Letter from Austria
So, why Austria... surely it is just snow and highly expensive, like Switzerland? Well, that’s where you would be wrong! The market is totally different and you can still buy a house in the grape- growing regions (yes, they grow grapes, and make some of the best wines) for under €150,000. Austria is a stable country with none of the property highs and lows of other countries. As they say
in Austria, property normally comes onto the market through death or divorce. Not entirely true, as now you can add bank repossession, but not a bad description of how property becomes available. For the small investor, renting out their property brings in 4-6% per annum return. Not earth shattering, but better than you get on deposit. The rules for long-term rental are straightforward: the landlord must offer a three-year contract and the tenant must complete 15 months of this before they can leave. Many small investors prefer holiday renting, keeping the property free for their own use while
earning a good income if advertised well, generally around 15% return. Then you have the market for guest houses and small hotels: low prices per square metre compared to houses and with opportunities to get a large property at a low price and convert into self-catering apartments. For the business investor, there are larger hotels all ticking with good staff, but not going anywhere. They just need a new captain at the helm to fi ll their sails once more. For the larger investor, there are the numerous Schlosses (castles) and country estates – some in superb condition, others that need renovating. These give the company investor excellent opportunities to make a good return and in the medium to long term, a good capital gain.
What about the best areas to invest? Well, to make a gain you need to look at the areas away from the main tourist ski resorts. Here, the prices are already at the top, so with an apartment you can be sat on a property that can take years to even catch up on the 10% purchasing costs. Best now, are regions that have been largely ignored and therefore have the growth potential for the next 10 to 15 years. These are the regions such as the grape growing areas I mentioned earlier. They are mostly within 60 to 90 minutes of Linz or Vienna airports. Some local councils in these areas have banded together to create development regions and are putting money into attracting investors.
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Justin Field
Justin Field is Senior Partner at property marketing consultants,
www.amazingaustria.com who identify areas in Austria and German speaking countries for corporate investment clients. Email:
Justin@amazingaustria.com Telephone: 0043 6138 20191
Website:
www.amazingaustria.com
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