Investing in Budapest or Similar High Growth Foreign Cities

[agentchow]

Hello, I am 24 year old male working a day job as a SWE at a unicorn startup (~330k USD). I have around 300k in liquid capital that and I am looking to diversify my portfolio.

From my research, the US housing market is not nearly as hot as it once was. It is harder to turn a profit than it was a decade prior (especially since I am based in California).

This leads me to my question, how is the efficacy of investing in a foreign city, in my case, specifically Budapest. I have citizenship there and family/friends who can help manage the property., so I will not need a foreign investment license and can circumvent a lot of the overhead bureaucracy. In addition, I travel there yearly to visit family so I would be able to check up on it. Any thoughts or input would be greatly appreciated!

 

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[Roli]

Hello, I am 24 year old male working a day job as a SWE at a unicorn startup (~330k USD). I have around 300k in liquid capital that and I am looking to diversify my portfolio.

From my research, the US housing market is not nearly as hot as it once was. It is harder to turn a profit than it was a decade prior (especially since I am based in California).

This leads me to my question, how is the efficacy of investing in a foreign city, in my case, specifically Budapest. I have citizenship there and family/friends who can help manage the property., so I will not need a foreign investment license and can circumvent a lot of the overhead bureaucracy. In addition, I travel there yearly to visit family so I would be able to check up on it. Any thoughts or input would be greatly appreciated!

Sounds like a question for your family and friends, nothing beats local knowledge.

 

[MTF]

Budapest will most likely also be expensive since it's one of the most popular European cities.

If you want the highest ROI, you'd have to invest in smaller cities with potential OR find a really attractive deal in a desirable and stable neighborhood in Budapest with something unique (like a nice terrace or close to a big park) OR a gentrifying neighborhood (probably the best way to approach this).

 

[Andy Black]

Maybe @biophase has some thoughts.

 

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[ygtrhos]

I have a Hungarian friend from Budapest working in Switzerland and she did exactly this.

I think Airbnb is a very good option monetarily. She is making some money. But you need to run through a lot of bureaucracy and you need to work with agencies that are basically redneckish people who do not know these procedures themselves. They can just do legwork - cleaning, giving the keys etc.

I would not touch this niche though, unless I am Hungarian myself. Hungarians gave me a very pessimistic and aggressive impression. I do not like Budapest that much as well, except the old town.

 

[agentchow]

Thank you all for the responses, I have decided to pull the trigger and buying a house in 150k USD range as a starter to get a feel for the market.

 

[Roli]

Thank you all for the responses, I have decided to pull the trigger and buying a house in 150k USD range as a starter to get a feel for the market.

Cool, let us know how you get on. Good luck.

 

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[ygtrhos]

Cool, let us know how you get on. Good luck.

I second this.

 

[Borderless CLTV]

Hello, I am 24 year old male working a day job as a SWE at a unicorn startup (~330k USD). I have around 300k in liquid capital that and I am looking to diversify my portfolio.

From my research, the US housing market is not nearly as hot as it once was. It is harder to turn a profit than it was a decade prior (especially since I am based in California).

This leads me to my question, how is the efficacy of investing in a foreign city, in my case, specifically Budapest. I have citizenship there and family/friends who can help manage the property., so I will not need a foreign investment license and can circumvent a lot of the overhead bureaucracy. In addition, I travel there yearly to visit family so I would be able to check up on it. Any thoughts or input would be greatly appreciated!

I have a Hungarian friend that does this in a few cities within the country.

He's actually in the group (Borderless Collective) that I'm building up focusing on members engaging in similar activities. I can connect you two if you'd like. DM if you're interested in connecting with him and/or joining the group.

 

[Panos Daras]

Why don't you run the math first? Let’s say you spend your entire budget of $300,000 on buying and fixing up a house. Then, you list it on sites like Airbnb and Booking.com. Take a look at similar properties. In Europe customers book via these two platforms, they do not give a shit about big brands like the US. The average price per day in Budapest, is about $40 net after taxes and commissions to the platforms. Calculating for 8 months fully booked: $40 * 30 * 8 = $9,600. Subtract $1500 for repairs and utilities, and you get $8,100. Annual rental is around $400 * 12 = $4,800. I do not know the taxes there. After removing costs for repairs, it’s $4,300. Not great, not terrible in both cases. But if you live in California, this amount of money is peanuts.

In the end, you get to keep the house that most probably will appreciate.

 

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[Visida]

Conduct thorough market research in Budapest to understand current trends, property values, expected returns and growth potential. Consider the financial risks associated with investing in real estate abroad, such as currency fluctuations, tax obligations, changes in legislation and other unexpected costs. Remember to manage your real estate investments from a distance.