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Yes, the analysis of Budapest's property market is included in our pack
Budapest's rental market offers gross yields ranging from 4.8% to 5.6% across central districts, with net yields settling at 3.5% to 4.2% after costs.
As of June 2025, Districts VII and XIII deliver the strongest yields at 5.2-5.6%, while premium District V commands higher rents but lower yields at 4.8-5.0% due to elevated property prices exceeding €4,100 per square meter.
If you want to go deeper, you can check our pack of documents related to the real estate market in Hungary, based on reliable facts and data, not opinions or rumors.
Budapest's central districts generate gross rental yields of 4.8-5.6%, with District VII offering the best balance of yield and growth potential.
After accounting for taxes, management fees, and vacancy periods, investors can expect net yields of 3.5-4.2% from traditional rentals.
| District | Gross Yield | Studio Price/m² | Monthly Rent (1-bed) | Key Features |
|---|---|---|---|---|
| District V (Belváros) | 4.8-5.0% | €3,500-€5,500 | €698 | Premium location, tourist hub |
| District VI (Terézváros) | 4.8-5.1% | €3,200-€4,800 | €645 | Cultural venues, Andrássy Avenue |
| District VII (Erzsébetváros) | 5.2-5.4% | €2,500-€3,500 | €625 | Nightlife district, strong Airbnb demand |
| District XIII (Újlipótváros) | 5.3-5.6% | €2,200-€3,000 | €626 | Business district, metro access |
Where are the top rental hotspots in Budapest and what are the average gross rental yields in each district?
District VII (Erzsébetváros) leads Budapest's rental market with gross yields of 5.2-5.4%, driven by its vibrant nightlife scene and strong short-term rental demand.
District XIII (Újlipótváros) delivers the highest yields at 5.3-5.6%, benefiting from its proximity to business districts and excellent metro connectivity that attracts professionals and families.
District V (Belváros) offers more modest yields of 4.8-5.0% due to premium property prices exceeding €4,100 per square meter, though it commands the highest rental rates as the city's tourist and commercial heart.
District VI (Terézváros) provides yields of 4.8-5.1%, leveraging its cultural attractions and Andrássy Avenue location to maintain steady rental demand.
Peripheral districts like Kőbánya (District X) offer higher gross yields around 5.6% but suffer from lower liquidity and longer vacancy periods compared to central areas.
What's the average purchase price per square meter for a studio, 1-bedroom, and 2-bedroom apartment in popular rental areas like District V, VI, VII, and XIII?
| Property Type | District V (Belváros) | District VI (Terézváros) | District VII (Erzsébetváros) | District XIII (Újlipótváros) |
|---|---|---|---|---|
| Studio | €3,500-€5,500/m² | €3,200-€4,800/m² | €2,500-€3,500/m² | €2,200-€3,000/m² |
| 1-Bedroom | €4,100+/m² | €3,800-€4,500/m² | €3,000-€4,000/m² | €2,800-€3,500/m² |
| 2-Bedroom | €5,000+/m² | €4,200-€5,200/m² | €3,800-€4,500/m² | €3,500-€4,200/m² |
How much can a landlord expect to charge per month in rent for these apartment types in those same districts?
Studio apartments command monthly rents of €530 in District V, €480 in District VI, €457 in District VII, and €433 in District XIII as of mid-2025.
One-bedroom apartments generate €698 monthly in District V, €645 in District VI, €625 in District VII, and €626 in District XIII, reflecting the premium tenants pay for central locations.
Two-bedroom units achieve the highest rental income at €1,203 in District V, €950 in District VI, €899 in District VII, and €843 in District XIII.
These rental rates reflect a 5-8% increase from 2024 levels, driven by continued demand from young professionals and international students choosing Budapest over more expensive European capitals.
Premium furnished units in these districts typically command 20-30% higher rents than unfurnished equivalents, making quality furnishing a key yield-enhancement strategy.
