Real estate investments in Slovakia
The real estate market in Slovakia provides an opportunity not only to preserve, but also to significantly increase your capital. For the last 6 years, the price of square meters in Slovakia has been steadily growing at an average annual rate of 8%-10%, and 2021 showed an increase of 18.7% (official source Halyk Bank of Slovakia). ). All indicators say that this is not the limit, and real estate in Slovakia will continue to steadily rise in price. Now we will analyze what factors influence the price growth, how long it will continue, who can buy real estate in Slovakia, how our company can help you choose the best strategy for investing in real estate in Slovakia and earn up to 50% per annum.
Why Slovakia?
The Slovak Republic has been a member of the European Union since 2004. The country is rapidly developing and investors are actively investing in new projects in Slovakia. The capital of Slovakia, Bratislava, is the only city in the world that simultaneously borders with two countries Austria and Hungary.
Thanks to its excellent geographical location and short distances to other European capitals, Bratislava is home to the offices of many global companies. The excellent investment climate and reliable EU jurisdiction favours the creation of many jobs. In recent years, it is more difficult to find an employee than a job in Bratislava. Employers compete with each other, offering better working conditions and social package.
Why are property prices rising?
As written just above, Slovakia is an employee hub for many foreign companies, the annual steady increase in average wages, the relatively low unemployment rate, even taking into account the pandemic, as well as affordable finance and the shortage of residential property all have an impact on the rise in property prices. A combination of factors provides Slovakia with a stable growth in property prices. And this trend will continue for a long time to come.
Affordable financing is primarily due to the low interest rate on mortgages at 0.9 per cent per annum. This is due to the fact that the European Central Bank (ECB) gives loans to the National Banks of the EU countries at zero interest rate, and they in turn, through commercial banks, stimulate the economy of their country.
It is necessary to take into account the fact that Slovakia has a normal market competitive environment between banks. Each of them fights for the client and from time to time enters the market with a promotional offer on the interest rate, adding to it the compensation to the client of a penalty for early repayment of an existing mortgage in a competing bank when refinancing.
The next factor is that the mortgage itself is not a risky credit product for the bank, because it is secured by pledged real estate and in case of insolvency of the client, by selling the property at auction will quietly return the money issued to the client.
The price increase is definitely influenced by the shortage of residential property. As much as we all think that there is a lot of residential property being built in Bratislava, this is not the case. New residential complexes do appear, at the end of 2021 there were 81 projects in the active phase, but they are few compared to what the real demand for residential property is. Anyone who bought or actively searched for a home in 2021 or early 2022 can attest to the fact that good properties sold very quickly.
Many Slovaks and not only Slovaks look at mortgage not only as a tool to solve the issue of buying their own home, but also as an opportunity to solve the housing issue for their own children. As a result, they take a second/third mortgage, which is paid by the tenant, and after 20-30 years this asset becomes cleared of liabilities and in addition with a high probability of a decent increase in value.
Why you can earn more on the property market in Slovakia with us?
Nobody forbids you to find a project or an object for investment in Slovakia on your own. However, we are talking about serious amounts of money, which means that you need to remove all possible risks or minimise them as much as possible. When analysing on your own, an investor may encounter the following issues:
- Language barrier that prevents you from understanding all the subtleties of the terms of co-operation or contracts;
- Lack of understanding of local rules and mentality;
- Inability to fully assess the attractiveness of the infrastructure near the selected property;
- Additional costs associated with personal stays for meetings and viewings.
All these factors can significantly reduce the expected return for the investor. So how exactly can our company help you to invest your investment more favourably and earn even more? There are two reasons for this: personalised strategy and interest protection.
Personalised strategy
In Slovakia there are many opportunities and tools to increase profitability in the property market, which a foreign investor does not even know about or access to such information is very limited. When we start working with a client, first of all we find out the client’s needs and investment objectives. Based on this information, we form an individual investment strategy for the client. Let us list a few such strategies.
Purchase of a flat for the purpose of renting it out (long-term, 5%-8% p.a.)
Buying a flat in basic condition, renovating and selling (short-term strategy is very popular, 20%-30% p.a.)
Purchase of a land plot, construction of several houses and their sale (medium-term, 30%-70%)
Finding a partner to acquire a land plot or facility for reconstruction (medium-term, 30%-50%)
Buying a property from a developer at the excavation stage and selling it before commissioning. In this option, when signing the contract, only 20% of the value of the property must be paid, and in 1.5-2 years before the commissioning of the property, it can be sold at 20%-30% more expensive than the amount of the contract. Since the investor has contributed only 20% of the property value, he gets up to 100% return on equity.
Buying the first property with my own funds, renting it out. Then, a year later, we buy the second property entirely at the expense of mortgage funds, and rent it out as well. As a result, we get two properties in ownership for the price of one, rent them out, the income from which is many times higher than the mortgage fee.
These are not all the strategies we develop for clients. It all depends on their investment plan. If preservation of capital and stable monthly profits are a priority, we will choose the best option in terms of renting out. If the goal is to make capital quickly and earn the maximum – we will develop a programme and offer options to achieve this goal.
Our company provides the following services
- Developing an individual investment strategy for buying property in Slovakia
- Search, analysis and selection of properties
- Remote viewing of properties, providing photo and video reports of viewings
- Checking the property for arrests or other encumbrances
- Carrying out renovation works, designer services, purchase and installation of furniture for the property to be rented out
- Management of leased property (search for tenants, signing of contracts, control over timely payment, solving household issues)
- Mortgage expert services for obtaining a mortgage from 0.9% p.a. to buy a property in Slovakia
- Accounting services for reporting in case of acquisition of real estate in the company
Our company’s price for property search, analysis and selection services is 3%-5% of the value of the property. Taking into account that we will find the best strategy for you, the cost of our services is very quickly compensated by its realisation, and will bring much more profit than purchasing a property on your own.
Thus our company provides a full range of services for investors who wish to make money on the property market in Slovakia. We can provide all services remotely. The investor will have to come to Slovakia only once to sign the main sale contract. Our primary goal is to protect our client’s interests. This means that we maintain complete confidentiality with the client, defend his interests before the seller, real estate agencies, developers, tax authorities and other organisations. We are always on the client’s side. We appreciate sincere recommendations that our clients share with their acquaintances.
Who can buy property in Slovakia?
One of the biggest advantages of the SR is the fact that even foreigners can buy property and land plots. You do not even need a residence permit in Slovakia. To buy property in Slovakia, it is advisable to open an account in a local bank, transfer funds to it, confirm their origin, and pay for the selected property from it. We will also accompany and assist you in opening a bank account in Slovakia. To obtain a mortgage, you will already need a temporary residence permit, which we can also help you obtain as part of a personalised strategy.