I’ve been active in Budapest real estate since 2016, and still own real estate there.
What I love about it is that I get to own real estate in absolutely gorgeous historical buildings for half the price of Prague and various Western European capital cities.
Budapest offers great value for money when it comes to real estate. The rental yields aren’t fantastic (5-6% gross rental yields), but you get to own beautiful real estate that survived a few world wars and decades of communism.
Benedek is a buyer’s agent that specializes in helping people find investments in the Budapest real estate market.
In this video, he took me to some of the top neighbourhoods / districts to invest in this gorgeous city.
I wrote a whole analysis on the real estate market in Budapest.
You can get in touch with Benedek and find out about his services here.
Benedek is launching a free newsletter on Budapest real estate opportunities, feel free to join here.
A Hungarian Golden Visa is on its way
Back in November I interviewed Laszlo and Benedek about the Hungarian Golden Visa, which is set to launch around September 2024 or so. There haven’t been any significatn updates since then. For now we know there will be two options to get this Golden Visa which will grant Schengen access:
- €250,000 in a Hungarian real estate fund
- €500,000 directly into Hungarian real estate
Will any real estate qualify, only approved projects, multiple properties, etc?
We don’t know for now.
If you want to be amongst the first to find out, send Laszlo an email asking him to keep you posted. laszlo@thewanderinginvestor.com.
To a World of Opportunities,
The Wandering Investor.
Available services in Hungary:
Other articles on Hungary:
- Why did I sell my Budapest Apartment?
- How to maximize Airbnb yields when you invest in Budapest – up to 10% net yields
- A cheap Plan B in rural Hungary
- Investing in the Stock Market in HUNGARY, good value or value trap?
- BREAKING NEWS: Hungary Golden Visa – what we know so far
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
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Transcript of “Best neighbourhoods and districts to buy Real Estate in Budapest”
LADISLAS MAURICE: Hello, everyone. Today, I’m in Budapest with Benedek, my real estate buyer’s agent. Benedek, how are you?
BENEDEK: I’m fine, thanks, Ladislas. How are you?
LADISLAS MAURICE: Good. Good, good. Today, we’ll be having a very interesting discussion. We’ll be going around all of Budapest, and Benedek will show us his favorite neighborhoods from a real estate investment point of view, so the neighborhoods that he typically recommends to his clients, and some of them also that he does not recommend to his clients. It’ll be a good pros and cons overview of neighborhoods, districts here in Budapest.
Investing in real estate in the 5th district of Budapest
Benedek, we are now in the 5th District. This is the really core, actually, the apartment that I still have here in Budapest is a five-minute walk away from here. Personally, this is one of my favorite districts. We have the Soviet monument here, the US Embassy is right here, the parliament is a one-minute walk away from here. We’re in the 5th District. What are your thoughts on the 5th District?
BENEDEK: The 5th District is definitely the first that comes to mind as a foreign investor when investing into Budapest, is the most central, it’s the most prestigious, it’s the representative center of Budapest. Like you said, a lot of ministry buildings and institutions around here. And it’s very pleasant to be around here. But from an investment point of view, it’s not necessarily the best if you are after yield. For example, here, understandably, the prices are much higher, so you are lucky if you find an apartment under or around €3,000 per square meter, even as un-renovated apartments. If you invest here, you cannot expect high yields, but you can expect that your capital will be very safe, it will appreciate over time, for sure. This is a good location if you are a more conservative investor.
LADISLAS MAURICE: And I think this is really important because a lot of people don’t necessarily come to Budapest for yield, but they come because they want just prime beautiful real estate. And when you’re looking at €3,000 to €4,000 a square meter here in the 5th District, the reality is it’s cheaper than in Bratislava, in Slovakia, right? It’s cheaper per square meter here, and it’s half the price of Prague. What Budapest offers, objectively amongst European capital cities, is deep value for a beautiful city. The only two cheaper EU capital cities really would be Sofia in Bulgaria and Bucharest in Romania, but they’re not half as pretty, they don’t have half as much tourism. Maybe Zagreb, but again, prices in Zagreb are fairly similar to here. Again, much smaller city, not as pretty, etc.
Budapest, in terms of value, is really up there in Europe as the best in Europe in terms of value when you buy real estate here. And the 5th District, if you want prime, is definitely a good indication of this. I think it’s also important to make the difference between the various parts of the 5th District.
