Long-Term Real Estate Rental in Hungary

Published on October 3, 2025 and written by Cyril Jarnias

Hungary, and particularly its capital Budapest, is attracting an increasing number of foreign real estate investors seeking profitable opportunities. With its rich architectural heritage, affordable cost of living, and dynamic rental market, this Central European country offers interesting potential for long-term rentals. In this article, we guide you through the key steps to succeed in your rental investment in Hungary.

The Hungarian Real Estate Market: A Safe Bet for Investors

Before embarking on the long-term rental adventure in Hungary, it’s essential to understand the specifics of the local real estate market. Budapest, in particular, stands out as a prime destination for foreign investors.

A Growing Market

The Hungarian real estate market, particularly in Budapest, has experienced sustained growth for several years. Property prices have increased significantly, offering interesting capital gain prospects for investors. This trend is explained by several factors:

• Budapest’s tourist appeal, which generates strong demand for short-term rentals
• The influx of foreign workers and students, creating stable demand for long-term rentals
• Low interest rates, favoring real estate investment
• The country’s relative economic stability

Attractive Rental Yields

Rental yields in Hungary are particularly interesting for investors. According to recent data, gross yields for long-term rentals in Budapest range between 4% and 5%. While these figures may seem modest at first glance, they need to be considered in perspective with the property’s potential long-term appreciation.

Advantageous Taxation

Hungary offers a relatively favorable tax framework for real estate investors. The tax rate on rental income is 15%, which is relatively low compared to other European countries. Furthermore, almost all investment-related expenses can be deducted, including travel expenses to Hungary to visit your property.

Another significant tax advantage concerns capital gains tax. This decreases progressively over the years, reaching 0% after 5 years of property ownership. This provision encourages long-term investments and can prove very advantageous for patient investors.

Finding the Ideal Property: Budapest’s Popular Neighborhoods

To maximize the potential of your long-term rental investment in Hungary, the choice of location is crucial. Budapest, divided into 23 districts, offers a variety of options for all types of investors.

Central Neighborhoods: A Safe Investment

Districts V, VI, and VII, located in the heart of Budapest, are particularly popular with long-term tenants. These neighborhoods offer a unique blend of history, culture, and nightlife, attracting both expatriates and young Hungarian professionals.

• District V: Considered the “downtown” of Budapest, this neighborhood is home to many historical monuments and offers excellent public transportation connections.
• District VI: Known for its Art Nouveau architecture and trendy cafes, this neighborhood attracts a young and dynamic population.
• District VII: The Jewish Quarter, which has become the heart of Budapest’s nightlife, is highly sought after by young tenants and tourists.

Up-and-Coming Neighborhoods: For Better Yields

For those seeking better rental yields, it may be interesting to look at neighborhoods undergoing transformation:

• District VIII: Long considered less attractive, this neighborhood is experiencing rapid gentrification and offers interesting investment opportunities.
• District IX: With its university and numerous green spaces, this district is attracting more and more young families and students.

The Importance of a Local Real Estate Agent

To effectively navigate the Hungarian real estate market, it’s highly recommended to use an experienced local real estate agent. A good agent can not only help you find the ideal property but also guide you through the subtleties of the local market and the legal aspects of the purchase.

It’s important to choose an agent who acts as a buyer’s representative, not the seller’s, to ensure your interests are fully protected. Additionally, opting for a French-speaking agent can greatly facilitate communication and understanding of market nuances.

The Legal Framework for Long-Term Rental in Hungary

Once the property is acquired, the next step is to establish a solid legal framework for your long-term rental. Understanding and complying with local laws is essential to avoid future disputes and ensure the longevity of your investment.

Types of Leases in Hungary

In Hungary, there are two main types of leases for long-term rental:

• Fixed-term lease: This type of contract is established for a fixed period, usually one year or more. At the end of this period, the lease automatically terminates unless renewed by mutual agreement.
• Indefinite-term lease: This contract has no predefined end date and continues until one of the parties terminates it, respecting a legal notice period.

