“I achieved my goal”: an interview with a Tranio client a year and a half after buying a profitable apartment in Budapest
In 2016, a lawyer from Kiev Roman, with the help of Tranio, bought a profitable apartment in Budapest – he told us about the search and purchase procedure in the last interview. Did he manage to achieve the planned profitability and whether the purchased apartment increased in price – Roman answered Tranio questions a year and a half after closing the deal.
– Roman, tell us in a few words about your purchase.
– This is a three-bedroom apartment located in the central V district. Due to the favorable location and the fact that there are not so many two-bedroom apartments in the area that are being rented, it is in demand by family tourists with children and companies of two couples who can stay separately without interfering with each other.
I started buying an apartment in March 2016, in May I signed an offer to buy, and in August, after receiving permission to purchase an apartment from the Hungarian authorities, I signed a contract of sale. In December, I finished the repair, equipped the apartment with everything I needed and started renting it out for a short-term lease.
– With the help of a management company?
– At first, I wanted to rent an apartment through a local company, with which I closed the deal. But later I changed my mind: after all, their main business is buying and selling objects, not renting. I told them so: in my opinion, you do not have time to react quickly, you do not have enough experience and resources. Together with them, we prepared an apartment for renting: equipped a built-in wardrobe, bought a TV, household appliances, they made the interior decor. How it all turned out – I liked it. But it took a lot of time, but I wanted to start renting an apartment as soon as possible.
Then I talked to Inna Opalyuk, who helped me with buying an apartment from Tranio, she recommended to me Ales from a partner company in Budapest. We met with her and talked all the details. By this time I had already professionally taken photos, and we placed an ad on Booking.com, Airbnb and another Russian site.
Apartment Romana can accommodate up to six guests: there are two bedrooms and a living room with a large sofa.
I continue to work with Alesya up to now, she deals with all issues related to the management of the object: she tracks reservations, meets and escorts guests, learns about their wishes, answers questions and organizes cleaning the apartment. She helps me deal with the payment of utilities and reporting. We work with her company on the basis of a service agreement, I pay commission: 25% of rental income. Perhaps there are management companies on the market that take a smaller percentage, but I am satisfied with the quality of the services provided.
– And what percentage of rental income is the payment of utilities?
– It is quite difficult to calculate for sure: each region has its own specifics. There is still a high season when the apartment is in demand, and the daily rent is high, and there are months with low income. On average, the monthly fee for a double apartment in the V district, taking into account the Internet, electricity and utilities, is 60–90 euros depending on the season, since I have electric heating of the apartment, and in winter the heating costs are higher.
– When does the high season in Budapest begin? And how many days a month does an apartment rent at this time?
– High season starts from March or even from Valentine’s Day. In general, since Budapest is popular with tourists all year round, there are no strong attendance fluctuations. During the high season, the occupancy rate is usually 22–25 days out of 30. This is due to the favorable location and the fact that the consultants competently approach the pricing policy. For example, if free windows remain for posting on a few days, then they lower prices on these days, offer some stocks. Here I completely rely on their experience and knowledge of the market in which they have been operating for more than 10 years. As far as I know, they have about 40 apartments under their management, including their own.
– And in the low season, the occupancy rate is still lower? How much?
– Of course. For example, in November, the occupancy rate may be as low as 20 days. Naturally, in the low season the prices for accommodation are completely different: they are falling. If in high season one day per person costs 65 euros, then in low season – from 42.
Again, we ourselves use this apartment. We like Budapest, and the whole family comes there 5-6 times a year for a few days.
– In the last interview you said that you expect a yield of 9%. How much happened in reality, you can already say something?
– Probably at 9% I do not go out, because I give 25% of my income to the management company, plus utility costs. For example, it came as a surprise to me how electricity charges are calculated. At first, we took into account some preliminary volume of electricity consumed and automatically debited the funds, but in March they made a reconciliation of meters, and a correction bill came to me – I had to pay about 500 euros.