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Discover the latest trend in real estate and explore investment properties in the Athens area.
- 10 min read
- 20/11/2024
- by Rania Theologitou
Serviced Apartments: The New Real Estate Trend Expanding in Greece
Discover the latest trend in real estate and explore investment properties in the Athens area.
In an era where flexibility and quality of accommodation are top priorities, serviced apartments are emerging as one of the smartest options in the investment property sector. With the potential for both short-term and long-term rentals, these apartments offer unique opportunities for stable income and value appreciation over time.
What are Serviced Apartments?
Serviced apartments, or furnished and fully equipped large apartments, provide tenants with services and amenities typically found in hotels, such as housekeeping, reception, gym, library, pool, and even a restaurant or cinema. Located in residential areas, they are available for both short-term and long-term rentals and usage.
Serviced apartments are classified as investment properties. An investment property refers to a property that the owner does not use as a primary or secondary residence but holds with the aim of generating profit, either through rental income or resale.
Why invest in an Investment Property?
Investing in real estate is generally considered a lower-risk option that can enhance an investor’s portfolio with competitive, risk-adjusted returns. Specifically, investing in serviced apartments is often regarded by experts as a smart real estate investment due to their higher rental yields compared to traditional residential properties.
Even during the economic crisis from 2009 to 2017, serviced apartments achieved an average return of 7.1%*
(*Figures pertain to the U.S., UK, Spain, and France).
By choosing to invest in serviced apartments, you gain access to a steady cash flow, as these properties are frequently used for short-term stays, leading to more frequent tenant turnover and consistent income. Additionally, like traditional properties, serviced apartments are tangible assets that can appreciate in value over time, especially as demand in the area increases.
Moreover, investing in such properties saves time, as property management companies can handle all aspects of maintenance—from furnishing, cleaning, and repairs to renting the apartment—allowing you to remain hands-off.
What to consider before buying an Investment Property
Purchasing an investment property is considered a solid choice that can yield steady profits in the long term. However, the decision should not be rushed; instead, it requires thorough research, preparation, and evaluation of key factors.
1. Location of the Property
The location of the investment property is crucial, as it determines its value and potential income. Check if the area has good public transport connections and easy access to hospitals, schools, public services, and shops.
If such amenities are lacking, ensure the area has development potential—such as planned infrastructure projects like a metro line, parks, or commercial centers.
2. Financial Budget
Another critical factor is your budget. Create a detailed financial plan that accounts for the total cost of the investment, including:
The property price
Transfer taxes
Renovation or repair costs
Insurance
Shared building expenses
Ongoing management fees
Ensure your budget is sufficient to cover all these expenses without financial strain.
3. Return on Investment (ROI)
Evaluate the property’s ROI before purchasing. Determine if rental income or eventual resale will recoup your initial investment. Don’t forget to account for taxes on any income generated.
4. Legal and Regulatory Compliance
Ensure the investment property has no legal issues, such as unauthorized construction, zoning violations, or outstanding debts. Verify that the ownership documents are clear and complete.
5. Expert Advice
Seek advice from an experienced real estate advisor affiliated with a reputable brand. A knowledgeable consultant with expertise in your area of interest can provide valuable insights on pricing, trends, and investment risks, helping you make an informed decision.
Which areas in Athens are best for buying an Investment Property?
In Athens, several areas stand out as popular choices for real estate investment due to high demand from both foreign and domestic buyers, thriving tourism, and promising returns. These areas include:
Athens City Center
Gazi
Kolonaki
Pangrati
Nea Smyrni
Neos Kosmos
Piraeus and Mikrolimano
These locations share key advantages, such as excellent public transport connections, proximity to Athens’ center, closeness to tourist attractions, and a vibrant selection of entertainment options.
Discover Investment Properties in Athens
Engel & Völkers offers an exclusive collection of high-quality investment properties in the broader Athens area, combining excellent construction with sophisticated design.
FAQ
FAQs about serviced apartments
The key difference lies in the purpose of the purchase and the investment horizon:
Characteristics of an Investment Property:
Purchased with the goal of long-term returns, not for personal use.
Generates income through rental yields and benefits from property value appreciation.
Typically requires minimal renovation unless necessary to enhance rental yield.
Located in strategic areas with stable or increasing demand.
Owners aim for steady income and potential profitable resale over time.
Property for Renovation and Resale:
Bought for short-term profit through renovation and immediate resale.
Investors focus on enhancing market value through aesthetic or functional upgrades.
High-risk investment depending on market conditions and renovation costs.
Often located in areas with high housing market demand.
Property for Future Residence:
Purchased for eventual personal use as a primary or secondary residence.
Investment property ROI is measured in two key ways:
Rental Yield:
Calculated as annual rental income divided by property value.
A good rental yield ranges between 5-7%, while an excellent yield exceeds 8%.
Capital Appreciation:
Refers to the increase in property value over time, influenced by location and market conditions.
Other factors affecting ROI include location, demand, maintenance costs, taxes, and property type (e.g., residential, tourism-related, or commercial).
Residential properties typically yield 4-6%, while tourism-related properties yield 8-12%.
The serviced apartment market in Greece is expanding rapidly, with many companies investing in new developments. While there is no exact data on the total number of serviced apartments in the country, projections indicate the creation of 83 new units in Athens by the end of 2024 and 1,000 apartments by 2026.
These focus on student and corporate housing in areas such as Athens, Patras, and Thessaloniki.
Corporate professionals on long-term assignments in different cities.
Digital nomads working remotely from various locations.
Long-stay tourists and families, who prefer accommodations with home-like amenities.
Students, especially in cities with prominent educational institutions.
The management company collects rent from tenants and transfers a portion of the revenue to the property owner, deducting a commission for their services. The owner's net income depends on management fees and the level of services provided.
Yes, investing in properties to operate as serviced apartments is a smart choice, particularly in tourist or business hubs with high demand for short-term rentals. This can lead to strong returns on investment.
Yes, but self-management requires significant time and organization. Collaborating with management companies can relieve you of most responsibilities, ensuring professional handling of the property.
Management fees for serviced apartments usually cover:
Cleaning and maintenance services
Reception and security
Utility bills (e.g., electricity, water, internet)
Contact
Contact your personal advisor
Engel & Völkers Greece
Athens Tower 2-4, Mesogeion Avenue (10th Floor)
11527 Athens, Greece
Tel: +30 211 105 500 0