Help & Advice

Here we have listed some popular questions and answers regarding property investment in Slovakia. If you have a question that is not listed here then please send us an email and we will do our best to assist you. We also have our own blog that we update reguarly with different news and articles regarding the property market. Click here to view our blog.

Where are the best places to invest in Slovakia?
Can I obtain finance or a mortgage in Slovakia?
How much money should I invest?
What is the safest way of investing in Slovakia?
Is it possible to build a ‘buy to let’ portfolio in Slovakia?
I am nervous about dealing with a foreign agent, how do I know I can trust them?
What are the pro's and con's with new or off-plan builds?

I am thinking of investing in a new build or off-plan property, is this the best place to put my money at the moment?
Why have these concrete flats proved to be such a successful investment for you?
I have seen cottages for sale in Slovakia for 5000, would this be a good investment?
I have been looking at ski resorts and apartments, is this a good investment?
You seem to favour building and renovating over a straight financial property investment?
The thought of trying to manage a renovation or build myself abroad is daunting, how do you do it?
Is an off-plan property in Bratislava still a good investment option?

 

Where are the best places to invest in Slovakia?
The golden question! Well to be honest, there are lots of good investment opportunities in Slovakia and not just in Bratislava. Making money from property developing requires the following, knowing the market and location you wish to develop in. Supply a demand in that location and work to a strict budget. If you follow these rules then you can make a profit from developing property virtually anywhere in Slovakia.


What is the safest way of investing in Slovakia?
As in any field of business there is never a risk free scenario, what you can do is to control the variables that may effect your investment. You should research the market, speak to us and discuss your goals and together we can look at different options and establish an exit strategy for your investment. You may wish to look at a renovation project or a longer-term investment project. Whichever it is we can help you look at your options to make sure they are profitable when your project matures. Do not over-stretch yourself financially and don’t rely on rental income to make repayments on any finance or a mortgage.

Can I obtain finance or a mortgage in Slovakia?
The answer to this in short is yes; there are some favourable deals to be found in Slovakia. The mortgage process is fairly simple and involves you providing the same sort of information, as you would have to in the UK.

Is it possible to build a ‘buy to let’ portfolio in Slovakia?
We would class this type of strategy as ‘high risk’ and in our opinion it would cause you problems due to the dynamics of the Slovak property market. The major factor is that there just isn’t a huge rental market in Slovakia; around 70% of the population owns their own property. This is down to a number of reasons including the following. The socialist government that was in power until 1989 provided free housing to married citizens. The Slovak people now have access to mortgages, finance providing a good incentive for them to buy. Due to the good access to finance it also throws a shadow on the prospective rental market. People that are renting may not have access to finance due to a poor credit history. They may be in short term employment; 2 years continues employment is required for a successful mortgage application in Slovakia. In our experience, all these things can be indicators for problem tenants.

I am thinking of investing in a new build or off-plan property, is this the best place to put my money at the moment?
If you invest in the right location at the right time then you can make a profit on your investment on these types of purchases due to the rise in the market, though there are more profitable options depending on how long you intended on investing for. Though not as glamorous, we have seen a much better return when investing into the domestic housing in Slovakia. The majority of people in Slovakia live in the large concrete blocks of flats situated in every town in Slovakia, you would have seen them if you have ever visited Bratislava. These types of blocks date back to the socialist period and were built and paid for by the state. They are the bread and butter of any sales/reality agent in Slovakia and have shown us a return of 100% between 2007 and 2008. That’s correct, the value of our portfolio of these properties doubled in that 12-month period. That’s not a green flag for you to go and plunge your money into buying these types of properties. A good knowledge of local areas and rising markets is a key factor when investing into renovating these types of properties.


What are the pro's and con's with new or off-plan builds?
The pro's with new or off-plan builds are that they offer a hands -off approach to investing in Slovakia, no building, renovating or getting your hands dirty. There are also good discounts that can be negotiated if the buildings are off-plan as building work has not yet begun. The con's are that they are usually more expensive than the type of housing the majority of people in Slovakia are used to. This can lead to problems renting the property or selling the property when you wish to take your money out of the investment as they are significantly more expensive. There can also be problems with poor workmanship, having somebody on the ground to snag these problems at the different build stages is essential. There can also be delays with these types of properties, putting stress on finances if you are relying on the completion of a property for rental purposes.

Why have these concrete flats proved to be such a successful investment for you?
The answer to this question is supply and demand, there just isn’t enough affordable housing in Slovakia and many of the newly built properties carry a price tag that is out of reach of the average Slovak citizen. The concrete flats are affordable and are what people are used to and have grown up with. Slovakia’s version of the UK’s semi detached. We buy these units in an old state and re-fit them with modern kitchens, bathrooms and flooring etc and wait for the market to rise. These types of properties are also easier to rent, as they are more affordable to the average guy on the street. The real key to investing in these types of properties is knowing when to buy and when to sell. You really need an ear to the ground as they are mostly advertised locally directly by the owner and in a fast market are usually sold within a day or so.

