Where should we invest our money?

In an earlier article, we looked for the most optimal solutions to use the $ 5 billion lottery prize , and this time we looked into what it would be worth investing in a much smaller amount of $ 5-10 million. Let’s see what can be done with our saved money!

Real estate can still be a great investment

Real estate can still be a great investment

Real estate is clearly the best investment of the past year. The prices rose in the sky, especially in the case of Budapest real estate, and the inner districts and the XI, XIII. and XIV. the most popular. Those who bought property in the previous year may now have up to 30-40% more housing, but of course this depends on the area and the condition of the property. And some of the cheaper, out-of-district panel flats can be sold for up to 50% more than they were available a year ago.

The market is still on the rise, with lots of people looking for homes, so even now it’s not too late to invest the millions we’ve saved. Of course, we need to think carefully, look at the real estate market to catch a relatively cheaper apartment, which we may sell at a higher price after a renovation, with a few million benefits in total. Of course, we also need to tax on real estate, and we should not forget this when calculating the expected profit.

Borrowing if the money we save is not enough to buy the property

Borrowing if the money we save is not enough to buy the property

We also need to decide if it is worth borrowing if the money we save is not enough to buy the property. After a merger in June, it is now home to the largest real estate portal in Hungary, with a single click on the ads on PropertyRate.com to see what’s the best credit options for a particular apartment in your BankRation calculator. Thanks to this merger, those who want to buy a home will be informed as quickly as possible about where to buy a loan.

One of the reasons for the strong increase in demand for sale properties is that mortgages are getting cheaper, so with a $ 10 million loan taken for a 15 million forints home, we can find an option where the monthly repayment is just over 60 thousand forints. And if you want to avoid the risk of higher interest rates over the years, you can opt for a loan with an interest rate of 10, 15 or 20 years, so the monthly repayment amount can remain the same throughout the life of the loan. Of course, these more secure loan schemes result in higher installments, but even so, the monthly installment is around $ 80,000 for a $ 10 million loan.

A new form of business is also gaining in popularity as more and more people see fantasy about Airbnb being renting out their homes to foreigners for a few days. Many people invest money in this business to buy homes, so they buy real estate for a longer term investment. To some extent, this market seems to have stopped due to relative oversupply, as the number of guests arriving is not growing at the same rate as the number of apartments rented on Airbnb.

Demand has risen not only for sale flats, as long-term rentals are also on the rise and, as a result, rents have increased significantly in recent years. Demand is rising as more people move from the countryside to the capital for longer or shorter periods due to their jobs or studies, and on the other hand, former foreign currency lenders are forced to rent homes instead of their own real estate. And the increased demand for rented homes is another reason why it is still worth investing in real estate, as rent from a reliable, well-paid tenant can easily cover the monthly repayment of a mortgage on your home.

The “new social policy” launched in July this year, the Family Housing Benefit (CSOK), is also playing a role in the boom in the real estate market, as it is now possible to apply for state subsidies for used homes . Presumably, new home buyers will continue to appear with the use of CSOK, as not all potential applicants will immediately go to the bank, the more prudent ones still go to planning and calculation. Perhaps it is they who will buy the apartment in which we are now investing our money.

We can slowly forget about deposits

We can slowly forget about deposits

It is certainly worth looking at other investment options, but we will see that with a guaranteed investment we can only expect very low returns. Banks pay only interest on bank deposits slightly above the current central bank base rate of 1.35%, so this form of investment can slowly be forgotten, at least until the central bank base rate increases significantly. Larger banks usually have a 1.5-2% interest rate on their deposit, and we are happy to find a deposit option that promises slightly higher returns.

Even though interest rates are low, they still have to be taxed, with interest rates of 16% and EHO 6%. These taxes can be reduced or completely reset if we save our savings on a Long Term Investment Account. The National Deposit Insurance Fund has approx. Providing up to $ 30 million (up to $ 100,000) in bank deposits for our clients, we guarantee at least a very low interest rate that our money is completely safe.

Other investment opportunities


Currently available government securities have an interest rate of 2.5-3% depending on their type (Hungarian Government Bond, Interest-bearing Treasury Note or Treasury Savings Note) and maturity. We also have to tax 16% of our yield on government securities. With this investment, the Hungarian state guarantees the payment of capital and interest at maturity, so that we can be fully safe in these “papers” as well.

However, anyone who does not insist on a guaranteed interest or return, or even the risk of losing part of their invested capital, can turn their money into mutual funds. Even lower-risk funds can achieve 3-5% gross return, while a more risky portfolio can yield returns of up to 15%.

Of course, instead of choosing a riskier investment fund, we can even invest our money in equities. And true entrepreneurs can try foreign exchange or futures trading. But successful trading requires knowledge of global economic processes, without which it would be irresponsible to risk millions.

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