BENEDEK: Yeah, definitely. There are parts which is very pleasant to live, like where we are right now, but there are, of course, the parts of the 5th District which are very touristic. So don’t be fooled by any agent that tells you that the Vaci, he would say, is the way to go because it gets the most traffic from tourism. Of course, it gets the most traffic from tourism because this is the main pedestrian street and shopping streets of Budapest. But it results in being a very unpleasant place to live because there is a lot of noise, there is a lot of people, there is almost always crowds. So commercial wise, it’s probably wise to look around there, but if you want to make residential type of investment, I advise to steer away from the very touristic places of the 5th District.
LADISLAS MAURICE: And I think Benedek has a very good point here, in the sense that I’ve seen a lot of foreigners make this mistake when investing here in Budapest. They come here, they’re American, or they’re from the Middle East, and they meet these like Hungarian agents, and they tell them, “Look, this is where all the tourists are, etc.” Then they buy. But the reality is people who know the city, no one wants to really rent there long-term. So you pay a massive premium for something that locals don’t really want. On top of that, the Airbnb restrictions are quite tough here.
BENEDEK: Yeah. Well, in the 5th District, it’s safe to say that by now it’s practically impossible to get the license for Airbnb because, in every building, it’s only allowed to have 5% of the properties within the building are allowed to have licenses. And if you think about it, in a building where there are 20 apartments, only one can hold the license. There is probably already one that holds the license, so you would not be able to get one.
LADISLAS MAURICE: And I think this is really important for people to understand, when you come here, you’ll meet a ton of agents, they’ll tell you, “Yes, you can do Airbnb.” And it’s true, you can. Just you’re not going to get the license. Theoretically, you can. You can apply for the license but it’s going to get rejected. And that’s why it’s worth it to hire someone like Benedek, who not only does buyer’s agent services, but does renovations, remodeling, and property management as well. He’s got a whole team taking care of this so that when he recommends a property, he can then structure the offer in a way that can ensure that you get the license before you even make the deposit, or the deposit is refundable if you don’t get the license, to make sure that you actually get what you’re paying for.
BENEDEK: Or, since we are talking about licenses, I have a client who I’m actively searching properties for now. And even though we are searching in the 6th District, where nowadays it’s easier to get the license, but even so, there are some buildings where the local residents are very against Airbnb. And we also try to discover this before buying into a building because even if you can get the license but then you will be sabotaged by the locals, it’s no good.
LADISLAS MAURICE: Yeah. Yeah, yeah, people can do things, switch off your electricity, cut some cables. [laughs] People can do anything.
BENEDEK: Yeah, people get creative about this, yeah. [laughs]
LADISLAS MAURICE: Yeah, yeah. Cool. All right, fantastic. Which district are we going to now?
BENEDEK: Well, since we already mentioned, we are going into the 6th.
Investing in real estate in the 6th district of Budapest
LADISLAS MAURICE: All right, cool. Let’s go. All right, so here we are in the 6th District. Right behind us is the recently renovated Opera House. Benedek, tell us about the 6th District.
BENEDEK: All right, so 6th District is a very good middle ground if you want to invest either in long-term or short-term rental. Prices here for un-renovated apartments are approximately two thousand and a couple of hundreds of euros. Already, like, €500 to €700 cheaper, at least, than in the 5th District, and we are just a couple hundred meters away, basically, from the border. The 6th District changed their legislation for short-term renting in the beginning of this year. If you buy as an individual and not through a company, you will be able to get the license very, very easily.
This is a very central part of the city, not too noisy from tourists and the nightlife. Also, everything is within reach. The main avenue of Budapest runs through it, it’s an AAA+ location. If you invest here, you are also getting value for your money, your capital is also safe, and you can make decent yields, not the best yields around but definitely good yields.
LADISLAS MAURICE: I agree. I had bought an apartment here in the past. I sold it in the last few months. I made a video on why I sold it. I wasn’t particularly happy to sell it, but I sold it because I had other investment opportunities in Latin America. But if I were to come back to the Budapest market, the 6th District, along with another one that we’ll be discussing in a bit, would be one of my definitely top destinations for investing. Like you said, I mean, this Andrássy Avenue. It’s like the Champs-Élysées or the 5th Avenue of Budapest.