I have seen cottages for sale in Slovakia for 5000, would this be a good investment?
Probably not. The same rules apply in Slovakia as they do in the UK; if something looks too cheap then it’s been priced that way for a reason. The property could be situated in a small village in the middle of nowhere. It may have building issues e.g., it’s falling down and has no roof. Common sense is the key and you should approach property developing in Slovakia the same way you would in the UK. We do invest in old houses and cottages but tend to invest in properties and land on the fringes of area’s that have already experienced good growth. A good example of this would be Donovaly and Skalka ski resorts in the centre of Slovakia. We have invested in properties and land not on these resorts but very very close to them. The land and old buildings can be purchased very cheaply and as a mid to long-term investment they can prove very profitable. The land on the ski resorts becomes more and more expensive as interest grows and people start to look off piste as a cheaper alternative. An example would be plots of land we purchased in a small ski resort near Skalka called Krahule. They were valued at 7000 per 400 metre square plot in 2006. We are currently selling these plots in 2008 for 22,000 per 400 metre square plot.

I have been looking at ski resorts and apartments, is this a good investment?
There are a number of ski resorts and many slopes in Slovakia; the major one’s being the Tatra Mountains in the east and Donovaly in the centre of Slovakia. The type of property you wish to purchase really depends on the type of investment you are looking for and the time period in which you wish to invest. Tourism is growing in Slovakia though we think it is unlikely it will become a major skiing destination for the British market though visitor numbers are growing. The majority of tourists seem to come from countries within the region of Slovakia like Poland, Czech republic, Hungary, Russia and Germany. If you have ideas of buying an apartment and renting it out at a premium to tourists then there are a number of considerations you need to think about, location being the most important. Email us with your plans and we will be able to assist you in more detail.

You seem to favour building and renovating over a straight financial property investment?
As property developers ourselves we never like to just rely on a rise in the market to add value to our investments. Opportunities arise along the way that allow you to take advantage of rises in the market but ‘adding value’ is the key to any property development. Whether you are building on land, extending a house, converting a loft or just renovating a flat, adding physically to a property if done correctly always adds value to the price of a property in a stable market.

The thought of trying to manage a renovation or build myself abroad is daunting, how do you do it?
We don’t, we are here in Slovakia 365 days of the year overseeing our own projects. One of the main reasons we started our company was to assist other developers in managing their properties and projects. We offer a complete service and can help you manage yours, whether you wish to build a house or just have a new bathroom fitted take a look here for details…

How much money should I invest?
Our advice would be not to over-stretch yourself and not to obtain finance for a property that you are going to have to rely on rental income for to make mortgage payments. An ideal scenario would be an investment of capital. There are lots of properties to invest in from as little as 7000 that have potential to make profit on. We purchased some old studio apartments last year for around 7500 each and spent 2000 on renovating each apartment. These apartments were valued 12 months later in 2008 at 20,600 each.


I am nervous about dealing with a foreign agent, how do I know I can trust them?
Your first port of call before contacting an agent should be to get in touch with us. We can talk through your objectives with you and we can help you through the whole process. There are also a number of checks we can do to make sure your agent is bona fide. Take a look here for more details on the consultancy services we can offer.


Is an off-plan property in Bratislava still a good investment option?
There is always a deal to be done, in every city though when investing in Bratislava in 2008 there are a number of points you should be aware of.

Visit any UK sales agent and you will probably find that they will push you towards a new/off-plan property. They are an easy sale for an agent as everything is detailed in a nice glossy brochure. There are some good incentives to buy these types of property and some nice discounts to be had. When thumbing through your sales brochure or listening to the sales splurge of your property agent, take a step back and think for a minute about how and when you want to cash-in your investment.

If you plan to sell your property in a number of years for a handsome profit then you should really be thinking about who will be buying this property in the future. The average Slovak citizen in Bratislava lives in one of the concrete panel style flat blocks. They are relatively cheap compared to the newer luxury flat complexes that have been popping up all over Bratislava. They are cheap to run and are affordable to the average Slovak family. These types of property are the bulk of the Slovak housing market.

Property Development Company Cresco has recognised this market for cheap affordable housing and has set the ball in motion for developing a huge housing project in Bratislava called South City. This development is one of three projects that aim to build thousands of new affordable flats and houses in and around Bratislava. These properties will be aimed at the lower to mid segment of the market around the 60,000sk per square metre price bracket.

The question you have to ask yourself is this, is your new property investment going to be saleable with all these new cheaper housing projects planned for the future. It’s very easy for an agent to list a property for sale at a certain price but finding a buyer is a different story. We’ve seen over priced properties sit on the market for months and months, even years. The same rule applies to the rental market, are you relying on rental income to pay the finance on your property? Is there going to be a rental market for an expensive flat with all these cheaper options becoming available?

Our advice would be to seriously think about how you intend to take your money out of your investment when you are ready. If you are thinking about a new build or off-plan property then research into the market you aim to sell it too once you are ready to sell. Alternatively give us a call or send us an email.





Slovakia Property Services 2010