Advice on what Polish city to invest in....

Hello,

Me and my girlfriend are looking to invest in 2 flats/apartments in Poland around Septeber 2007. A few locations are of paricular interest to us, which are.....

Krakow, Poznan, Gdansk or maybe Wroclaw??

can anyone recommend where would be best to invest in?
When we buy would you recommend that we rent for 12-24months then sell, or just buy and resell straight away?
Is it best to get finance in England or Poland?
How big would you advise? We read that 40-50sqm is a good size if you want to make good money....any suggestions?

Thanks,
Nick

My suggestion would be Gdansk or Wroclaw. Why? Because these two cities are now developing very fast, and moreover they were choosen to host Euro 2012 so there will be additional impuls for economic growth.

That could also be the reason the properties are way overpriced already...

It is a lot cheaper in the 'polish market' since my girlfriend is polish we will be buying from there and not from the english/european market which tends to be more expensive.

Everyone on this forum seems to be interested in Wroclaw. How come you wouldnt advise Krakow since this is quite a well-known city? I've seen prices and they dont seem too bad.

Not really, because Poland has been host of Euro 2012 for a couple of days. Do you really think properties in Poland are overpriced? I doubt it. In ten years prices are gonna by 2-4 times bigger than what they are just now.

wroclaw rocks and is a beautiful city, but us people from Wroclaw are biased.

Not really. Prices in Poland are often already higher than in Germany and there's no way that they will reach for example British level, there's simply no rational reasons for that. I'm not saying that soon they will fail down, but they will be growing slower or fast but then in a few years will fail down seriously after all these "investors" realize that they just can't grow anymore and begin to sell.

Then Poland will be called "ForeignLand" as the property owners will not be Polish, but foreign. If today an average Pole would have to pay the mortgage for an apartment in the city for 30 years, do you think in 10 years they'd have to pay off their apartment for two generations? Highly doubt it..

Check out Gdansk, by the sea.

I think Giles is right, there is a lot of talk about the tri-cities. If its not working well finacially, you could always go beach combing for amber? If nothing else it would be a good side line!

Well, in Calgary where prices go up even faster than in Poland, people pay mortgage for 15-20 years, and they are much wealthier than Polish

Does it mean that in Calgary the prices in 10 years will be 4-5 times higher than they are now? So if I buy an apartment in Calgary today for 100K, in 10 years I could sell it for 500K? That's like winning a lottery ticket.. In Poland there's the same hype and only bankers and real estate agents win in the end [they get the money today, the speculant buyers get only dreams for a better tomorrow].

you can't buy anything in Calgary now for $100,000

my friend has a house in Edmonton, Alberta she bought it about 6-7 years ago for $150,000 now it is worth $600,000 . the market is red hot in Western Canada.

However in Eastern Canada like Windsor you can't give a house away. i have a friend there who is selling his house below purchase price.

Poland's real-estate prices will continue to increase as Poland's economy improves and as people's standard of living increases

"My girlfriend and i "

Nick,

There is so "sure bet" when it comes to property investing and if a sales man tells you the opposite then start walking in the opposite direction.

Krakow (along with Warsaw) is one of Poland's primary cities for property.

If you buy in September you'll be buying into a market that has grown phenomenally over the last few years so don't expect any bargains. However, prices are continuing to rise so you can still make money. I don't know your budget but the Old Town is ridiculously expensive but frustratingly the best place to buy. Investors are now starting to look at the areas south of the Old Town, across the river.

Another possibility is to buy something small near the university to rent out to students.

I don't know much about Poznan except that it hasn't enjoyed the spectacular price growth of Krakow and Warsaw and that alone makes it a better prospect (although it does lack the sexiness of those two cities).

Wroclaw would be an excellent choice. Lots of foreign investment pouring in. I believe LG Philips have signed a contract to open a plant nearby. The Old Town has been beautifully restored and with Wroclaw also being a university town then student tenants are again a possibility. It's also popular with tourists-a lot of Germans like to visit and get misty eyed at their lost slice of the Fatherland.

Gdansk and the Tri City in general is also a good prospect. A lot of Westerners don't realise how high the prices already are in this part of Poland as it doesn't attract the same kind of attention as other places.

Another option is the holiday resort town of Zakopane. The one thing holding it back in my opinion is the lack of road infrastructure surrounding the town (it's a national park after all). If the government can find a way of getting round this then I expect prices will rocket.

Be careful with Wroclaw. Because of EURO 2012 the shape of the city will change. New airport/larger airport, new stadium. It is already changing with new roads and shopping centres. For max profit do some research with someone who knows the city. A choice property now could be in the wrong location in the next five to ten years.

Interesting about your location in Krakow. We were advised to look in the old town...we will now have a look a little South to see what it's like there!

My girlfriend is from Poznan and she has a house there and made a fortune on this already, however she did buy it about 3 years ago. She knows the owner of a property investor in Poznan so its certain we will be buying there at preferential rates :)
By the way, I went in March and it's really really nice. We also went to Zakopane and that too is lovely which is one of the reasons we want to buy in Krakow...only 1hr 30mins minibus ride for a very negligable fee to the ski resort!

