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Ideas how to invest sum of 500,000ZL in Warsaw - real estate is recommended?


Aviv 2 | 5
21 Oct 2014 #1
Hello, Im planning to move to Warsaw and would like to invest sum of 500,000 zloty in order to get passive income that will help me during adaptation to the city etc. If someone has already experience with investments there, I would be grateful to discuss with) Real Estate investment is recommended to do nowadays in warsaw? how much yield is expected in center of city?
terri 1 | 1,665
21 Oct 2014 #2
For that money, you will definitely not buy any real estate in Warsaw. Have a look at the prices of normal flats.
If you invest it in a bond with a bank, the yield is approx 1.5%
OP Aviv 2 | 5
21 Oct 2014 #3
Hi Terri, how do you define "normal flats"?
Monitor 14 | 1,820
21 Oct 2014 #4
I guess she thinks that "normal flats" are not real estate :) Currently the best interests from bank deposits are at 5%, but more likely 4.5%. For example here skok.wolomin.pl The tax from deposits is 19% from the profit, so the real gain is 81% from 4.5% = 3.6%.

As for buying for renting in Warsaw it's perhaps not a bad idea, because Warsaw as the capital has the biggest chance for prices to rise and it's already over 6th year of prices going down, so they should soon go up ;) But if you omit this important fact, then Katowice has better return from rent.

If you can read Polish or can do with google translation then here is the most popular blog about investing in apartments (also in Warsaw) and generally saving money: jakoszczedzacpieniadze.pl

Personally I would encourage you to buy an apartment in Athens. The prices of some apartments dropped to ridiculous levels. There are good condition studios to buy from 5000 eur.
OP Aviv 2 | 5
21 Oct 2014 #5
Hey Monitor,

Thanks for your reply!

As to Bank deposit - you are saying that nowadays banks in Warsaw gives about annual 3.6% (after deduction of tax)? and for what period it should be closed in bank and no options to draw?

As to buy & rent flat in Warsaw - do you know someone who made such investment and knows about the costs (taxes, lawyers fee, maintenance etc) vs. potential income/profit?

As to Athens option - do you have a link to some website of such real estate for investment? (better without agencies)
Justin 86
21 Oct 2014 #6
Aviv for 500k pln i would advise you to buy a commercial unit for 50sq m, you can rent that for 3 to 3500 pln netto per month minus reach out tax of 8.5% so you will make roughly 6% net net profit plus 5% invisible return even if your property price doubles in 20 years. Keeping cash in bank is a bad ide as it alwAys devalues in time unlike realestate
terri 1 | 1,665
21 Oct 2014 #7
>>>Hi Terri, how do you define "normal flats"?
Normal flat is one with a medium lounge, kitchen, at least one bedroom, a bathroom and preferably a little balcony, approx 35-50 m2.
Within the centre of Warsaw, (i.e. 15 minutes walk to Central Railway station) there is no chance of buying such a place. If you go outside and have at least a 45 minutes tram ride then you are in luck.

To the price of the flat you must add the following: the estate agent's fee, the tax, the notary fee (approx 10% of the value). This leaves 450,000 to buy a flat.

You must also have some money for emergencies i.e. tenant leaves without paying rent, floods the flat, does not pay all the utility bills.

IN order to get any return, you must also be sure that the place will always be occupied.
Seeing as you don't speak Polish, how are you going to do that?
Monitor 14 | 1,820
22 Oct 2014 #8
As to buy & rent flat in Warsaw - do you know someone who made such investment and knows about the costs (taxes, lawyers fee, maintenance etc) vs. potential income/profit?

Study my link to the blog. there are all information you need: jakoszczedzacpieniadze.pl

As to Athens option - do you have a link to some website of such real estate for investment? (better without agencies)

property-greece.spiti24.gr/Athens/house_sale-Athens.html

As to Bank deposit - you are saying that nowadays banks in Warsaw gives about annual 3.6% (after deduction of tax)? and for what period it should be closed in bank and no options to draw?

I couldn't write more clearly that it is after tax, why do you ask again? Such interests are just in few banks with top rates. For example:

go here: skok.wolomin.pl/201/Artukuly/Zalogowano_do_strony_SKOK enter password: SKOK2014 click: "rozszerzonej oferty" and see for example

"Lokata rentierska NOWA"
12 miesięcy 4,50 %
23 miesiące 4,60 %
36 miesięcy 4,70 %
It's fixed for 1,2 or 3 years. If you quit before then get only 10% of interests. This is gross value of course.