I mean, right here, right behind us there’s, like, the Louis Vuitton store, etc. Premium yet affordable, and flexibility for both short-term and long-term, because it’s a neighborhood where people actually want to live in, so it’s very livable. The properties are extremely versatile. You can do long-term, short-term, so this is a big plus. Cool. All right, fantastic. Which district are we going to now?
BENEDEK: We are continuing our way to the 7th District.
Investing in real estate in the 7th district of Budapest
LADISLAS MAURICE: All right, let’s go. Great. We’re now in the 7th District. It is known as the Jewish district. Right behind me is the large Synagogue of Budapest, and it’s actually Europe’s biggest synagogue. Benedek, can you tell us a little bit about the 7th District from an investment point of view?
BENEDEK: Definitely. This district is not only known as the Jewish district, but since the Airbnb revolution, so to say, it’s also known as the party district of Budapest, because in the inner 7th District, they have made an incredibly huge investment, development, and formed a lot of nightclubs, restaurants, a whole building block, a quarter, was dedicated to this. And so, understandably, a lot of people come here just to party. It’s very noisy, very busy here. People start to just flee from this area as residents. Basically, this area is converted to a completely touristic zone. And such it is incredibly overrated.
The inner city center of Budapest is not very big, so it’s very easy to come here from the neighboring districts as well, which are much more quieter, much more pleasant to be at, and it’s also cheaper to buy properties there. Nowadays, I don’t usually recommend to buy into the inner 7th District. It’s overpriced, it’s problematic guests are arriving here because the guests who will come here they want to be at the very epicenter of the party life.
LADISLAS MAURICE: So all the English people, [laughs] Europeans will understand, all the young English kids from Manchester, all that, Liverpool, they all stay here.
BENEDEK: Yeah. Stag parties, bachelorette parties, and such. If you buy here, you can expect that your property will be damaged much more than if you buy in the neighboring district.
LADISLAS MAURICE: What about the Airbnb restrictions? Are there any?
BENEDEK: Yes, I also wanted to mention that. That Airbnb licenses can only be received here if the building allows you to do short-term rental in the building. If you decide to still buy here, you should definitely check if the building allows this. Because if not, then you might just end up stranded with a property that you can’t use for long-term rent because nobody wants to live here.
LADISLAS MAURICE: And if you get long-term tenants here, it’ll typically be exchange students who often will trash your apartment as well.
BENEDEK: That’s right.
LADISLAS MAURICE: Especially if they choose to live in this district. But then you mentioned that this is true for the inner 7th District.
BENEDEK: Yeah.
LADISLAS MAURICE: What about the outer 7th District?
BENEDEK: That’s right. Well, the outer 7th District is a completely different part of the city. And it’s much cheaper. The outer part of the 7th District, which is actually very close to the City Park of Budapest, it used to be a very bad part of the city, but it’s getting better and better. It’s very cheap to buy properties there.
LADISLAS MAURICE: How much per square meter can you find in the outer?
BENEDEK: Well, that’s the interesting part because there, you can find apartments that are un-renovated below €2,000 per square meter. If you want to do student rentals, if you want to do long-term rentals, even some parts of that part is usable for short-term rental. I would say it’s still a better investment than to come here in the center.
LADISLAS MAURICE: Okay, cool. Fantastic. Now we are going to district?
BENEDEK: District 8, my favorite.
Investing in real estate in the 8th district of Budapest
LADISLAS MAURICE: Okay. All right. This is going to be an interesting one. All right, let’s go. Here we are in the 8th District. Benedek, tell us about the 8th District.
BENEDEK: All right. Well, the 8th District is famous for its ambiguity in the outer parts. It’s called a no-go zone by foreign investors. Of course, this has its reasons why it is like this. There is the country railway station, which is a landing spot for a lot of immigrants, and a lot of minorities live there, historically. Even that part is being better now, but I would still not recommend to go there, outside of the ring road where the main tram line of Budapest goes. But inside this ring road, this quarter is called the Palace Quarter. It got its name from the buildings that are around here. These used to be palaces of noble men in the 19th century.
And so this is a very different place than the outside part of the 8th District. It is very central. It is approximately the same in location as the inner 7th or inner 6th District. Just one street away from here, you can go to the 5th District, to the very city center. And still, in this part of the city, the prices for un-renovated apartments are the cheapest among the central districts. You can get apartments here as low as around €2,000 or even maybe a bit below, which is extraordinary. And you can renovate them and you can make short-term rental units out of them for the best deal that is attainable nowadays in Budapest, or at least this is definitely my theory. I also have my own investment here.
