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How to make money on a short-term lease in Athens: an investor’s guide

Greek real estate returns the interest of foreign investors. According to the Bank of Greece, the total value of transactions that foreigners entered into the Greek real estate market in 2017 is 87% higher than in 2016. 70% of them, according to the Greek edition Ekathimerini, citizens of non-European countries are imprisoned in Athens and its suburbs. According to statistics from the Bank of Greece, in the first two months of 2018 in Athens, one and a half times more real estate transactions were concluded than in January and February 2017.

The growth of investor interest is due to two reasons. Firstly, the purchase of real estate in Greece worth from 250 thousand euros gives foreign citizens the opportunity to get a Greek “golden visa” – a residence permit in Greece, which can be renewed every five years. from the launch of the program in 2013 to the end of 2017, 5,699 investors and their families received a Greek “golden visa”. Secondly, the real estate market in Athens has a large potential for rising prices: now a square meter in the capital is 44% cheaper than before the crisis. On a quarterly basis, the fall in prices has already stopped: according to statistics from the Bank of Greece, property prices in Athens from II to IV quarters of 2017 remained at the same level.

Real estate in the center of Athens is already starting to go up, and those who want to buy cheaply need to buy right now. We expect a 30% price increase over the next 2–3 years.

George Kachmazov
George Kachmazov
Managing Partner Tranio
Ask a question to George
Investor interest is fueling a growing tourist flow. According to estimates by research company Euromonitor International, modern Athens is the second city in Europe in terms of the growth rate of the number of tourists: the number of arrivals from abroad in 2017 was 4.8 million, 10% more than in 2016. According to the website AirDNA (service , which processes the data published on Airbnb), in 2017, the number of ads for renting property for daily rent in this city increased by 66%.

Restrictions on the delivery of residential real estate in the short-term rental in Greece is not: any foreign investor can buy an apartment in Athens and freely rent it through Airbnb
Restrictions on the delivery of residential real estate in the short-term rental in Greece is not: any foreign investor can buy an apartment in Athens and freely rent it out through Airbnb vladacanon / Depositphotos
Yield
According to AirDNA data for May 2018, apartments in Athens are on average for 50 euros per day: in winter the cost of daily rent decreases to 44 euros, and in summer it grows to 53. In April 2018 the average monthly income of the property owner in Athens was 848 euros 5% more than a year ago, and one and a half times more than in 2016.

Monthly revenue from renting property for short term rent in Athens based on Airbnb
According to AirDNA, more than 80% of the proposals for Airbnb in the Greek capital are one and two bedroom apartments. Such housing is in great demand among tenants. According to statistics, on average, four people stay in one apartment.

According to Tranio, the net profit from short-term rentals in Athens is 5% per annum for finished apartments and 7% for objects purchased during the renovation phase. Thus, Athens offers investors a yield higher than most major European cities, where short-term rentals bring no more than 3-4% per annum.

Costs
Investor costs for the maintenance of real estate consist mainly of tax payment, housing and communal services, and the service of the management company.

All property owners in Greece, including foreigners, pay an annual tax, which consists of two parts: the main and additional. The size of the main part varies from 0.001 to 13 euro / m² and is determined by a number of factors: the area, the notional value established in a particular municipality, the date of construction. The additional part for individuals and legal entities is calculated differently: the first pay this part of the tax only for objects with a cadastral value of more than 200 thousand euros at a rate from 0.1 to 1.15%, depending on the value of real estate, and for companies the additional rate the part is fixed and amounts to 0.55% of the cadastral value of the property. In addition, there is an annual municipal property tax, the amount of which depends on the location of the object and is 0.025–0.035%.

For companies, there is a special real estate tax, but it does not apply if an active business brings a company more income than a passive one, or if a legal entity discloses data on all beneficiaries.
For companies, there is a special property tax, but it does not apply if an active business brings a company more income than a passive one, or if a legal entity discloses data on all beneficiaries.
Tax on rental income varies from 15 to 45% for individuals and is 29% for companies. Depreciation charges (furniture and property depreciation) and repair costs are deducted from the tax base.

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