exactly this article from the blog: jakoszczedzacpieniadze.pl/zarabianie-na-wynajmie
terri 1 | 1,665
22 Oct 2014 #9
Just to warn people SKOK recently has not had the best of press. Please read up all about it.
This may turn out to be another Amber Gold. (If you don't know what it is, please search on google).
Monitor 14 | 1,820
22 Oct 2014 #10
SKOK is very general name to describe many institutions. In English it's Credit Union: en.wikipedia.org/wiki/Credit_union. So saying that SKOKs did not have recently the best press is like saying that banks did not have the best press. Since over a year deposits in SKOKs are insured up to 100 000 eur in the same way as deposits in banks. So if a SKOK has good financial condition, then it's the same save as any small bank. Last year mentioned by me SKOK Wołomin had an audit and results were very good. I am not an employee of this SKOK, simply I have a deposit there, that's why I know that :)
jon357 63 | 15,598
22 Oct 2014 #11
They're similar to Credit Unions but operate a little differently. The way they work is closer to Friendly Societies or smaller Building Societies. An American might compare them to a Savings & Loan and a German to the Sparkasse - they're similar but not identical to both. They are generally considered very respectable; the various scandals have been minor ones.
InWroclaw 89 | 1,915
22 Oct 2014 #12
They are generally considered very respectable; the various scandals have been minor ones.

One Skok went bust, did it not?
Monitor 14 | 1,820
22 Oct 2014 #13
Yes, but money from insurance are/were payed back. Generally some of them are at risk of bankrupcy, so it's better to check them before putting money in order not to have to wait for insurance to give it back (and loose interests). It's like that, because only since 2012 they're under supervision of KNF (en.wikipedia.org/wiki/Financial_Supervision_Authority_%28Poland%29) and before it was little bit wild west there.
polishmortgages 7 | 36
14 Nov 2014 #14
hi,

500K is a good money to buy good property with reasonable potential. I sent you PM but i do not know if you receive it. I manage some properties in Warsaw and I see how important is to buy property in right location. I also strongly recommend home staging for rental and sale. the difference before and after is huge and I do not understand why people do not do it.

kind regards
Daniel
cms 9 | 1,271
15 Nov 2014 #15
Be very wary of putting any large amount in any SKOK. The government is working on a bailout an at the moment - basically asking solvent banks like Pekao and PKO to create a special fund to prop up the SKOKs.

in any case you should read the small print on those deals - normally you can high interest only up to about 50k of savings, above that it will be very low.
pigsy 7 | 305
15 Nov 2014 #16
Avid, don't do residential in poland laws to evict are complicated and time consuming do commercials yields in centrum warsaw are from5% to 7.5%
MediaWatch 10 | 945
16 Nov 2014 #17
As for that 500,000

I would invest maybe 40% of that money in Warsaw rental properties that will appreciate in value. You would then be receiving rent money in the meantime. I would invest the other 60% in the stocks of companies doing energy resources...shale, oil, gas, etc. exploration in Poland and the US.
Sgt Bilko
16 Nov 2014 #18
I had some money in Kasa Wspolnota, the Skok that went bust, including a two year lokata which had about a month to run. The pay out was done through PKO BP and it took one day for the money to be sent to another account of our choosing. All the interest was paid up to the point of the bank going bust. The whole process couldn't really have been handled better. Of course, guarantees are up to 100,000 Euro so about 80,000zl would have gone if we had had 500,000zl invested. Luckily, we didn't.
pigsy 7 | 305
16 Nov 2014 #19
Media watch, for his 20th plan he can't buy crap real estate in warsaw.good commercials start from 14 k a Sq Mt maybe plus 2 percent vat
trancespottingp - | 25
17 Nov 2014 #20
If you're looking at investing in property in Poland from my own experience and my families I can tell you that it's not the best time. Values went up quite a bit in the past 10 years in a lot of hot areas - near airports, universities, town squares, etc. Actually, land is rather expensive in Poland. Not crazy high like Tokyo, Moscow, etc. obviously but nonetheless expensive given the average citizen's purchasing power. There are many beautiful condos selling for even 250k EU and as high as 400, 500k EU in Wroclaw now - the city I'm from.

That being said, If you are looking though at real estate, I'd consider an upscale residential rental property in a large city for the long term.

Don't put your money in some bank and wait for interest like from a CD or whatever. Inflation outpaces any 1.XX% gain you'll make. If anything, I recommend annuities from reputable insurance companies as opposed to CDs and such. Typically higher yield and just as safe as a bank.

Personally, as someone who worked as a commodity broker and with various other investments for a couple years, I don't think Poland is the only place you should invest your money. I'm not saying that there aren't good opportunities though either. It sounds like you're looking to invest some money in something that carries little risk to help get you by. I think there's better things than real estate in PL personally but that doesn't mean you can't put a nice chunk of cash down on a property.

The most important thing to do is diversify. Consider a 'safe' investment without much liquidity - real estate or an annuity and use the rest of your cash on an investment with more moderate risk but more liquidity - perhaps some blue chips and consider some commodities too (maybe at a later date...) - silver, gold and oil are really low now and I think they'll go down a tad bit more till January.


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