Inherited apartment in Poland; not sure what to do

par

Dec 30, 11, 15:22 #1

My grandfather died a few weeks ago and now my family has inherited his apartment. we live abroad and now it is unclear what we should do with this property.

The apartment is quite big for polish standard I guess (~70 square metres) and in a very good neighbourhood in a large polish city (Wroclaw). We are contemplating to eiter sell or rent it out, but in my opinion the latter option would be better as I expect the property prices to go up quite a bit.

If we sell I think we can expect to get ~5.000-6.000 PLN/sqm, I dont know how the possible rent is calculated in Poland and I had little success to find some prices on the internet, what I found are price ranges from 20-47PLN/sqm, thats pretty wide and does not help me a lot to evalute the real value...

Maybe someone can point me in a good direction or tell me about his/her experiences, thanks a lot
god bless you

♂ [Suspended]

Dec 30, 11, 15:27 #2

par:

We are contemplating to eiter sell or rent it out, but in my opinion the latter option would be better as I expect the property prices to go up quite a bit.

Now isn't the best of times to be selling apartments in Poland but prices are unlikely to be going up 'quite a bit' for the next few years. But with that said, do you want the hassle of renting it out?

par:

If we sell I think we can expect to get ~5.000-6.000 PLN/sqm, I dont know how the possible rent is calculated in Poland and I had little success to find some prices on the internet, what I found are price ranges from 20-47PLN/sqm, thats pretty wide and does not help me a lot to evalute the real value...

It's going to depend on where the place is exactly, what it is exactly and the condition it is in. Oh, and how realistic the owner is and whether he has the legal right to rent the place out (and whether he is paying tax on the money).

One thing, you have cleared all this with the tax office in Wroclaw, haven't you? It is probable that the inheritance is tax free but it is only tax free if it is notified to the relevant tax office within the correct time (usually six months but can vary).

♂

Dec 30, 11, 18:28 #3

par:

Maybe someone can point me in a good direction or tell me about his/her experiences, thanks a lot

If you are not in the country, you will have to find a letting agency, then hope they are telling you the truth about the rental. The first question to ask yourself is what could I do with the money if I sold the place, if you are in the USA for example the money would go a long way in the current market conditions. The second question is do I really want the hassle of being a landlord in Poland, you will have to register your income from rental and pay tax in Poland, there will be costs for the flat every month, that you will have to pay wether the flat is rented or not.

par:

The apartment is quite big for polish standard I guess (~70 square metres)

This is not big and I would guess it needs a full remont if an elderly person has been living in it.

par:

in my opinion the latter option would be better as I expect the property prices to go up quite a bit.

What do you base your assumption on Par, Polish real estate prices are on their way down I do not see any fundamental reason for real estate prices to rise quite a bit over the next 2-3 years. I believe you will find most people with a little knowledge of the market expect prices to level out at best over the coming years.

If you send me details of what,where (street ) and an indication of condition of the flat, I can get some info for you.

par

Dec 31, 11, 02:16 #4

Wedle:

If you are not in the country, you will have to find a letting agency, then hope they are telling you the truth about the rental. The first question to ask yourself is what could I do with the money if I sold the place, if you are in the USA for example the money would go a long way in the current market conditions. The second question is do I really want the hassle of being a landlord in Poland, you will have to register your income from rental and pay tax in Poland, there will be costs for the flat every month, that you will have to pay wether the flat is rented or not.

We live in the EU, so the money tranfser would be pretty simple, however we would lose a lot through currency conversion.

Wedle:

What do you base your assumption on Par, Polish real estate prices are on their way down I do not see any fundamental reason for real estate prices to rise quite a bit over the next 2-3 years.

Our apartment is pretty close to the Sky Tower and I think that this building will attract a rather wealthy clientele and no bums - in my opinion this part of town will see good effects from gentrification.

