Residential prosperity
So why choose this form of investment at all?
Apartments are as safe as houses when it comes to investments. According to research presented by Robert Chojnacki from tabelaofert.pl, residential properties do not lose their value as spectacularly as shares, for instance. The risk that a property will significantly drop in value is minimal.
Unlike hotels or office buildings, residential properties can be easily sold at any moment, especially when considering the huge demand for flats in Poland. When purchasing a flat, the owner is in a position to improve and develop the investment, for example through modernization or refurbishment, and thus increase the property value. What is also important is that flats generate fixed income in the form of rent. In fact, this income ensures a higher overall rate of return than the interest earned on bank deposits or bonds.
There are lucky ones who can finance the investment from their own pocket. Still, it is more common to use other people's money, most often in the form of mortgages. The latter option is so popular, not only because of simplified formalities and easy access to loans, but also because it is profitable. The value of the loan together with one's own means enable the buyer to purchase a property at a higher value than they could afford when having only their own savings. Importantly, the rate of return can be multiplied when it is financed by a loan. According to Chojnacki, taking a loan for 80 percent of a property's value could increase the rate of return four-fold.
The owner of a property could, but does not have to, live in the place. He can always stop using it and rent it for profit. What is more advantageous, then, from the user's point of view, owning or renting? One would be more willing to rent a place and not buy a property when there are other, better and more prospective opportunities to invest. For example, a company might prefer to spend less on its location through renting a place, and save money on other expenses that are deemed more necessary at a given moment, such as advanced technologies. Besides, there may be no other choice but renting for somebody who does not have the means to buy and at the same time is unlikely to get a mortgage.
High taxes can discourage some from buying a property. On the other hand, it is worth investing in a property purchase when taxes are low, attractive financing opportunities appear, and when a company needs stabilization for growth.
There are many reasons why buying residential property in Poland with the intention to rent it for a regular rental income is profitable. Apart from some obvious reasons, such as Poland being the largest residential property market among the new EU members, offering relatively low prices as compared to EU countries, there is a growing phenomenon of young people migrating to big cities. They, together with expatriates or students from abroad, form a great demand for flats to rent. This demand will grow due to the devastated condition of housing built in the times of socialism, which is sentenced for demolition within several years.
All this could be a clue for individual foreign investors, seeing as they are not obliged to obtain a permit to purchase a property in Poland.
Apartments are as safe as houses when it comes to investments. According to research presented by Robert Chojnacki from tabelaofert.pl, residential properties do not lose their value as spectacularly as shares, for instance. The risk that a property will significantly drop in value is minimal.
Unlike hotels or office buildings, residential properties can be easily sold at any moment, especially when considering the huge demand for flats in Poland. When purchasing a flat, the owner is in a position to improve and develop the investment, for example through modernization or refurbishment, and thus increase the property value. What is also important is that flats generate fixed income in the form of rent. In fact, this income ensures a higher overall rate of return than the interest earned on bank deposits or bonds.
There are lucky ones who can finance the investment from their own pocket. Still, it is more common to use other people's money, most often in the form of mortgages. The latter option is so popular, not only because of simplified formalities and easy access to loans, but also because it is profitable. The value of the loan together with one's own means enable the buyer to purchase a property at a higher value than they could afford when having only their own savings. Importantly, the rate of return can be multiplied when it is financed by a loan. According to Chojnacki, taking a loan for 80 percent of a property's value could increase the rate of return four-fold.
The owner of a property could, but does not have to, live in the place. He can always stop using it and rent it for profit. What is more advantageous, then, from the user's point of view, owning or renting? One would be more willing to rent a place and not buy a property when there are other, better and more prospective opportunities to invest. For example, a company might prefer to spend less on its location through renting a place, and save money on other expenses that are deemed more necessary at a given moment, such as advanced technologies. Besides, there may be no other choice but renting for somebody who does not have the means to buy and at the same time is unlikely to get a mortgage.
High taxes can discourage some from buying a property. On the other hand, it is worth investing in a property purchase when taxes are low, attractive financing opportunities appear, and when a company needs stabilization for growth.
There are many reasons why buying residential property in Poland with the intention to rent it for a regular rental income is profitable. Apart from some obvious reasons, such as Poland being the largest residential property market among the new EU members, offering relatively low prices as compared to EU countries, there is a growing phenomenon of young people migrating to big cities. They, together with expatriates or students from abroad, form a great demand for flats to rent. This demand will grow due to the devastated condition of housing built in the times of socialism, which is sentenced for demolition within several years.
All this could be a clue for individual foreign investors, seeing as they are not obliged to obtain a permit to purchase a property in Poland.
