is changing. Strategic investments made over years in re-establishing Berlin as a major city are now paying dividends. We believe this is an excellent time to invest in the Berlin property market, and there is strong demand for both sales and rented accommodation.”
What to buy: A studio, one or two bedroom apartment close to Potzdamer Platz in Berlin. The building was originally built in 1874, but modernised in 2006, and it’s a five-minute walk from the centre of Berlin. The properties include balconies and there’s a lift and video intercom system installed. The 42m2 studio costs €102,960 the one-bedroom apartments start at €144,980 and the two-bedroom apartment costs €396,792.
Contact: Imoinvest International, Tel: 0207 845 0700 www.imoinvest.com
Budapest
Budapest, the capital of Hungary has the strongest rental market in the country. It’s also got one of the most stable economies in Eastern Europe and 60% of commercial activity occurs here. As a city, it’s a very popular place for tourists, helped by the fact that many budget airlines fly here, and both long and short-term lets are in huge demand.
Hungary is hoping to adopt the Euro in 2010, so prices may well rise after that occurs. “The focus for property investors is now on the suburbs,” says Caroline Hollingworth of Hollingworth and Associates. “Property prices are rising at around 15%-20% per annum and are being driven by direct local investment. Rental yields are about 5%-8% and this figure is expected to improve as the areas develop.”
What to buy: A studio, one, two or three bedroom apartment at the five star Holmi Residence, in district 18. Aimed at the local marketplace, and therefore ideal for investors, the development is 1.5km from the main airport and 8km from the centre of Budapest. Holmi Forest, with a park and lake, is just across the road. Prices start at under £38,428.
Contact: Hollingworth and Associates, Tel: 01273 697 437 www.hollingworthassociates.com
See a video tour of the development here - http://www.hollingworthandassociates.com/property_investment_opportunities/hungary/holmi_residence.php
Lisbon
The capital of Portugal is the westernmost capital in mainland Europe and has been member of the EU since 1986. The city is a UN World Heritage Site, so as cities go, you won’t find a deluge of high rise blocks here. Many low cost airlines fly to Lisbon and tourists flock to the area. The demands for short and long-term rental properties are high, yet the cost of buying a property is still half the price of Paris.
“We’ve been getting a lot of interest in Lisbon recently,” said Paul Houston, from Lucas Fox. “We’re seen a lot more visitors and tourist numbers are up. That interest trickles down into property, as people come here and fall in love with it. Plus, prices are competitive compared with other capitals.”
The average prices in the sought-after areas of Lisbon, such as Castelo, Baiza, Chiado, Barrio Alto and Rossio, are between £2,000 and £3,000 per square metre, but you can pick up renovation properties for as little as £1,360 per square metre. If you’re renting on a short term basis to tourists, you can expect to get £385 - £490 per week for a one bedroom apartment. Rental yields for Lisbon are currently about 5%-6%.
What to buy: An apartment in a newly renovated building in the fashionable Chiado district of Lisbon. The ground floor apartment has one bedroom, one bathroom and a stylish open plan living area, with American-style kitchen and dining area. The apartment measures 63m2 and costs €155,000.
Contact: Lucas Fox, Tel: 020 4349 8329 www.lucasfox.com
Bratislava
Bratislava, the capital of Slovakia, is another city where there’s a big demand for property. Many budget airlines fly here, a lot of big name companies, including many car manufacturers, have opened up businesses in the city and property prices are increasing.
“Slovakia is one of the most attractive destinations, with low flat-rate tax of 19% and various incentives for all types of investors,” says Tim Van Dijk, from Obelisk. “Slovakia has considerably reformed its legal system and is now one of the most appealing overseas property investment options in Europe.”
In Bratislava, there’s a huge demand from locals for rental properties and property prices are expected to continue to grow at a rate of 15-20% for the next few years. A new motorway connecting the city with Vienna is due to be completed soon and will significantly improve travel options. According to Arc Property, rental yields for quality apartments in Bratislava are about 5-7%.
What to buy: A studio, one or two bedroom apartment in a brand new development on the border of the 1st district. Only five minutes walk from the Old Town, it’s close to a range of amenities, restaurants and shops. Studio flats are 40m2, one bedroom apartments are 50m2 and two bedroom apartments 86m2. Prices start at £55,035 for a studio and rise to £140,037 for a two bedroom apartment.
Contact: Slovakia Investment Property, Tel: 0207 152 4014 www.slovakiainvestmentproperty.com
