Rental Leases in Budapest Hungary

Most leases in Budapest tend to be for one or two years. After this period the tenant has the right to renew and in most cases (well over 80%) the tenant remains in the property for an indefinate period on a year to year basis. Sometimes one is able to obtain 4 – 5 years on a lease but that very much depends on the type of property and its location.

Our leases require that the tenant deposits a security deposit of at least 2-3 months of the rental value and in the event that the lease is resigned that the tenant return the property in the condition it was in when they first took it. In the UK this is usually referred to as an FRI Lease. An automatic rent review is placed into all our leases allowing us to raise the rent by the prevailing rate of inflation.

Of the properties we currently manage, the split between domestic and foreign tenants is around 40% / 60% respectively. Contrary to popular opinion, in many cases it is better to have an excellent domestic tenant than a foreign one. Our research and statistics show that turnover among foreign tenants is far higher and vacant periods longer. Actually this is a pretty obvious factor even if its one that is overlooked much of the time. If one thinks about it, many exapatriates are in Budapest for a fixed period and once their contracts expire, they return while domestics tend to stay far longer. Interestingly very few agents take this into consideration as owners love to hear that a multinational company has rented their property.

For example, if one has a foreign tenant paying 2,500 Euros per month who leaves after 12 months, it may take another 4–6 months to relet the property. Whereas a local tenant paying say 2,300 Euros a month may be paying 200 Euros per month less in the first year but if one has a vacancy of just one months between tenants, one would be far better with the domestic tenant.

Our aim is to offer a ‘One Stop Shop’ for Budapest property owners. This ranges from simply finding a tenant to drawing up leases, collecting rents, maintaining and managing properties, renovation, cleaning etc. We can fit our brief to suit the owners exact needs and take all the worries and maintainance of owners shoulders.

Our lease contracts are drawn up by our legal department utilising the services of an expert property lawyer. Leases are usually either in HUF or in Euros.