Nowadays, buying real estate is not only a need for your own home. Real estate is also an excellent way of investing money. Here are some tips to help you make your purchase at the right time.
Buying your first properties can be hauntingly challenging, but that shouldn't stop you. With a responsible approach to the purchase, everything will go well. One of the most important factors that can affect the purchase is the right time. Before buying a property, you must thoroughly analyze everything, determine all the risks, find out all the details that can help you or, on the contrary, slow down the process. The real estate market is not stable, it changes all the time, real estate prices rise and fall all the time. The key is to find the right moment to buy. Easily analyze your rental property investment with a powerful tool, the Cap Rates Calculator.
Well, it’s best to buy property for rent in cities when there’s a) enough job stability to rent but not high enough salaries to buy a house, b) a large tourist flow. In Europe, that’s the countries’ capitals and cities on the seaside. Vienna, for instance, is an incredible city for rent. It’s beautiful — which doesn’t hurt even if you don’t plan to live there, — there are many tourists, each year, and you can buy apartments in Vienna even if you’re not a resident. Of course, Vienna being expensive, its real estate prices bite quite a lot. But: you’ll be renting out that apartment, right? “Expensive” is quite alright as a long-term investment. The prices vary from €100K and up.
Fall is a perfect time for a deal. In Austria, as it’s already been said, there’s a tourist flow to consider: when you’re buying in summer or spring, the sellers (as well as the banks) are mostly focused on rich tourists, so that might affect the deal.
Winter is a very dead season, but there could be sellers who want to sell urgently — you have to monitor the market to notice these kinds of offerings (or hire people to do that for you).
Another thing is: sometimes, waiting for a “perfect time” is just procrastinating. You won’t be able to calculate perfect circumstances for purchase beforehand; everything can change in mere days (as you’re already aware, after 2020). So: keep numbers in mind, but don’t stick to them and delay getting what you want.
Vienna is the 16th most expensive city to buy a flat in Europe. The average price for a square meter is €7,500. These stats are for apartments in cities’ downtowns; of course, it gets cheaper as we’re moving on to neighboring districts where locals live, areas that are far from any attractions, and so on.
The local market is also influenced by gentrification. With Vienna being a city that draws in lots of startups and investors, these far-away districts can be transformed — in just a few years — into places that are capable of serving the customers with much higher demands and much bigger yearly income.
Also, look for migration flows: people are going to Austria from all over the world: to become a student, to work, to change, like, places, etc. Don’t be afraid to buy if the apartment is priced low, too: you’ll be able to do repair works and rent it out for a good cost afterward.
Current Mortgage Rates
Within Europe, Austria is among the countries where a mortgage agreement can be concluded on the most favorable terms. The mortgage rate in Austria is, on average, 2-4%. This option for acquiring property is one of the most popular and convenient.
Here are a few tips. Don’t go into the mortgage agreement with the first bank that made you a mortgage offer. Take it as responsibly as possible. It will be even better if you hire a lawyer who will explain in detail to you each offer that you receive and analyze all your documents and contracts. It will cost a little, but you won’t be sad afterward.
Also: a mortgage is perfect if you’re renting out, but then your future rent rates must cover it. So, make sure you have the money for redecoration or a little do-over in the apartment if it needs that. Then, you’ll be able to ask for high rent prices.
Don’t forget to include property taxes when you’ll be planning out your budget on what to do with the house after you bought it (you can factor them in in the rent estimates as well.)
The final advice is: if you’re thinking you’ll be renting the apartment out in the next, say, seven years, stick to that number. Don’t get into the temptation of selling it in a few years just because real estate prices are going up and there are promising social factors. You’ll risk losing a lot of potential profit. Long-term investments need decades to properly marinate.
Buying a home is a very important step, especially for people who are buying their first property.
But do not be afraid of this process, because if you follow all the rules and with a responsible attitude to business, everything will be fine. Then, the easy part is done, and you’ll be looking for good tenants!
