How do Polish “rentiers” live? All you need to do is invest two million zlotys

How do Polish "rentiers" live?  All you need to do is invest two million zlotys

More and more Poles are investing in apartments for rent, dreaming of “financial freedom”. However, the clash between expectations and reality can be painful – tenants do not always pay, rental profitability is falling, and Poles still prefer their own “m” to someone else’s.

One million Poles already have at least one property for rent – according to data from the Mieszkanicznik Association, which brings together apartment renters. The number of the latter is constantly increasing because Poles earn more and more – according to the Central Statistical Office in the second quarter of this year. average salary increased by 7%. year to year and amounts to PLN 4,839.24. Along with salaries, savings also increase, which need to be kept somewhere. Bank deposits are unprofitable and the stock market is risky. There is also a widespread fear that ZUS will not provide everyone with a reasonable pension, so you have to do it yourself. Kowalski is left with the real estate. Especially since you can get up to seven percent of capital per year on rent in the best locations. No wonder that buying such apartments has become one of the most popular ways of increasing money, and in Poland it is already between 20 and 30 percent. apartments are purchased for investment purposes.

– This is especially visible in Warsaw: a person comes to a developer and says: “I would like an apartment.” – “How much?”. – “This whole cage, for cash.” A lot of people transfer cash from banks, where interest is low, into real estate – says MichałSzafrański, author of the blog How to Save Money in the podcast “Investing in apartments for rent”. Even those who have no cash buy real estate. So they take out mortgage loans because they are relatively accessible and have low interest rates.

– Today you can buy an investment apartment on credit in such a way that its rent pays off the installment and there is something left over. Moreover, using other people’s money is one of the best ways to increase the profitability of real estate investments. However, this is not a sport for everyone, you need, among other things, make sure that the property, even if interest rates increase, still earns money for itself and the loan installment – warns Grzegorz Grabowski, investor and owner of the accounting office.

And here comes the first catch. Because real estate is easy to understand only at first glance, according to the principle that everyone has lived or rented somewhere. It is also wrong to believe that buying a few rental properties will provide us with a life like in Ryszard Rynkowski’s song “Do nothing, have no worries, drink a cool beer in the shade.” Jacek Kusiak, founder and president of the Mieszkanicznik Association, found out for himself that this is not the case: – In the real estate business, it is not like you do nothing and make money. “Passive income” only looks good in books. Even if you outsource rental services, tenants change, renovations need to be done, deposits need to be settled, etc. The owner is also involved in all this, says Kusiak.

Hope in foreigners

The Polish real estate market is currently going through difficult years. Apartment prices are rising throughout the country – according to REAS, in the first quarter in the six largest cities new apartments were on average 11 percent higher. more expensive than a year earlier. In the capital, rents have skyrocketed – a reasonable apartment for a family costs up to PLN 4,500 a month. And companies servicing tenants are counting on more and more money. The prices of their services depend on the number of rooms and the location of the apartment. It could be, for example, 20 percent. monthly rent, or a fixed amount, e.g. PLN 200 per month plus something extra for finding a tenant. This is all good news. There is also a bad thing: Poles are reluctant to rent. They prefer to buy and pay installments to the bank – according to the latest Eurostat data. Less than 16 percent declare being a tenant. countrymen. What’s worse, the percentage of people renting has been systematically decreasing for years – in 2008, 34 percent did so. Polish society. However, Germans (49%), Austrians (45%), French (36%) and Italians (28%) are much more willing to rent than us. The decreasing interest in renting makes us wonder whether investing in apartments for rent makes sense at all in the long run.

– It is true that Poles have an “ingrained” preference to live in their own apartment, but this is slowly changing. More and more foreigners are coming to Poland and will continue to come, most often living in rented apartments or rooms – replies Grzegorz Grabowski. Jacek Kusiak sees it similarly: -It is changing, and it is changing dramatically, because new generations live in the sharing economy, and for this they need a good home. Therefore, we believe that this market will definitely grow, because there are new groups of tenants and more and more people from abroad – he says.

Poles’ reluctance to live in someone else’s apartment is not the end of bad news. As shown by a joint study by Home Broker and rental profitability has fallen significantly and will continue to decline. Although it is still 5.02% on average, it was 5.3% half a year earlier. So how much will we actually earn? As calculated by the portal, investing PLN 750,000. PLN assuming a profitability of 5.5%. 41.2 thousand will go into our pockets annually. zloty. The life of a rentier with an income of PLN 110,000. PLN a year (approx. 9 thousand per month) will be within reach only after investing PLN 2 million.

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