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Buying a property in Poland to rent out from the UK


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paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 7, 11, 16:07    #1
Me and my partner (who is a Polish national) want to buy an apartment in Gdansk and rent the apartment out whilst living in the UK.

Does anybody have any experience of this.

I am trying to understand the process that I will have to go through and how difficult this may or may not be. Also any problems that I might encounter.

Any information based on personal experience of this would be useful.

Thanks

Paul K
EdWilczynskiThreads: 3
Posts: 163
Joined: Jun 6, 11 ♂ 		 Jul 7, 11, 16:27    #2
Yup ........and unless you have someone to manage it for you, you are setting yourself up for a fall.
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 7, 11, 16:36    #3
it is not that difficult. are you buying "shell and core" or has the fit out been done already? I would suggest somebody to take care of it- doesn't have to be a company, you can probably find somebody in the area to tend to things when necessary. Payment can be made directly into your account and you need a good rental contract.

btw (I am a Canadian interior designer working and living in Warsaw- I have an amazing carpenter who can fit your apartment out from top to bottom if necessary)
paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 7, 11, 16:55    #4
We will have somebody to manage it for us. Where did it fall down for you? I'm after honest info so bad experiences as well as good are helpful. Thanks for you reply.
warszawskiThreads: 60
Posts: 2,389
Joined: May 21, 10 ♂ 		 Jul 7, 11, 17:05    #5
paulkaczmar:
Thanks for you reply.


Paul, I was advised to buy into this project about a month ago, their prices are good and I have bought from the developer in Warsaw

http://www.budner.pl/en/aktualna-oferta-mieszkan-sloneczne-wzgorza

Good luck
paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 7, 11, 17:14    #6
How did you get on with the developer? Did you buy from the UK or in Poland?

Thanks I'd already spotted this development. I will send you the details of another one later.
warszawskiThreads: 60
Posts: 2,389
Joined: May 21, 10 ♂ 		 Jul 7, 11, 17:24    #7
paulkaczmar:
How did you get on with the developer? Did you buy from the UK or in Poland?


I got on great with them, they are based in Warsaw so it was easy for me to walk in their office. I know for a fact that the company is cash rich and they have projects lined up for the next three years. The only reason I did not get involved in the Gdansk project is because I decided to buy land instead, but this is to build, not to resell.
paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 7, 11, 17:31    #8
So are you based over there? This would be my first investment. What I'm trying to get my head around is how easy it is to do this from the UK.

Thank you though most helpful!
milkyThreads: 10
Posts: 1,229
Joined: Oct 26, 09 ♀ 		 Jul 7, 11, 17:43    #9
Buying a property in Poland????????????????????

Are you sure????????,read this page


Foreign investor, properties in Poland, walk away from mortgages?
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 7, 11, 18:10    #10
the problem in the link you provided is that the mortgage was in swiss francks. property in Poland is a good investment- if you know what you are doing and if your contacts are honest.
we have a rental property in Puck and have zero problems maintaining it.
milkyThreads: 10
Posts: 1,229
Joined: Oct 26, 09 ♀ 		 Jul 7, 11, 20:45    #11
pip:
the problem in the link you provided is that the mortgage was in swiss francks

And he bought at the peak of the property bubble{a tiny factor that deserves a mention, lol}
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 7, 11, 20:50    #12
milky:
And he bought at the peak of the property bubble{a tiny factor that deserves a mention, lol}


we bought at the peak also, but went against the banks advice and stayed in zlots. (my husband is an economics major) that is the difference. you can ride out a peak and a dip if your in the local currency- if your mortgage payments quadruple it is a bit more difficult to ride out.
warszawskiThreads: 60
Posts: 2,389
Joined: May 21, 10 ♂ 		 Jul 7, 11, 21:00    #13
paulkaczmar:
What I'm trying to get my head around is how easy it is to do this from the UK


If you have a connection to Poland, your wife or girlfriend, and your idea is a property for the long term, then it is easy, bcus you have someone that speaks the local language and you have a reason to buy. If it is for pure speculation, then it would probably be better to stay close to home.
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 7, 11, 21:49    #14
warszawski:
If you have a connection to Poland, your wife or girlfriend, and your idea is a property for the long term, then it is easy, bcus you have someone that speaks the local language and you have a reason to buy. If it is for pure speculation, then it would probably be better to stay close to home.


this is a very important point.
And don't take a mortgage in a foreign currency like the swiss frank.
SeanBMThreads: 41
Posts: 8,727
Joined: Mar 10, 08 ♂ 		Edited by: SeanBM  Jul 7, 11, 22:28    #15
paulkaczmar:
Any information based on personal experience of this would be useful.


Standard of finish.
Firstly there are different standards of finish in all ex-communist countries.
So depending on what you buy and how good the person looking after the property is and the people who fit it out are, is beyond your control.
Like everywhere, you can get cowboys in to do the works and it all blow up in your face.

Then you will have to get someone to furnish it.
All these are extra costs ontop of the price of the apartment (this is changing).

Connecting to utilities.
You will have to sign up with the dreadful electrical company Enion, that means you have to go to their office with every single paper and go through "the process", you can't just give them money, oh no!
Same with the water and gas companies.

