Buying An Apartment in Poland

Kintarō Hattori

Before anyone tells me not too I will absolutely be buying somewhere in Poland and I'd appreciate some advice as I'm not a homeowner here or anywhere so don't have any experiance to guide me.

The missus (who's Polish) and myself don't own any property but we're going to purchase somewhere in Poland this year, the only problem we're having is deciding what.
Without getting overly complicated I'll brake it down into two places we have our eyes on at the moment.

A - This is a new development that is quite small and is due for completion in 2008. The agent is reputable and the apartment is 54m2. It's one bedroom and is about a 15min walk from the city centre. The city in question is linked directly with Warsaw which is 80km away by a decent enough road.
The place will be built to a shell standard as it will have no floors or plaster on the walls and is roughly going to set us back about €50 000.
It has good rental potential and the maintenance charges are just €50 a month.

B - This is a 84m2 flat in the same town but without a parking space and a 10min drive or bus journey to town. The building is about 15 years old and about a 5min walk from a major hypermarket. It's a pretty decent location.
The flat has 3 decent size bedrooms. The kitchen is seperate and the living room is quite large. We could purchase it for about €39 000 and the maintenance charges are about €125 a month.

I don't know what we should go for as she says smaller flats are more popular, have more rental potential and we have some say in the layout of the flat as the plans aren't final, plus it has the option of a car parking space.
The larger flat though is considerably bigger, costs less but does have a much larger maintenance fee.

I would have thought a larger flat would be a better long term investment as poles generally marry and have kids earlier than us. What use would a one bedroom apartment be to a family? Plus if more westerner's move there a larger flat might be more desireable.

Does anyone have any advice?

Hells_Belle

I would go for the two-bed as it will have better resale value. In addition, if you ever need to pack it in here and chuck off to Poland (which, in dual nationality marriages, can certainly happen) it will house you and any sprogs in a pinch. Finally, the two bed, near a hypermart, in walking distance of a city is a good holiday let property or relocation let property - you have more scope for not purely local rentals.

gammama

eo980,

These are investment properties but you haven't mentioned the most important number: expected monthly rent!

Would this rent cover a 100% mortgage? No matter what level of mortgage you take out, will the property pay for itself? Or are you buying for capital appreciation?

What's the supply of similar properties in the area like?

Presumably your wife will be doing the donkey work in this: negotiations to buy, finishing the build, renting it out, dealing with tenants, etc. When it's finished and furnished, the new build apartment for a single person/couple should be easier. Also, the lack of official parking space in the other property would probably mean not as good a tenant.

If both of you were going to live there, it's a different story.

However, you have to look at it as an investment and factor in the hassel you're going to have with it.

You don't have a web link to the property by any chance?

antoinolachtnai

I think you really need local advice from knowledgeable polish people in the area. Figure out the tax treatment too.

Dr_Colossus

Hi Eo980. Like yourself I'm also thinking of investing in Poland and likewise do not have a property here to remortgage. As a result no Irish banking institution will issue a mortgage for an overseas investment property.
Can you advise what you are doing for financing ie. applying to a Polish bank for mortgage etc. Any other experience or knowledge you have on the market would be appreciated especially concerning the tax treatment of the rental income.
Thanks and good luck.

ionapaul

If you buy abroad you lose your Irish FTB stamp duty exemption - if you plan to buy in Ireland in the future, this might cost you many tens of thousands of euros

Owen

I'd be interested in this eo980, as you know, my better half is also Polish. Let me know how it pans out for you!

Kroko

If you buy the newer flat (50k one), you will be paying off your mortgage at least at around 250 euro per month (assuming you borrow 100%, take a mortgage in Swiss francs - lowest interest rate, 30 years). I currently live in Warsaw - so sorry, but I have to say a town 80 km far from Warsaw is in "deep countryside" and you can't expect somebody to commute... For 250 euros per month plus maintanence of 50 euros one can esily rent a similar flat in Warsaw suberbs. In a city 80 km by road you can expect to rent such a flat for a 100-150 euros per month, only to people working locally. So, 1. where is that rental capability, 2. are you ready to feed the crocodile and subsidize somebody with at least 100 euros per month for 30 years? (the difference between rent and the mortgage payment). 3. Does the price include floors, carpets, furniture, white goods?
If I were you and ABSOLUTELY had to buy a flat in that Polish town (what is it? Siedlce? Grodzisk? Minsk Maz.?) I would go for the newer one. But you should now that it will cost you money for the next 30 years... As for the capital appreciation - house price inflation slowed down recently, but obviously Polish real estate market conditions are quite far away from Irish real estate bursting bubble.
I own a 2 bdr flat in Warsaw, close to the subway, nice neighbourhood. I was thinking of buying a second flat to rent out, was hunting for the proper one for over a year - and never found a good investment property. I don't like subsidizing somebody else, and in my opinion any investment has to be profitable from the very beginning. I think flats bought to rent out haven't been good investment possibility since 2004/2005. Of course you may always count on capital appreciation, but that is called speculation, not investing.
Polish real estate market has already crashed once - in 2000/2001, when there was an oversupply of new flats. Every speculative market (and real estate is a speculative market...) is cyclical, goes up and down. Your choice, your risk.

pjbrady1

From my experience of dealing with Polish finance companies by far the best one is "Open Finance"
They will find best mortgage from a polish lender. They have been known to organise property management for you. I'm pretty sure their rep told me they can even help with looking for property. Not even Superquinn can top that level of service. Get a mortgage you won't have to stress over, ie let the term be long enough that the rent pays the mortgage for you. You will be at your leisure in Ireland then.

Kroko

But how long should the mortgage be so that the rent alone paid it off? There are no 50- or 60- year long mortgage deals in Poland...Taking into account present prices of flats the rent alone will never pay off the mortgage - the owner will have to keep "feeding the gator" for as long as the mortgage is being paid off.
Anyway, Open Finance is Ok, so is Expander and Notus.

Victor

Aren't there some temporary restrictions (10 years after accession?) on foreigners buying property in Poland or is that only agaisnt Germans?

Could your other half end up with an aprtment and you with nothing?

cinddy

antoinolachtnai wrote:

I think you really need local advice from knowledgeable polish people in the area. Figure out the tax treatment too.

it makes sense. It makes even more sense if they are reputable Polish realtors or lawyers.

zaratustra

i have been working at house / apartment agency in Poland for five years. This agency is situated in Katowice city near Krakow City. If you have any questions about an apartment in poland email me. rafal.napierala@ge.com

william

Hi, you should check out the Irish based discussion forum www.askaboutproperty.com which specialises in Polish property investment.

W.