City-Lets Chief Executive Alex Markus shares seven practical tips for buyers and investors who want to make better long-term property decisions.
Over nearly two decades, Markus has built City-Lets Ltd. into one of Budapest's leading property management companies and a major presence in the capital's real estate market.
Here are his seven rules for buying property.
Think Long Term
There is an old saying in property that the best time to buy was 20 years ago. The next best time is today.
Property shouldn't be approached in the same way as the stock market. Shares can be bought and sold quickly, while buying property is normally a much longer-term commitment.
“As an investor, I would generally look at a minimum of five years and preferably 10,” says Markus.
Stick With What You Know
There is always plenty of commentary about the best places to invest in property, and it is easy to be swayed by talk about markets such as Dubai or Croatia.
“My advice is to stick mainly with areas you are familiar with and understand well,” says Markus.
“If you're based in Budapest, you don't necessarily need to go to Debrecen to find a good investment. There are plenty of opportunities in Budapest.
“And if you're based in Debrecen and know that market, you have Debrecen and the wider Hajdú-Bihar County to look at.”
Use the Tools and Help Available
The property market has changed a lot since City-Lets started nearly two decades ago. Buyers now have far more information and technology available to help them research a property before committing to it.
“Do your homework and use the technology that's available,” says Markus.
“In Hungary, you can obtain the official tulajdoni lap to check the registered ownership and whether there are mortgages, rights or other entries attached to the property. Ingatlan.com can help you research comparable properties and local asking prices.
“Virtual tours and detailed online floorplans can also tell you much more about a property before you visit it. This is particularly useful for foreign buyers looking at Budapest property from abroad.
“Technology doesn't replace professional experience. Some buyers use a buyer's agent or another experienced property professional to help them find the right property and negotiate the purchase. That can make a lot of sense.”
Find Out What Properties Really Sold For
Use Ingatlan.com to research comparable properties, but remember that you're looking at asking prices.
“Speak to experienced local estate agents and find out what similar properties actually sold for, how long they took to sell and what the original asking price was,” says Markus.
“An asking price tells you what a seller wants. The actual selling price tells you what somebody was prepared to pay.”
Know What You Can Afford
Work out what you can comfortably afford before you start negotiating and don't go beyond that limit.
“There is nothing enjoyable about buying a property and then spending every month worrying about whether you can afford the mortgage payment.
“Know what you can afford before you buy. You could be living with that financial commitment for years.”
Don't Lose the Right Property Over HUF 3 Million
Being careful with your budget is important, but don't become so focused on the final part of the negotiation that you lose the right property.
Imagine the seller wants HUF 125 million and you've offered HUF 122 million.
“If the property makes sense to you at HUF 122 million, ask yourself whether it suddenly stops making sense at HUF 125 million.
“If you really like the property, it meets your requirements, has good natural light, is in a good location and has reasonable long-term prospects, don't overthink the final few per cent.”
If You Like the Property, Tell the Agent
You don't need to tell an estate agent every last forint you're prepared to spend, but if you're genuinely interested in a property, make that clear.
“We've seen buyers find a property they really like but deliberately avoid showing too much interest. They come back later and discover it has already been sold.
“When you ask why they didn't tell the agent they were interested, the answer is often that they didn't want to give too much away.
“Being too secretive can work against you. Be open about your interest without revealing your maximum budget, and you'll quickly get a sense of which agents are being honest, transparent and realistic with you.”