Essential Clauses in the Lease Agreement

A lease agreement in Hungary must include certain essential clauses to be legally valid:

• Identity of the parties (landlord and tenant)
• Precise description of the rented property
• Amount of rent and payment terms
• Lease duration
• Contract termination conditions
• Respective responsibilities of landlord and tenant regarding maintenance and repairs

The Importance of a Bilingual Contract

To avoid misunderstandings and facilitate administrative procedures, it’s strongly recommended to establish a bilingual lease agreement, in Hungarian and French (or English). This document will be valuable not only for you and your tenant but also for banking and administrative procedures.

Security Deposit

In Hungary, it’s common to request a security deposit equivalent to 1 to 3 months’ rent. This deposit must be returned to the tenant at the end of the lease, minus any damages or unpaid rent.

Setting the Right Price: Determining the Optimal Rent

Setting the rent is a crucial step that will directly influence the profitability of your investment. It’s about finding the right balance between attractiveness for tenants and profitability for you.

Analyzing the Local Market

To determine the appropriate rent, start with a thorough analysis of the local rental market. Consider the following factors:

• Average rental prices in the neighborhood for similar properties
• Rental demand in the area
• Nearby amenities and services (transportation, shops, schools, etc.)
• The general condition of the property and its features

Considering Additional Costs

In Hungary, it’s common for tenants to bear certain costs in addition to rent. This may include:

• Condominium fees
• Water, electricity, and gas consumption
• Residence tax

Make sure to clearly define in the lease agreement which costs are included in the rent and which are the tenant’s responsibility.

Planning Rent Increases

It’s wise to include rent increase terms in the lease agreement. In Hungary, there are no strict legal limits regarding rent increases, but it’s recommended to remain reasonable to maintain good relationships with your tenants.

Considering Seasonality

Although less impactful for long-term rentals, seasonality can influence rental demand, particularly in Budapest. The period from September to October, for example, often sees increased demand due to the arrival of students and young professionals.

The Art of Property Management: Cultivating Long-Term Relationships with Your Tenants

Effective management of your property and your relationships with tenants is essential to ensure the long-term success of your real estate investment in Hungary.

Selecting the Right Tenants

Choosing tenants is a crucial step. Here are some points to consider:

• Check candidates’ solvency (pay stubs, employment contract)
• Request references from previous landlords
• Ensure the tenant’s profile matches your property (for example, a family apartment for a couple with children)

Maintaining Clear and Regular Communication

Good communication is key to a harmonious relationship with your tenants:

• Stay reachable and responsive in case of problems
• Inform your tenants in advance of any planned interventions in the property
• Be clear about mutual expectations from the beginning of the rental

Regularly Maintaining the Property

Regular maintenance of your property is essential to:

• Maintain its long-term value
• Ensure the comfort and satisfaction of your tenants
• Avoid costly repairs due to neglect

Managing Conflicts Professionally

In case of conflict with a tenant:

• Stay calm and professional
• Listen carefully to the tenant’s concerns
• Seek amicable solutions before considering legal measures
• Don’t hesitate to call a mediator if necessary

Considering Professional Property Management

If you don’t reside in Hungary or prefer to delegate daily management, using a property management agency can be an interesting option. These professionals can handle:

• Tenant search and selection
• Rent collection
• Repair and maintenance management
• Administrative and legal aspects management

Conclusion: A Promising Investment with the Right Strategies

Investing in long-term rental real estate in Hungary, particularly in Budapest, can prove to be a wise financial strategy for savvy investors. With its still attractive property prices, interesting rental yields, and favorable tax framework, the Hungarian market offers beautiful opportunities.

However, as with any real estate investment abroad, success largely depends on your preparation and ability to navigate a different legal and cultural environment. It’s crucial to understand the specifics of the local market well, choose your property’s location wisely, and implement effective property management.

Remember that real estate investment is a long-term commitment. Patience and a strategic approach are essential to get the most out of your investment in Hungary. With good planning, rigorous management, and a bit of luck, your Hungarian property could become a stable source of income and valuable diversification for your investment portfolio.