Thursday, September 6, 2007
Krakow prices stop rising but Poland moves on
Poland stole the limelight in 2006 with the fastest growing real estate prices in Europe and nowhere rose faster than the popular tourist destination of Krakow. But the latest figures show that now, more than ever, buyers need to think carefully about where they buy. Tim Hill from the Anglo-Polish property portal Mamdom.com looks over the latest figures.
There is no doubt that Poland, as a country, is seeing strong and healthy increases in property prices. The average price per square meter of residential real estate has been moving up steadily at 10% per quarter since the summer of 2006. The good news for foreign investors is that this is not driven by the speculation of international buyers but by the rising wealth of the Poles themselves. The result is that houses and apartments bought, even at these new higher prices, can be rented out or resold to a wide market place.
Krakow had to be one of the first cities to see large scale price rises, its beauty and splendour never fails to capture those who visit it and as sure as night follows day tourism was going to be big business. In the mid 1990s trail blazers found their way there and started purchasing real estate and the market gathered pace. Last year saw some owners benefit from nearly 100% capital gains on their apartments in the old town but if this were to continue a crash would become inevitable. As such the stagnant prices now in the city are seen by many more as a relief than a disappointment. Internationally it is still cheap, but the rest of Poland must catch up first.
Warsaw, on the other hand, never had the advantages Krakow was endowed with but did well to re-invent itself as a commercial centre. With the Polish economy growing faster than its German neighbour large numbers have been steadily drawn to the capital and property prices have been creeping up. At the start of 2007 there were 151 new developments under construction in the city but it’s a drop in the ocean for a city set to double in size over the next decade. Prices per square meter of residential property are steady with increases of 8-9% per quarter and a strong rental market with it.
Other leading cities at the start of 2007 included Gdansk, Poznan and Lublin. Gdansk saw price rises of 13% but apartments rose 16% as the number of tourists to this seaside resort are expected to continue growing for the foreseeable future. Poznan on the other hand is doing well as a commercial centre due to an improving road and rail network with Germany and Berlin. Prices in the western city rose 17% driven especially by a shortage of houses, rather than apartments, as wealthier city residents looked to upsize. Lublin, a medieval city with some 80,000 students in its various universities and colleges saw the price per square meter of apartments jump by 19% in the first quarter of 2007 and is widely seen as one of the best cities for capital gains over the next five years.
So as the media dust settles it is becoming clear that smarter buyers may want to think twice about following the crowd to Krakow. Although undoubtedly there are still gains to be made here better than those in many other European hotspots, there are even more substantial profits to be found elsewhere in Poland.
Full market analysis reports for Poland, Krakow, Gdansk, Lublin, Poznan and Warsaw are available at www.mamdom.com along with current real time prices and a wide selection of offers from both the primary and secondary market.
Savvy Investors Profiting from Quivering Real Estate Market
For smart investors, the slowing pace of home re-sales, which were down 2.8 percent in January, and the 5 percent drop in new home sales, represent nothing but opportunity. In fact, Neb Essayas, founder of Premier Real Estate Solutions, LLC (www.RealEstateMadeEasy.net) says that the market slowdown in major cities represents "the most exciting time for our business."
Utilizing private lenders, Premier Real Estate Solutions buys properties in northern Virginia, central Maryland, and the District of Columbia at 25 to 50 percent below market value. The company then renovates the homes and re-sells them at market value. "There's talk about the real estate bubble bursting," says Essayas, "but what's happening is that sellers aren't making windfall profits anymore. The housing market has been so hot over the past five years that so-called investors could afford to pay market value, watch the property appreciate, and sell at a profit."
In contrast, Premier Real Estate Solutions makes its profit going into the deal - through buying the right properties at the right prices. "As a rule of thumb, we do all of our numbers right and build in our profit margin before purchasing the property," says Essayas. "We only buy two types of properties: those where we can quickly create equity through renovations and those where we buy equity from motivated sellers who need a quick sale."
Now that the real estate market isn't so forgiving, Essayas says that buying the right properties at the right prices is key. "The numbers have to be right, not only to ensure that our company makes a profit, but to secure our private investors' loans." Those numbers are providing hot returns on investments, regardless of the price range of the home. For example, Premier Real Estate Solutions purchased a home for $405,000, spent $1,000 in upgrades, and sold the home for $599,000. Similarly, Essayas put $32,000 of renovations into a home purchased for $229,000 and sold it for $390,000. "Recently, within a three and a half week period, we bought a home for $77,000, spent $12,000 fixing it up, and found a buyer willing to pay $170,000," he says.
Using private investments to purchase and renovate homes gives Premier Real Estate an advantage over developers using institutional lenders, in that the company can move nimbly when it finds a bargain. "The private capital we've been using has allowed us to close on these properties in as little as three days," says Essayas.
As for investors, they appreciate being able to earn a better return through Premier Real Estate than they can with traditional investments. According to Harry Roupas, who has made significant investments in Premier Real Estate Solutions properties over the past three years, "The excellent returns I have seen on my investments demonstrates to me that Premier's business model is sound. Buying properties below market value, renovating them, and selling them at a profit is the right approach for today's real estate market, but you need a Premier Real Estate to make it all work just right."
And Premier Real Estate is hard at work, planning to purchase between 50 and 60 properties in the Washington, D.C. Metro area this year, and looking to a future in larger development projects, such as condominiums and hotels.
While Essayas anticipates that the market's cooling trend will result in a longer turnaround time for sales, he emphasizes that "we factor higher carrying costs into our equation before making an offer to purchase a property."
He concludes, "Because we never pay market value for a property to begin with, we can continue to take advantage of the current real estate market to secure properties at prices well below market level, renovate them, and sell them at a profit."
Tips to Rent a House That Allows Pets
Pets render feelings of being able to look after someone and not being isolated. For that reason, they are lovable for most individuals but renting with pets can be tough as not every landlord can see them around. Having a pet in rental home or paying guest accommodation has often seen to be a bone of contention between a landlord and a tenant.
Outlined below are the tips to rent a house where you are welcome along with your pets.
• Start with checking the real estate listings for the location you want to stay at. You may consult daily locals, online resources, and property publications featuring advertisements for rental house or paying guest accommodation.
• Shortlist all the preferred listings that says ‘PETS ALLOWED’ and based on your specific criteria for a new rental home.
• There are certain places which are generally marked as pet friendly. Try scouting for rented accommodation at such locations first. It will help you to save on time.
• After you have narrowed down on the rental house for yourself, represent yourself as a responsible pet owner and considerate of other tenants in the building.
• You may also show your pet’s health records to your landlord. In case, you are moving at some far off place, you are advised to check with your veterinarian to ensure proper health of your pet.
• Once your landlord agrees to rent to you and your pet, ensure to get the permission in writing into your home rent agreement or lease. It must be signed by both the tenant and the landlord. Your lease should state the number of pets you can have and of what type. You may also ask for copy of ‘pet rules’.
• It may happen that your landlord already has a home rent agreement that includes a clause saying ‘no pets’, but your landlord has approved your pet. During such an instance, ensure to cross that clause and modify it by your own. Make sure that you and your landlord should both sign it.
Author Bio: Vasudev Bhattacharya is a writer and editor of website http://www.realtymantrarentals.com. The website is a property rent guide, dedicated to disseminate information required to avail rental accommodation – both commercial as well as residential across Indian cities. Your queries and suggestions are welcomed at onlinevasu@gmail.com.
|
