Rental Yields 

Tourism & Short-Term Rentals (e.g., Airbnb)

Where local regulations allow (e.g., in downtown zones), short-term rentals offer highly competitive returns compared to Western Europe.

Property Price Growth in Budapest (2024):

  • Average annual growth: approx. 6–8%

  • Inner districts (e.g., Districts V, VI, VII, IX): often over 10%

  • Outer/suburban districts (e.g., XVII, XXIII): approx. 3–5%

  • Growth drivers:

    • Real estate as a hedge against inflation

    • Returning foreign investors

    • Improving tourism outlook

Airbnb Yields in Budapest (2024):

  • Gross annual return: approx. 6–10%

  • Net return (after tax and operating costs): approx. 4–6%

  • Top-performing districts:

    • District VII (Erzsébetváros) – tourist hotspot

    • District V (Belváros-Lipótváros)

    • District VI (Terézváros)

  • Key considerations:

    • District-level regulations (e.g., night limits)

    • Volume of tourism (significantly increased since 2020–2022)

Example: Short-Term Rental Income

An 50 m² downtown apartment rented out 5 nights/week at €60–80 per night:

  • Gross annual income: approx. €15,000–20,000

  • Net income: approx. €8,000–12,000 after operating costs and taxes

Case Study: Airbnb Investment in Budapest for a Foreign Investor

🔹 Property Details:

  • Apartment: 50 m², renovated, located in District VII (Airbnb-friendly zone)

  • Purchase price: €180,000 (approx. HUF 72 million)

  • Furnishing & setup: €10,000 (furniture, equipment, photography, marketing)

  • Total investment: €190,000

🔹 Airbnb Operation:

  • Avg. daily rental rate: €75/night

  • Occupancy rate: 70% (approx. 255 nights/year)

  • Gross annual income: €75 × 255 = €19,125

🔹 Annual Costs:

  • Management fee (20%): ~€3,825

  • Utilities, HOA, insurance: ~€1,800

  • Maintenance, cleaning, misc.: ~€1,200

  • Taxes (as a foreign investor under Hungarian law): ~€1,500–2,000

Net annual income: approx. €10,300–11,000

Yield & Return on Investment

  • Net annual yield: approx. 5.5–6%

  • Payback period: approx. 16–18 years

Plus:

  • Property value may increase by 5–8% annually

  • Income generated in euros – important for Western investors

  • Dual return potential: rental income + capital appreciation

Why Is This a Good Opportunity for Foreign Investors?

  1. Low Entry Prices: Much lower than in Western European cities

  2. Stable Tourism: Budapest is once again a year-round international destination

  3. Higher Returns: Significantly higher yields than Berlin or Vienna

  4. Strong Rental Market: Reliable demand for both short- and long-term rentals

  5. Low Political Risk: EU member, stable legal and economic framework

  6. No Currency Risk if Income is in Euros: Many guests pay in EUR (e.g., via Booking)

Currency Risk or Opportunity – How It Works

1. If the HUF Weakens Against EUR or USD

(This has been the trend in recent years.)

➤ Advantage:

  • Lower purchase price in EUR/USD

  • Example:

    • 1 EUR = 370 HUF → HUF 74M apartment = €200,000

    • 1 EUR = 400 HUF → same apartment = €185,000

  • If return is calculated in EUR/USD, weakened HUF increases effective return

➤ Risk:

  • Rental income generated in HUF (unless converted automatically)

  • Weaker HUF = lower EUR/USD return when transferring abroad

2. If the HUF Strengthens

(Rarer, but did occur between 2011–2015.)

➤ Advantage:

  • HUF income is worth more in EUR terms

    • Example: HUF 1M/month Airbnb income

    • At 1 EUR = 360 HUF → ~€2,700

    • At 1 EUR = 340 HUF → ~€2,940 → +9% gain from exchange rate alone

➤ Risk:

  • If purchasing now, the apartment is more expensive in EUR

  • Later weakening of HUF may reduce the EUR value of the asset

How to Leverage Currency for Profit

  1. Timing the Purchase: Buy when HUF is weak – lower EUR cost

  2. Currency Selection: Collect rental income in EUR via platforms (e.g., Booking, Airbnb)

  3. Dual Currency Strategy:

    • Buy in HUF

    • Record and repatriate profits in EUR/USD

    • Exploit currency arbitrage

  4. Combined Capital Gain: Property value rises in HUF and may also increase in EUR if HUF weakens

Summary: HUF Exchange Rate Can Be an Opportunity If You:

  • Time your purchase wisely

  • Think in multiple currencies, not just in HUF

  • Understand Hungarian tax and currency rules

  • Use platform-based rentals instead of traditional long-term leases