P.O.A.
I am guessing you are leaving the apartment to someone you know and trust to look after.
If so you should go to a Notary here in Poland and give them power of attorney to preform utility functions. I recommend you do NOT go to a lawyer, lawyers here are very different to those in the U.K. and the Notary might not accept a lawyer's "interpretation" of what a POA is. Plus Notaries are cheaper and even if you do go to a lawyer, he will just write a letter and send you off to the Notary.

The almighty stamp.
Keep all your paper work. Just put it in a folder and keep it somewhere safe. I know it sounds easy but the amount of people who are not used to paperwork and then waste time getting original copies, is silly.

I like the wording "original copies".

Internet banking.
It is crucial you get a bank account here in Poland, make sure that their internet banking is in English, unless you prefer to leave that end of things to your other half.

Terms and conditions.
I don't know you, so I will talk as if you know nothing, the contract for your purchase is very important, terms and conditions, penalty fees for being late, a list of what finish the investors will provide, payment schedule etc...

Tenants.
Tenants will hardly ever look after your property very well, so use durable materials.
I would avoid first or second year students (partying hard) and women with childeren can register in your apartment and you could have to buy them out (but in fairness I have never actually come across this).

I also recommend you visit about once a year to keep tabs.
armadaThreads: -
Posts: 4
Joined: Nov 26, 08 ♂ 		 Jul 14, 11, 16:40    #16
Hi Paul
I’ve been investing in Poland for 6 years. For myself and on behalf of 7 other investors. Together we now have 36 apartments.

Your intention to invest in Poland is wise considering the UK situation. However it could be a great success or a disaster.

You have the right idea by asking around before leaping in.
Firstly, in my view, now is a good time to invest in Poland. The Polish economy is one of the best in Europe but because of the cultural negative mentality property prices are depressed.
The property market is stagnant (sellers are holding out for higher prices and buyers are holding out for lower prices!!) so bargains are out there if you know where to look.

You query the process: The initial buying process is more straightforward than in the UK (you can even get a mortgage based on UK income.) Early in the process you simply need to set up Power of Attorney, obviously with someone you trust but equally importantly with someone you have actual experience in doing what you want. The expression "loose cannon" is very relevant in polish mentality. So an important decision.

Thereafter can come the difficult part.

I assume Gdansk is chosen because your partner has family there.
You say “We will have somebody to manage it for us. This person is the most important to get right. there are many questions to ask this person. If it is family be doubly careful.

The most important aspect to understand is that the people involved in the process (Estate agents, lawyers, builders, letting agents etc) don’t have the same level of competence and standard of ethics you automatically expect in the UK.

I agree with the points Sean makes, particularly regarding lawyers. I now exclude them from the picture completely.

The property mantra is “ location location location”
In your case add Ryanair!! Choose a location you can cheaply visit several times a year.

I go every month and despite constant use of Skype and phone calls to maintain communication there’s nothing better than face to face.

CT
milkyThreads: 10
Posts: 1,229
Joined: Oct 26, 09 ♀ 		 Jul 14, 11, 17:00    #17
armada:
The property market is stagnant

WHY ???????????????????????????????
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 14, 11, 17:21    #18
because the prices are inflated and the market is saturated.
paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 15, 11, 17:11    #19
Armada that's great stuff thank you. Her best friend is a bank manager and already owns 3 properties in the Gdansk area. She will be managing it for us and lives on the same street as the property that we are interested in.

As far as mortgages go Deutsch Bank are offering a mortgage in Euro's at 1.9%. Do you have any views/opinions on this?

Thanks

Great Stuff!
delphiandomineThreads: 42
Posts: 9,954
Joined: Nov 25, 08 ♂ [Suspended] 		 Jul 15, 11, 17:27    #20
armada:
Firstly, in my view, now is a good time to invest in Poland. The Polish economy is one of the best in Europe but because of the cultural negative mentality property prices are depressed.


One of the best? It grew by 1.7% last year - hardly worth shouting about.

As for the mentality causing depressed property prices - sorry, but that's nonsense. If it was true, why are prices actually on the high side (compared to income) in major Polish cities?
JonnyMThreads: 16
Posts: 4,487
Joined: Mar 9, 11 ♂ 		 Jul 15, 11, 17:30    #21
armada:

Firstly, in my view, now is a good time to invest in Poland. The Polish economy is one of the best in Europe but because of the cultural negative mentality property prices are depressed.

I would wait. Prices are inflated at the moment, especially in big cities. They have been slowly falling, but there is still some way to go.
pipThreads: 11
Posts: 1,293
Joined: Jul 4, 11 ♀ 		 Jul 15, 11, 17:41    #22
paulkaczmar:
As far as mortgages go Deutsch Bank are offering a mortgage in Euro's at 1.9%. Do you have any views/opinions on this?


my husband has a mortgage in Euros. I think it is a safe bet but also he watches it. The moment it drastically spikes he is going to pay the entire thing off by taking a loan in zlots. He is also in real estate an stalks the currency rates.--living abroad you probably won't have this option.
paulkaczmarThreads: 5
Posts: 14
Joined: Jul 7, 11 ♂ 		 Jul 15, 11, 17:43    #23
JonnyM

I know it's extremely difficult to predict but how far would you say they will fall and over what time period.