What is the typical net rental yield after accounting for taxes, management fees, and maintenance costs?
Net rental yields in Budapest's central districts range from 3.5% to 4.2% after deducting all operating expenses from gross yields of 4.8-5.6%.
The largest cost reductions come from Hungary's 15% income tax on rental income plus local property taxes ranging from €150-€350 annually depending on property size and location.
Property management fees consume 10-15% of gross rental income for landlords using professional services, while maintenance and repairs typically account for 5-10% of annual rent.
Vacancy buffers of 5-10% for long-term rentals and 3-5% for well-managed Airbnb properties further reduce net returns, though central Budapest properties experience shorter vacancy periods than peripheral areas.
A practical example: a €250,000 apartment in District VII generating €1,200 monthly rent yields approximately €9,221 annually after all costs, representing a 3.5% net return on investment.
What are the key factors that influence rental yield the most in Budapest—location, property type, renovation level, or tenant profile?
Location dominates yield potential in Budapest, with central districts commanding 20-30% higher rents than suburban areas while property prices increase by only 15-20%.
Property type significantly impacts yields, as studios consistently generate 5-6% gross returns compared to 4% for three-bedroom apartments due to higher per-square-meter rental rates.
Renovation level creates substantial yield differences, with modern, renovated units commanding 15-20% rental premiums over outdated properties, making targeted upgrades highly profitable.
Tenant profile affects both yield and management complexity, with short-term rental guests paying premium rates but requiring more active management than traditional long-term tenants.
It's something we develop in our Hungary property pack.
How do yields compare between short-term rentals (like Airbnb) and long-term rentals, especially in central districts?
Short-term rentals in central Budapest generate net yields of 5-6% compared to 3.5-4% for traditional long-term rentals, representing a 40-50% premium for active management.
Airbnb properties in Districts V and VII achieve average occupancy rates of 76% (approximately 277 nights per year), with daily rates 2.5-3 times higher than equivalent monthly rent calculations.
The yield advantage comes with increased operational demands including guest communication, cleaning coordination, and higher utility costs that can consume 15-20% of gross revenue.
Regulatory restrictions implemented in 2025-2026 have frozen new Airbnb registrations in central Budapest, creating scarcity value for existing licensed properties while limiting new entrants.
Long-term rentals offer lower yields but provide stable income streams with minimal management requirements, making them attractive for passive investors seeking predictable returns.
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What are the main taxes and ongoing costs that reduce the rental income?
Hungarian income tax claims 15% of rental income as the primary tax burden, applied after deducting legitimate expenses like maintenance, management fees, and depreciation.
Local property taxes vary by district and property size, typically ranging from €150-€350 annually for typical rental apartments in central Budapest districts.
Property management fees consume 10-15% of gross rental income when using professional services, though self-managing landlords can eliminate this cost with increased time investment.
Maintenance and repair costs average 5-10% of annual rental income, including routine upkeep, emergency repairs, and periodic renovations to maintain competitiveness.
Additional costs include building common area fees (HOA equivalents), insurance premiums, and utility costs during vacancy periods that collectively reduce net income by 2-4% annually.
How does Budapest compare in rental yields and property prices to nearby cities like Prague, Warsaw, or Bucharest?
| City | Average Gross Yield | Average Price/m² | Market Maturity | Investment Appeal |
|---|---|---|---|---|
| Budapest | 5.1% | €3,400 | Mature | Balanced yield/growth |
| Prague | 2.9% | €4,800 | Very Mature | Low yield, stable growth |
| Warsaw | 3.7% | €3,200 | Developing | Moderate yield/growth |
| Bucharest | 4.2% | €2,100 | Emerging | Higher yield potential |
What are the current occupancy rates and average time-on-market for rentals in Budapest?
Central Budapest rental properties achieve average occupancy rates of 90-95% for long-term rentals, with well-located units experiencing vacancy periods of less than two weeks between tenants.
