With this short case study, Penates Zrt. show how it’s possible to achieve more than 22,000 € profit (almost 20% profit margin)* by investing in real estate property, renovating it and selling it later, with the help of our company. By the end of this article, you’ll have a proper understanding of why you need a professional full-service real estate company such as Penates Zrt.
HOW WE ACQUIRED THE PROPERTY
Our team included several highly experienced real estate evaluators who monitored the market on a daily basis in Budapest. It seemed to be a great investment opportunity when one of the evaluators found a fifth-floor flat on Bem József Street in the 2nd district of Budapest, located close to the popular green area of the Margareth Bride at the Danube.
The view from the property’s balcony was astounding, a picturesque panorama of the river, and it was a good size at 66 square meters.
From the first moment, it was clear that we had to renovate the flat but, after this investment, could sell it to a new owner at a much higher price.
The former owner of the property wanted to sell the flat for 24M Ft (77,000 €), and after some negotiation, we managed to acquire it for 20.5M Ft (65,500 €).
After the sale, we paid 4%+VAT of the price of the purchase to our real estate evaluator, 400,000 Ft (1,300 €) as the acquisition of property tax, and 100,000 Ft (320 €) in lawyer fees. It means the whole acquisition cost 22M (70,120 €).
HOW WE RENOVATED AND SOLD THE PROPERTY
After the acquisition, we renovated the flat with a goal of selling it for double the price. This work included a wide range of jobs, such as demolition, fixing the electrical and plumbing, replacing windows and doors, painting, paneling, getting new lamps and accessories, and home staging. Altogether, these cost 10M (32,000 €).
The following step was advertising the renovated flat. We used the experience of our sales team and started advertising the property for 43M (137,600 €). It seemed to be a reasonable price because we received many emails and calls, and finally sold the flat for 41M (131,200 €).
After the sales, we gave 4%+VAT to the salesperson as a commission.
If you take a look at the calculations below, you can see the investor achieved almost 20% profit margin on their investment. Even better, you can also get this result if you choose Penates Zrt. to help you with your investment. How?
Real estate investment has several pitfalls that we can help you avoid. Our success is based on three main pillars:
- Our company has been in the real estate business for many years in Budapest, so we have extensive experience on how to find ideal flats, apartments and houses to invest in. We are knowledgeable at determining what location is perfect now and how to evaluate your profit potential.
- Our experience is that most investors working without help spend too much money restoring their properties. There is nothing worse than renovating real estate at double the price a professional investment company could, and then the quality of work turns out to be unacceptable. We prevent you from wasting your money on overpriced and low-quality renovation, since we work with trusted and long-time partners.
- Our sales team is always up to date, so they evaluate properties accurately and advertise them for the perfect price. If you list your flat or house too high, no one will call you, but if you pick an overly low price, you won’t make enough profit on your investment. We help you with your pricing and the entire selling process until you sell your property either to a Hungarian or a foreign person.
Penates Zrt. guarantees that if you invest your money into a real estate property with our help, we will assist you every step of the way and your investment will be profitable in the end thanks to the three aforementioned pillars.
The only thing you have to do is pay the commission fee to our sales team (4%+VAT) when we buy the property, fund the work of renovation and pay the commission to the sales team (4%+VAT) when we sell the property.
This is what is called a win-win situation. Reach out to our energized and motivated team anytime by phone: +36 20 346 4429
*This profit is included in your personal income taxes.