To put it into a better perspective we intend to try and sit on a property for around the 10 year mark then sell. Even if we get what we paid for it we'd still get the equity back essentially using it as a bit of a piggy bank.
JonnyMThreads: 16
Posts: 4,487
Joined: Mar 9, 11 ♂ 		 Jul 15, 11, 17:46    #24
paulkaczmar:

I know it's extremely difficult to predict but how far would you say they will fall and over what time period.

I wouldn't like to say, but unless salaries increase in Poland, we should expect a sharp fall sometime soon.
paulkaczmar:
sit on a property for around the 10 year mark then sell.

That's not a bad idea - but I would wait a little before buying. Especially as the zloty is strong now.
delphiandomineThreads: 42
Posts: 9,954
Joined: Nov 25, 08 ♂ [Suspended] 		 Jul 15, 11, 17:48    #25
paulkaczmar:
I know it's extremely difficult to predict but how far would you say they will fall and over what time period.


They may not fall much at all - salaries keep rising, the EU is still pouring a lot of cash in, Poland is investing - in general, it's not a good market to predict at all.

I'd say - if you're happy with the price and have the money to pay for it - buy and don't check the prices of similar flats after you've purchased.

paulkaczmar:
As far as mortgages go Deutsch Bank are offering a mortgage in Euro's at 1.9%. Do you have any views/opinions on this?


Yes - don't do it. The GBP/EUR (and by extension, PLN) rate has been swinging all over the place since 2004 - the PLN alone went from 7 to 4.1, then to 5.5, then kept swinging between 4.4 and 4.8 in recent times. I'd actually recommend trying to get a GBP mortgage - especially because no-one can really predict how the GBP/EUR relationship will go.
Wroclaw BoyThreads: 57
Posts: 5,478
Joined: Jul 3, 09  Pictures: 2  Gold Member MEMBER ♂ 		 Jul 15, 11, 18:13    #26
Dont buy anything in a Polish city now, wait a few more months, see what happens.

armada:
The Polish economy is one of the best in Europe but because of the cultural negative mentality property prices are depressed.

Gotta love the investors talking it up.

The main reason the market is stagnant is becasue of its unprecedented growth from 2005 - 2008. It is only Poland after all.
milkyThreads: 10
Posts: 1,229
Joined: Oct 26, 09 ♀ 		 Jul 15, 11, 23:21    #27
armada:
Together we now have 36 apartments.

I bet you have!!!
armada:
The Polish economy is one of the best in Europe but because of the cultural negative mentality property prices are depressed.

LOL
MidasThreads: 2
Posts: 788
Joined: Jul 19, 10 ♂ 		 Jul 18, 11, 12:25    #28
Guys, guys, guys... ( and girls ).

Plz read up on this VERY carefully:

Foreign investor, properties in Poland, walk away from mortgages?

Especially the part regarding the mortgage payment / rental income ratio.

Granted, guy bought them when the prices were rather high.

The Polish real estate market ( apartments most of all ) is pretty much cornered by the banks nowadays, they cover both sides of the fence. You can expect a "less stagnant" market if and only when the banks that are present in Poland relax their lending policies. Because of the factors present globally that is very unlikely to happen anytime soon.
milkyThreads: 10
Posts: 1,229
Joined: Oct 26, 09 ♀ 		 Jul 18, 11, 13:10    #29
Midas:
is pretty much cornered by the banks nowadays,

The banks will not lend, because they know property prices are inflated by at least 50%.
http://www.google.pl/search?client=firefox-a&rls=org.mozilla%3Apl%3Aof ficial&channel=s&hl=pl&source=hp&biw=1296&bih=639&q=polish+property+bu bble&lr=&btnG=Szukaj+w+Google

Either the prices start to drop drastically, or Polish wages(explode) go up. When one of 'these' happens, the banks will lend,and I doubt wages will go up in this current climate. Prices are stagnant since late 2007 because it's a stalemate, and the big players are in denial or running for the hills or posting brown envelopes to politicions/journalist.
HarryThreads: 62
Posts: 8,508
Joined: May 2, 07 ♂ [Suspended] 		 Jul 18, 11, 13:48    #30
milky:
The banks will not lend, because they know property prices are inflated by at least 50%.

Good to see that you're back to your old ways Mark. Could you perhaps let us know when this 50% drop is going to occur? It’s just that, under your various usernames, you’ve been predicting a 50% crash in prices for some three years now. But instead of a crash, we’re actually seeing prices in most segments going up and going up by more than the rate of inflation in some segments in some markets.

milky:

Either the prices start to drop drastically, or Polish wages(explode) go up. When one of 'these' happens, the banks will lend,and I doubt wages will go up in this current climate

Sorry Mark but it doesn’t work like that. If prices go down too far, banks are hideously over-exposed. This means that they would lend enough to prevent prices from too far down. But of course prices are not going down: because demand is huge.

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