Airbnb properties in Districts V and VII maintain 76% average occupancy rates throughout the year, equivalent to approximately 277 booked nights annually according to 2025 data.
Time-on-market for quality rental properties in central districts averages 7-14 days, while peripheral areas may require 3-4 weeks to secure tenants.
Seasonal variations affect short-term rentals more significantly, with summer months (June-August) achieving 85-90% occupancy while winter periods drop to 65-70%.
Professional property management and competitive pricing reduce vacancy periods substantially, with managed properties spending 30% less time vacant compared to owner-operated rentals.
Are yields trending up or down over the past 12 months, and what's influencing that—regulation, oversupply, or tourism?
Budapest rental yields have declined slightly from 5.4% to 5.1% over the past 12 months as property price appreciation has outpaced rental rate increases.
Regulatory changes dominate market dynamics, with the 2025-2026 Airbnb registration freeze creating artificial scarcity for existing short-term rental licenses while limiting new supply.
Tourism recovery following pandemic restrictions has stabilized short-term rental demand, though increased annual flat taxes per room (rising 290% from €92 to €367) pressure profit margins.
Long-term rental demand remains strong due to continued migration to Budapest from rural Hungary and neighboring countries, supporting rental rate growth of 5-8% annually.
New residential construction has slowed due to higher interest rates and construction costs, preventing oversupply concerns while maintaining upward pressure on both purchase prices and rents.
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What legal or regulatory changes could significantly impact rental profitability in the next year?
The most significant regulatory development is Budapest's complete moratorium on new Airbnb registrations extending through 2026, creating scarcity value for existing licenses while blocking new short-term rental investments.
Annual flat tax increases for short-term rentals will rise to €367 per room in 2025, representing a 290% increase that particularly impacts smaller operators with 1-3 properties.
Proposed energy efficiency requirements for rental properties may mandate costly renovations by 2026, though specific standards and enforcement timelines remain unclear as of mid-2025.
Tax policy discussions include potential changes to the current 15% flat income tax rate on rental income, with proposals ranging from progressive rates to enhanced deduction allowances.
European Union directives on housing affordability may influence local regulations regarding rent controls or tenant protections, though Hungary has historically resisted such interventions in market pricing.
What kind of renovations or furnishing investments tend to boost rental income most efficiently in Budapest's rental market?
Kitchen and bathroom renovations deliver the highest return on investment, typically increasing rental income by 15-20% while adding 10-15% to property value when executed professionally.
Energy efficiency improvements including modern heating systems, insulation, and double-glazed windows reduce operating costs while commanding premium rents from environmentally conscious tenants.
High-quality furnishing packages enable landlords to charge 20-30% higher rents than unfurnished units, with contemporary designs appealing to international professionals and students.
Technology upgrades such as high-speed internet, smart home features, and modern appliances attract premium tenants willing to pay above-market rates for convenience and connectivity.
Cosmetic improvements including fresh paint, modern lighting, and updated flooring provide immediate visual impact at relatively low cost, often generating 8-12% rental premiums for minimal investment.
It's something we develop in our Hungary property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Budapest's rental market offers compelling opportunities for investors seeking European exposure with yields exceeding those in Prague or Warsaw.
While regulatory changes create both challenges and opportunities, the fundamentals of strong rental demand and limited new supply support continued profitability for well-positioned properties.
It's something we develop in our Hungary property pack.
Sources
- InvestRopa - Budapest Price Forecasts
- InvestRopa - Budapest Property Market
- InvestRopa - Budapest Real Estate Analysis
- Global Property Guide - Hungary Rental Yields
- InvestRopa - Budapest Districts Guide
- The Wandering Investor - Budapest Investment Guide
- InvestRopa - Budapest Market Report
- Airbtics - Budapest Airbnb Revenue Data
- Global Property Guide - Hungary Taxes
- Numbeo - European Property Investment Rankings