Real estate for rent in Austria

Real estate for rent in Austria

Austria is an ideal country not only for living, but also for real estate investment. Both among local residents and among foreigners, the acquisition of real estate as a source of income is very popular.

Austria is one of the European countries with the highest percentage of tenants. 41.2% of the population prefer to live in rented, rather than in their own real estate. Moreover, in the capital, this figure is much higher, approximately 75% of homes are rented. On average, in Europe this number is 29.9%. That is why, if you plan to purchase real estate for subsequent rental and stable income, Austria is one of the best options.

It is important to note that for foreigners, the procedure for buying property in Austria may differ compared with the locals. So, citizens of countries outside the EU, to purchase real estate must obtain a residence permit. There is another way - you can register a company in Austria and purchase real estate as an asset of this company.

Where to buy property for rent?

Of course, one of the best options for the acquisition of real estate and its subsequent lease is the capital of Austria, Vienna. This city is ideal - firstly, in terms of consistently high demand, and secondly, in terms of rental income.

Rent for housing in Vienna has grown by 60.3% since 2006, while the national average is lower, 53%.

When purchasing real estate in Vienna as an investment, it is important to choose the right area for this. The most expensive area is Inner City. The rental rate here is the highest in Austria, from 18 to 22 euros per square meter per month. However, due to the high real estate prices in this area, rental yield here is low compared to other areas, it ranges from only 1.72% for a 130-meter apartment to 2.33% for a 50-meter apartment. With this level of profitability, almost no one buys apartments here to rent them out.

Much better options for real estate investment are located in areas near the city center with moderate real estate prices. First of all, we are talking about Margereten, Mariahilfen, Favoriten, Hernals, or Leopoldstadt. Rental yield here varies from 5% for small apartments, to 3% -4.4% for apartments with a large area.

As for other cities in Austria, you can also consider Salzburg, here you can get from 2.4% to 3.8% yield, as well as Graz - an indicator here is from 2.5% to 4.9%

Which real estate is better to buy?

In terms of profitability, the best option would be a small one-bedroom apartment - according to statistics, the smallest apartments return the highest rental yields.

At the same time, buying too tiny real estate is not the best decision - residents value comfort. According to recent reports, the average living space in Austria is growing. For example, in 2016 the average area was 99.3 square meters, a year later - already 99.6 square meters. In 2018, this figure was 100.1 square meters.

In addition to the area, it is important to consider the location - good transport accessibility will increase the attractiveness of the apartment. Other important factors are good heating in the apartment, a convenient layout, soundproofing (especially if the windows overlook a busy street), the view from the windows to the green area or the sights of the city.

Why is it profitable to buy real estate at the construction stage?

A good option from the point of view of investing will be the acquisition of real estate at the construction stage. This is beneficial for several reasons.

First, you won't need to pay the full amount right away. Payments are phased. At the stage of construction of the pit, the first payment is made, usually it is 10-15%. The next payment occurs at the stage of construction, it is about 30%, approximately the same amount must be paid after the construction is completed, and the remainder is often allowed to be paid within 3 years from the moment of purchase.

Thus, the buyer receives a guarantee that the developer will eliminate possible defects, this serves as insurance against risks. In case of ruin of the developer, all invested funds, of course, are reimbursed. In addition to security, such a scheme is also attractive because you do not need to immediately invest all the free money in this transaction.

Secondly, buying an apartment at the construction stage in order to rent it out, you can save up to 20% of its cost. The fact is that with such a purchase, the state will refund you 20% VAT. Thus, in Austria, the government stimulates the acquisition of housing in order to rent it out and pay taxes on monthly income. Keep in mind that the state will monitor the subsequent use of the apartment - therefore, you will have to adhere to the original plan and be sure to rent it out, and also remember to pay taxes.