♂

Dec 31, 11, 02:34 #5

Wedle:

What do you base your assumption on Par, Polish real estate prices are on their way down I do not see any fundamental reason for real estate prices to rise quite a bit over the next 2-3 years. I believe you will find most people with a little knowledge of the market expect prices to level out at best over the coming years.

Your talking like a cowboy real estate agent ready to take advantage of somebody who hasn't accessed accurate information, firstly you don't know where and the condition of the apartment, it may be in a perfect location and well maintained. Best advice would be to let it out to family or friends at a norminal price (cover all costs) and wait till the real estate market takes on.. could be a wrong decision to sell just now.

♂

Edited by: okayokok Dec 31, 11, 02:37 #6

@par

I'm heavily invested into Polish real estate so I can comment.

It would be fatal to base your decision purely on the sale price of the flat, whether current or forecast, without including the currency conversion into the currency you use, I assume euro or sterling.

The zloty has just dropped about 20% against both currencies, which means your flat just dropped in value by that much. Don't wait for the sale price to go up, wait for the zloty to strengthen back to levels we saw 6 months ago. I would expect the sale price of central Wroclaw apartments to go up at most about 1% per year for the foreseeable future (next few years), but we might see a 25% gain in the zloty within a year if they fix the euro. If the euro dies, the zloty will be much stronger than the new drachma, lira and paseta that they'll have to start printing, and will have an enviable exchange against the new Deutschmark. So either way, think of yourself as a currency trader, not a realtor.

Certainly, having a nice young couple live there to pay you some rent to cover overheads won't hurt, but your income will be minimal: I would expect about 2500 zloty per month for that size in central Wroclaw, from which you need to pay all your bills. On that note, it always pays to fill the place immediately by discounting the rent. If it stands empty for two months that is equivalent to a 17% loss of rental income per annum, so offer a 10% discount and get people in there immediately.

♂

Dec 31, 11, 02:51 #7

wielki pan:

Your talking like a cowboy real estate agent ready to take advantage of somebody who hasn't accessed accurate information,

I am not a real estate agent.

wielki pan:

firstly you don't know where and the condition of the apartment, it may be in a perfect location and well maintained.

This exactly what I have mentioned in my post.

wielki pan:

Best advice would be to let it out to family or friends at a norminal price (cover all costs) and wait till the real estate market takes on.. could be a wrong decision to sell just now.

It all depends on what you can do with the money, if they have deep pockets and they don't need the money why not keep hold of it. We don't know their financial position.

par:

We live in the EU, so the money tranfser would be pretty simple, however we would lose a lot through currency conversion.

Here is a link with prices of flats next to sky tower http://mieszkania.trovit.pl/sky-tower-wrocław

Why wuld you loose money through currency conversion?

♂ [Suspended]

Dec 31, 11, 02:52 #8

par:

Our apartment is pretty close to the Sky Tower and I think that this building will attract a rather wealthy clientele and no bums - in my opinion this part of town will see good effects from gentrification.

It depends on exactly where it is. Don't assume that the building will attract wealthy clientele - such people tend to steer clear of older flats in Poland, and they certainly won't be interested in a flat owned by an older person.

As for gentrification - unlikely in the short term. For instance, there are plenty of horrible Communist-era flats near Powstancow Slaskich with equally horrible inhabitants - and the older buildings are equally full of horrible people there. After all - much of central Wroclaw is still to be gentrified - this area is just too far out. Sky Tower won't change much - there are a lot of nice areas not far away from it (but not close), after all.

okayokok:

I would expect about 2500 zloty per month for that size in central Wroclaw, from which you need to pay all your bills.

Not going to get 2500zl/month from a flat of that size near Sky Tower at the moment. 1500zl/month would be more realistic.

♂

Dec 31, 11, 02:53 #9

okayokok:

), but we might see a 25% gain in the zloty within a year if they fix the euro. If the euro dies, the zloty will be much stronger than the new drachma, lira and paseta that they'll have to start printing, and will have an enviable exchange against the new Deutschmark. So either way, think of yourself as a currency trader, not a realtor.

