The Lettings Market: Poland
Author Leaonne Hall is an expert on the overseas property market and has written extensively for a number of newsstand titles. She previously produced three editions of the Red Guide to Buying Property in Eastern Europe, and has been writing in detail on the individual markets since 2003.
THE LETTINGS MARKET
As one of Europe’s best jet-to-let markets, Poland offers plenty of opportunity for rentals. Although yields have dropped over the last five years, you can still expect returns of between 6% and 11% depending on where you buy. The best returns are centred around the expanding cities, such as Warsaw, Kraków and Poznań, where there is a growing demand for rentals as jobs continue to be available and the Polish middle class continues to grow. In Warsaw, there are a number of developments offering guaranteed two- to four-year rental returns of 5% (see www.letterstone.com).
Long-term rental potential offers the best returns, especially as the Polish are happier to rent than deal with mortgages, although this is changing. The best locations are central, close to offices, shops, entertainment districts and transport hubs. With the increasing numbers of corporations and companies relocating to Poland, there is also a massive market to rent to business people, generating around £450 a month for a two-bedroomed apartment. Many Polish towns also have a large student population, which is a rich rental vein to tap into, while out in the Tatras, resorts like Zakopane can offer year-round rentals, with weekly returns averaging £500 for a chalet.
RENOVATING A PROPERTY
There is a very limited market for renovation properties in Poland. While there are no shortages of old properties to modernise, the best options for investors are to buy renovation projects in the countryside, sticking to newly-built properties in the city centres – these are the most in-demand in terms of rentals and resale. However, as a developer, there are plenty of opportunities to buy dilapidated buildings in one of Poland’s major cities, redeveloping them into flats which can then be sold on.
Renovating is no more difficult in Poland than in the UK, so long as you ensure you find decent builders, although costs will on average be six times less for builders and four times less for material than in the UK. Nevertheless, costs can still spiral, with the average expenditure being £200 per square metre.