LADISLAS MAURICE: Yeah. And again, the outer 8th District you want to be careful because a lot of real estate agents pitch it to foreigners saying that it’s better now than it was before, and it’s the cheapest per square meter in the center, etc., etc. But the reality is there is a bit of like a period when the government was making the Roma minorities, the gypsies, kind of leave, making them exit that area.
And then the government did a lot of urban planning. But then what happened is a lot of all the Nigerian, Indian, Pakistani, Bangladeshi immigration just concentrated there. I think there’s definitely a cap in terms of the upside with these sorts of demographics in that area. So think of other European capital cities in the West, it’s not where I would focus my investments but yeah, here, inner part of the 8th, absolutely lovely, the architecture is AAA, beautiful. And parks like this, everything, really great. Cool. Now we are off to?
BENEDEK: The 2nd District, which is on the other side of the river.
Investing in real estate in the 2nd district of Budapest
LADISLAS MAURICE: Cool. Great. We’re going to cross the famous Danube. Let’s go. All right, so we crossed the Danube. Tell us about the 2nd District.
BENEDEK: All right. The 2nd District is, in prices and in prestige, it’s very similar to the 6th District, so it’s not the most expensive but still pretty expensive. The main difference is that local residents prefer this side of the Danube to live. Meanwhile, on the Pest side, you will meet more foreigners. Here, you will meet more locals. The streets are a bit wider. There are a lot more green here. It’s not as flat as the Pest side, it’s a bit hilly. You can see the streets are going up and down. If you are interested in relocating in Hungary, which I get a lot of inquiries for nowadays, then this might be a neighborhood that you should check out.
LADISLAS MAURICE: And I think this is very important. Most foreigners tend to congregate on the Pest side. But for people who want to move to Hungary to be amongst Hungarians in a very European environment, the 2nd District is probably a better option.
BENEDEK: I think so, too.
LADISLAS MAURICE: What about Airbnb here?
BENEDEK: Well, I have received also inquiries about having an investment where you live in half of the apartment, and you separate the other half for rental purposes, so that you also have some kind of income. It’s also very easy because there is no restrictions whatsoever in this district, so either as an individual or as a company, you can still hold the license very easily.
LADISLAS MAURICE: Is there demand for Airbnb, because most of the tourism is on the other side of the Danube?
BENEDEK: Yes. For most investors, this is surprising, but we have been managing a couple of dozens of apartments on this side of the Danube. They are able to do more or less the same revenue as on the other side of the Danube.
Newsletter on real estate investing in Budapest
LADISLAS MAURICE: Okay, really interesting. You recently launched a newsletter. Can you tell us about the newsletter?
BENEDEK: That’s right. The main reason for this is that I constantly monitor the market, but sometimes, I don’t have the investor needs for property that I find very interesting. I will be launching a newsletter. And I will be covering, among other topics, real projects that you can jump on, even if we are not in a contractual relationship, you can just hit me up and tell me, “Hey, I saw your newsletter. I’m very interested in this.” And then we can move forward within days or weeks.
LADISLAS MAURICE: Cool. Fantastic. There’s a link below to Benedek’s free newsletter. Also, I wrote a whole article on the real estate investment market here in Budapest in terms of the neighborhoods, the do’s, the don’ts, etc., macro analysis. You can see it here. There’s a link below. It’s on my website. Before you make a real estate investment here in Budapest, I really recommend that you read this full, thorough analysis. And if you want to get in touch with Benedek, so Benedek offers real estate buyers services, so which is different from the typical real estate agents in Budapest who just sell their portfolio. He represents you as the buyer and goes out and hunts for specific deals based on your needs. You also have a renovation/remodeling company.
BENEDEK: That’s right.
LADISLAS MAURICE: And you also have a company that does a bunch of management of Airbnb’s and long-term rentals as well.
BENEDEK: That’s right, yes.
LADISLAS MAURICE: Cool. Benedek can help you from A to Z. You work with lawyers, etc. He can help you from A to Z with all your Budapest real estate needs. All right, Benedek, thank you very much for driving me around today.
BENEDEK: It was a pleasure.
LADISLAS MAURICE: It was fun.
BENEDEK: Yeah, it was.