Doubt if this would occur for a few good years. The US dollar has always been around the 3zl mark, no matter how good the economy is in Poland this will not change. In the short term Poland will look to having increased unemployment.

♂

Edited by: okayokok Dec 31, 11, 03:18 #10

Par says they live in Europe, which would suggest the dollar is irrelevant to them.

With respect, you're not quite right about the dollar. Take a look at the 10-year USD/PLN http://www.xe.com/currencycharts/?from=USD&to=PLN&view=10Y

It shows that from early 2004 to early 2008, the Polish zloty doubled in value against the dollar, meaning all Polish assets including apartments had a capital gain in dollar terms of 100% in four years, plus sale price inflation.

For the last two years or so we've been swinging between about 2.7 to 3.5, another return to 2.7 would be a more than 20% capital gain. There is no way sale prices will rise like that any time soon. I rest my case: foreign owners of Polish real estate should thin of themselves more as currency traders, than landlords. The end result of the euro crisis is the most important factor.

If you read the news you'll know the Polish government intervened at least twice this week to strengthen the zloty, which enables it to manage foreign-denominated debt. A zloty-strengthening cycle is entirely likely right now.

♂

Dec 31, 11, 03:29 #11

okayokok:

I would expect the sale price of central Wroclaw apartments to go up at most about 1% per year for the foreseeable future (next few years), but we might see a 25% gain in the zloty within a year

okayokok:

I rest my case: foreign owners of Polish real estate should thin of themselves more as currency traders, than landlords.

So based on the above your strategy would be to liquidate your real estate holdings and trade the PLN-Euro/USD/GBP for the foreseeable future.

♂

Dec 31, 11, 03:57 #12

Nope, I have properties whose mortgages are paid for by tenants so I've no interest in liquidating that arrangement at the moment.

The difference is that Par appears to own the property outright from inheritance: so yes selling now, holding zloty cash and then waiting for the zloty to strengthen would be more profitable than holding on to the flat in the hope of a significant price rise.

Prices doubled in 2004/5 on the Polish credit boom. There won't be credit-driven price growth any time soon. But there will be currency strengthening.

♂

Edited by: Wedle Dec 31, 11, 04:07 #13

okayokok:

The difference is that Par appears to own the property outright from inheritance: so yes selling now, holding zloty cash and then waiting for the zloty to strengthen would be more profitable than holding on to the flat in the hope of a significant price rise.

So basically, if I understand you correctly if you inherited 1 Mln PLN today, you would not touch Polish real estate, you would play the currency market PLN/-USD/EUR/GBP. Just trying to get the facts straight.

okayokok:

Prices doubled in 2004/5 on the Polish credit boom. There won't be credit-driven price growth any time soon

Exactly, nothing to do with supply and demand, driven by easy access to finance.

♂

Edited by: okayokok Dec 31, 11, 04:38 #14

Let's not conflate my recommendations for Par with my own situation.

Par lives outside Poland and has inherited property in Poland outright, and sooner or later wants to get money out of Poland.

I live in Poland and have buy-to-let property here, and don't have any good reason to get money out of Poland.

The two circumstances are very different indeed.

If I was in Par's shoes I would sell up sooner rather than later, and certainly not hold out hope for a second Polish housing boom.

Given that I live in Poland, and have investment property on credit which has already doubled in value, I would use an inheritance in a different way. I would probably get myself a nice house in the country, or a place somewhere else in Europe. God knows - it's conjecture.

♀

Dec 31, 11, 06:43 #15

par:

My grandfather died a few weeks ago and now my family has inherited his apartment. we live abroad and now it is unclear what we should do with this property.