How do you go about renting out? I take it you get an agent to do this? Would it be advisable to fully fit out the apartment because im not sure i trust some stranger to look after all of our nice furnishings!!?

My girlfriend and I are looking for a property in Gdansk also, not as an investment but as a second home we love the city and have no immediate intention of resale. However, finding property seems very difficult could anyone recommend a good estate agent? Thanks in advance.

Litigate,

I have a good contact based in Gdynia who has extensive knowledge of the Tri City market.

If you email me then I can pass your details onto her.

Hi NickAnna,

Most of the experts predict Poznan and Lodz to see the best capital appreciation over the next 2 years.

I'm sure that property prices will rise in Warsaw and Krakow, and the other major cities, but the prediction is rises of around 15-20% per annum, whereas Lodz and Poznan are expected to see rises above 30%.

You're right in the size of apartment being the best for investment ... 40-60sq.metres is the range to go for, preferably on a higher floor, south facing, and close to good communication links.

I have bought in Poland myself, and will be investing in more apartments over the next few years. I also help other investors buy property/land in Poland and have a good network of partners in Poland.

spiritus,

does she have a website / company name?

The company she works for has a website but as a real estate broker she has a large amount of independance from this company. I'm happy to provide you with all the contact details but would prefer you to email me (or I email you) as I don't want to abuse the forum by advertising companies on it. My email address is info@spiritusagency.com

Mods, if I am out of line then please correct me.
---
You're fine. Admin

For what it's worth, I was in Poznan when Euro 2012 was announced. I had offered the full asking price of 3 million Zl on one property, and 3.2 m Zl on one with an asking price of 3.5. The next day, the 3 million one had gone to 6.4 million and the 3.5 m one to 5 million. Basically, no-one wants to sell all of a sudden.

So if you can buy in Poznan at sensible prices do so, but be aware that it is all very frothy there at the moment.

Jeez! Well its a good job we know someone who owns a property development company and so we will be able to get a good deal..
I take it you didnt buy them then?!

Warsaw offers the best long term capital growth.

Could you help me out with your experience & contacts please Polanglik
? (I'm at damo33@lycos.com)

I have visited Poland 3 times now, in the past 2 years, & went down in expectations from Warsaw, to Krakow, to Poznan last week, but all seem just athat bit too expensive, compared to (actaul) rental yeilds. Ie, a 50m apartment, off plan, ready in 2009 by the big tesco ws 9000zl per meter, ie, 75k sterling, & the rent just isn't there to cover that. Even with an interest only mortgage, from the UK, you'd need to be getting 500e per month to pay just the interest, & thats double what totday's Poznan tenants will want to pay.

I've opted for the smaller city of Bydgoszcz, noth of Poznan. Its small, seems nice, is a little boring, but has the right ingredients it seems for real growth. I found a place of 101m for 250,000zl, or 47k, which seems very cheap to me. Can anyone offer me woirds of wizdom before I go ahead? its 1mile from teh square, & next to a university.

Thanks,

Damian

ps, if anyone wants help with Romanian investment, let me know. I have a small portfolio there & am building 4 villas over the next 24 motnhs. I have plenty of good contacts should anyone need them. In Poland though, I'm just starting, so would welcome any advice.

I sent you an email ...

Happy to help :o)

Nick and Anna

this was a good post and you have had some really good advise

i bought 2 flats south of krakow, the first 18months ago, it is let out from day 1, does not earn much income but does show a yield of about 7% - the property value has increased by about 50% in the 18 months, so i will be getting 10% yield in a year or 2

the seond flat i bought a week or so ago, i have a tenent waiting to move in for 2 years

to answer your question, krakow is for me the first choice, it is a great city, how ever property prices have already shot up too far, you will not get a good yield

best to purchase in smaller towns, there are few flats to rent, but always someone looking, - i have gone for studios, great for 1 or 2 people and the management fees are low, so i get a higher rent, you dont get much more rent for bigger flats as the managment fees are higher

polish property price are set to rocket, they no where else to go, as they are rock bottom now.

you will need a good agent to manage the properites, i have a good one

you will need to do the purchase in person, with a translator, pay in full in cash, with a notary, and then visit each utility in person to sign over from the present owner to you

again you need a good agent

if you would like to chat please post reply or email nick280403@hotmail.co.uk

regards

I am moving to Gliwice in October. Anyone know anything about the sort of price I can expect to pay for a house outside of town?
Ta very much!

I was wondering why nobody had mentioned this before. The capital city and economic headquarters, but with still only a meagre five percent of the population ?

Other capitals in the region such as Prague and Budapest have somewhere like 18-22% of the population, and looking closer to 'home' , London and Dublin account for 25% of their people.

Add to that upto a hundred thousand a year migrating TO Warsaw, and it's still the best bet in my opinion.