Since your grandfather passed away only few weeks ago, I assume, you don’t have any legal papers from the Polish court yet (no, I don’t mean the will your Grandfather left). You have to get Postanowienie o Nabyciu Spadku from the Polish court where all beneficiaries will be named. You will be surprised but even if someone is not in the will, she/he may be eligible, according to the Polish law, to receive zachówek (financial compensation from all beneficiaries named in the will). Judge will decide. The legal process to get Postanowienie takes months. If there is no will the legal process is even longer.
Once you get the Postanowienie you need to contact a tax office that will classify all beneficiaries into a specific tax group (no, it doesn’t matter that you are not a Polish taxpayer). All in group 1 don’t have to pay an inheritance tax, all others will have to.
And only when you have Postanowienie and a clearance from the tax office this apartment is legally yours. Without these papers you can't do much with it.
I am in the middle of the same process. It took me 14 months to get the Postanowienie o nabyciu spadku. I live in Canada and had to hire a lawyer in Warsaw.

Good luck. It is not easy. Could be that when you are done with all this legal sh.. apartment prices may go up again. :)

MEMBER ♂

Dec 31, 11, 08:37 #16

okayokok:

The zloty has just dropped about 20% against both currencies,

It swang 17% within three months over the past year against the GBP, and another 14% later on if i remember rightly.

delphiandomine:

Not going to get 2500zl/month from a flat of that size near Sky Tower at the moment. 1500zl/month would be more realistic.

They'll get 2500 and more if its in good condition. Ive had 2000 from 50 m2 flats in not so nice areas.

par:

I think that this building will attract a rather wealthy clientele

Is it a kaminica, old block or new build.

♂

Edited by: wielki pan Dec 31, 11, 09:22 #17

okayokok:

If I was in Par's shoes I would sell up sooner rather than later, and certainly not hold out hope for a second Polish housing boom.

what utter nonsense, the fact remains that property investments is the most secure form of investment, sure there may be a down side but that's the nature of the investment, to rely of currency fluctuations is to open a new can of worms, I've know people who were set on fire at the thought of dealing with the currencies market that they are now either bankrupt or with there maker as the stress was too much, you my good sir are in the same boat if you continue with such nonsense.

par

Dec 31, 11, 10:36 #18

Zazulka:

Since your grandfather passed away only few weeks ago, I assume, you don’t have any legal papers from the Polish court yet (no, I don’t mean the will your Grandfather left). You have to get Postanowienie o Nabyciu Spadku from the Polish court where all beneficiaries will be named. You will be surprised but even if someone is not in the will, she/he may be eligible, according to the Polish law, to receive zachówek (financial compensation from all beneficiaries named in the will). Judge will decide. The legal process to get Postanowienie takes months. If there is no will the legal process is even longer.
Once you get the Postanowienie you need to contact a tax office that will classify all beneficiaries into a specific tax group (no, it doesn’t matter that you are not a Polish taxpayer). All in group 1 don’t have to pay an inheritance tax, all others will have to.
And only when you have Postanowienie and a clearance from the tax office this apartment is legally yours. Without these papers you can't do much with it.
I am in the middle of the same process. It took me 14 months to get the Postanowienie o nabyciu spadku. I live in Canada and had to hire a lawyer in Warsaw.

Good luck. It is not easy. Could be that when you are done with all this legal sh.. apartment prices may go up again. :)

We are doing the paperwork for at least two years now - our first intention was to transfer the apartment to my mother as long as my grandfather was still alive, unfortunately the court has already opened a case after my grandmother died in 2009...

Its horrible how many documents you have to provide in Poland, we have still to go zu the ZUS, PZU, urzad skarbowy, urzad cywilny and a few other. I know that we wont be able to do anything in the nearest future (like 6 months or so), but getting some information as soon as possible might be helpful to make a tough decision.

What bothers me most, is the growing unfriendliness towards foreigners - people try to scam you whenever its possible, example: at the parking strzezony I am asked to pay different rates every time I go there, varying from PLN30 to PLN40 a night - my uncle never pays more than 20.

From that point of view I am not really interested in owning property in Poland, but selling for a low price looks like a bad idea to me. We dont need the money and for the sale price we would not find a decent piece of property here in Germany without taking out a loan.

So far I want to thank everybody for their ideas and comments!

par

Dec 31, 11, 10:45 #19

Wedle:

Here is a link with prices of flats next to sky tower

Thank you for the link, this website has some apartments pretty similar to the one we own, but the sqm-prices are pretty wide.

Wedle:

Why wuld you loose money through currency conversion?

First of all the conversion rate PLN-EUR is not as good as it was in the past, we would have to pay a conversion fee and I guess the money transfer to our country would be connected to more paperwork (money laundering, maybe taxes...)

♂

Dec 31, 11, 11:19 #20

wielki pan:

what utter nonsense, the fact remains that property investments is the most secure form of investment, sure there may be a down side but that's the nature of the investment, to rely of currency fluctuations is to open a new can of worms, I've know people who were set on fire at the thought of dealing with the currencies market that they are now either bankrupt or with there maker as the stress was too much, you my good sir are in the same boat if you continue with such nonsense.

WP, this is the second time on this thread you get yourself into a spat, people follow different investment approaches, some are passive like yourself others are a little more aggressive like okayokok, it would also seem OK is prepared to back his argument with third party facts, I see nothing from you except your emotional POV.

PeterWeg03

Dec 31, 11, 11:50 #21

par:

First of all the conversion rate PLN-EUR is not as good as it was in the past, we would have to pay a conversion fee and I guess the money transfer to our country would be connected to more paperwork (money laundering, maybe taxes...)

You could do it all in cash and then the cost will be less than 0.5% from the mid rate. Its a lot of hassle though.

I was under the impression that property near the Polish border is significantly cheaper in Germany than Poland.

par	Dec 31, 11, 14:40 #22
Wroclaw Boy: Is it a kaminica, old block or new build. Its a kamienica, 4 or 5 floors, no lift. Building is in ok shape, apartment has new windows (plastic), but would definitely need new floors, walls painted, a new kitchen and new doors.

♂

Dec 31, 11, 14:43 #23

par:

The apartment is quite big for polish standard I guess (~70 square metres) and in a very good neighbourhood in a large polish city (Wroclaw). We are contemplating to eiter sell or rent it out, but in my opinion the latter option would be better as I expect the property prices to go up quite a bit.

your assumption that property prices will go up is quite baseless - actually property prices are falling at the moment and the simple reason is the lower number of buyers (lower demand) - if you thought that there was no property bubble in Poland think again - the prices of property have doubled or tripled since 2000 - if you don't call it a bubble I don't know what to call it - it was not devastating as in the US for one simple reason: the availability of credit (no case of granting mortgages for jobless people like in the US) and generally low availability (because of the price) of mortgages before 2000 - because credit in PLN was expensive there was a run for mortgages in CHF and EURO (even JPY)

as for renting out while not in the country - you would have to use Polish solicitor which can prove to be relatively expensive (Poland has one of the lowest affordability of legal services in Europe) - anyway if you consider renting out aim for corporate entities

as for exchange rates - zloty (PLN) is pretty much sure to lose a lot and the 5 PLN per EURO is not an unrealistic scenario untill the end of the next year

SabreesThreads: - Posts: 2 Joined: Feb 11, 12 ♀	Feb 11, 12, 22:59 #24
Zazulka: You have to get Postanowienie o Nabyciu Spadku from the Polish court where all beneficiaries will be named. Can you contact me private, I have question re inheritance of property in Poland.

SabreesThreads: - Posts: 2 Joined: Feb 11, 12 ♀	Feb 11, 12, 23:08 #25
I need to find out what is the procedures for obtaining a home in Poland that was left as inheritance after the passing of my father. I live in the US. Thanks

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