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Buying property in Stockholm

Is it safe for investors?

Meowzers
post 28.Apr.2013, 05:13 AM
Post #1
Joined: 12.Jun.2012

Does Sweden allow foreigners to buy property like apartments? I'm thinking of moving to Stockholm and/or buy flats to rent out. Can investors earn a decent return in Stockholm? Are there rent caps? Are squatters an issue like in Amsterdam?
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Mark249
post 28.Apr.2013, 07:53 AM
Post #2
Joined: 9.Nov.2012

Did you find a job yet? wink.gif

lots of restrictions on rental business, not very profitable
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Meowzers
post 28.Apr.2013, 11:34 AM
Post #3
Joined: 12.Jun.2012

QUOTE (Mark249 @ 28.Apr.2013, 07:53 AM) *
Did you find a job yet? wink.gif

Not yet :-) I was accepted to a Master's program in Economics there. Trying to find out if I should buy a flat while I'm there for 2 years.

QUOTE
lots of restrictions on rental business, not very profitable

Do you know what cash returns investors receive? After operating expenses and property tax I can get 6%; and 4% after income taxes here in the US. What about Stockholm?

I was reading a news story that they may be getting rid to rent caps. This could help the returns. I know the recent gains in Sweden's house prices are due to a capital flight out of Southern Europe. But eventually that will reverse and the prices will fall. Just wondering if anyone has the numbers.
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Jules
post 28.Apr.2013, 02:21 PM
Post #4
Joined: 14.Nov.2005

This question comes up time and again on the forums in various guises and if you want all the details you need to look back through the old posts but in general here is a summary:

Property prices are at a record high in central Stockholm whilst interest rates are very low. You can make your own mind up on the likely future scenario, but it is general it is agreed that at some point interest rates will rise making property less affordable, thus slowing or even reversing the price rises of recent years.

Renting is not easy in Sweden, when you buy an apartment you are actually purchasing a share in a co-operative with the right to live in a certain apartment. The board controling the co-operative have an effective veto on many things you may wish to do with the apartment from renovations to renting out. Most boards will frown upon someone buying and letting immediately and may not grant you permission to do so. If you do get permission to let your flat, usually because you can prove you have a short commitment somewhere else with the intention of returning, then the usual maximum period is for one year. If you wish to let your flat beyond that period it is quite likely that you will be refused permission to do so, ignoring the tenants association is not wise and in some case you could be forced to sell the property by the association.

Rent controls have recently been relaxed and prices for rents have thus increased, but the original rules were very draconian, and the new rules represent a relaxation of these not a free for all. Basically you are allowed to cover your expenses but no more. Full details are available on other threads on this forum.

There is also a sales tax paid on any profit made on the property, unless the money is reinvested in Swedish property.

I'll let you make your own mind up on wether you think it would be worthwhile buying to let or as an investment, but the consensus both among Swedes and expats seems to be that it is not worth it financially, or for the amount of effort involved unless you plan on living in the flat yourself.
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Coolrunnings
post 28.Apr.2013, 04:34 PM
Post #5
Joined: 15.Jun.2012

If you want to make some money under swedish conditions then the best investment in Stockholm are the bostadsrätts apartments in Husby (kista). Reason being that some of them have a seperate rental portion with a seperate entrance. Very few apartments in Stockholm have those. So you can stay in one apartment and rent out the other.

The value of my property went up 4 times the purchased value over a 5 year period there, was dirt cheap (price of an average car) when I bought it. The area is still undervalued and there is a huge demand for them. Nice area and a fixed rate all inclusive utility bill that is quite low (rare in Stockholm).
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Meowzers
post 29.Apr.2013, 04:37 AM
Post #6
Joined: 12.Jun.2012

http://en.wikipedia.org/wiki/Husby,_Stockholm

Cheap because of the immigrant population? They are most likely to rent instead of own, for obvious reasons? Don't these people live in government subsidized flats?
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Mark249
post 29.Apr.2013, 07:15 AM
Post #7
Joined: 9.Nov.2012

You don't seem very bright do you? laugh.gif
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Yorkshireman
post 29.Apr.2013, 07:43 AM
Post #8
Joined: 22.Nov.2011

QUOTE (Meowzers @ 29.Apr.2013, 04:37 AM) *
Cheap because of the immigrant population? They are most likely to rent instead of own, for obvious reasons? Don't these people live in government subsidized flats?

1. I'm an immigrant to Sweden, and last time I looked I found that I certainly do not live in a Government subsidised flat.

2. It is against the law for local government to subsidise the public owned accomodation, they have to live and die by their own economy, hence the news the other week that the cost for the renovations that are required in many of the older buildings from the 60's/70's will be added to the rents over time. (ie. rent increases.
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vicky7
post 29.Apr.2013, 07:46 AM
Post #9
Joined: 28.Nov.2012

Wow, the BR flats there with seperate portions do exist and just as you said. Good value for money.
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skogsbo
post 29.Apr.2013, 07:56 AM
Post #10
Joined: 20.Sep.2011

QUOTE (Jules @ 28.Apr.2013, 02:21 PM) *
There is also a sales tax paid on any profit made on the property, unless the money is reinvested in Swedish property.

that is why you don't want or need a crazy price rise, just have a property that maintains it's value as the tenants help pay off the loan. Sell after a while and your profit is the difference between remaining loan and the value, not the difference between buy and sell price, which is what the taxman is looking for. You will have to declare an income though, but if you are making money, you pay tax, that's the way it usually works!!

The threshold goes up to 50k krona for rental income, next year, according to our taxman.
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oluies
post 9.May.2013, 09:07 PM
Post #11
Joined: 8.Aug.2012

QUOTE (Jules @ 28.Apr.2013, 02:21 PM) *
Renting is not easy in Sweden

Renting is easy, if you own the property. Most apartments in stockholm is "Bostadsrättsförening" which is like a co-op in the us. If you live in a co-op you need permission from the board of Directors to rent out. The board of Directors is elected bianully. If you purchase 2/3s of a house you are safe and can do what you like smile.gif Most co-ops has rules that you can rent out for 1-3 years if you have special reasons.

QUOTE (Jules @ 28.Apr.2013, 02:21 PM) *
There is also a sales tax paid on any profit made on the property, unless the money is reinvested in Swedish property.

Capital gains tax of 22%, you may deduct costs for renovation (with some exceptions), that are done the last five years. If you purchase another property within the EC you can delay the taxation until you sell that one.
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PDX
post 20.May.2013, 03:30 PM
Post #12
Location: Stockholm
Joined: 2.Aug.2011

Standard evening in Husby:
http://www.youtube.com/watch?v=7-LN5CkFiCQ

Make your own conclusions...

~~~PDX~~~
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PDX
post 20.May.2013, 07:11 PM
Post #13
Location: Stockholm
Joined: 2.Aug.2011

Oh well, I guess everyone has seen this by now, but here are some more Husby youth clubs' activities for the record:

http://www.aftonbladet.se/nyheter/article16804681.ab

~~~PDX~~~
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jostein
post 21.May.2013, 07:22 AM
Post #14
Joined: 22.Mar.2011

QUOTE (Coolrunnings @ 28.Apr.2013, 04:34 PM) *
If you want to make some money under swedish conditions then the best investment in Stockholm are the bostadsrätts apartments in Husby (kista). Reason being that some of them ... (show full quote)

Seems an interesting place to live.
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Affonso
post 21.May.2013, 09:32 AM
Post #15
Joined: 7.Apr.2013

Out of curiousity I went Husby yesterday to see the area and talk to locals.

From what I gather and seen, the hyresrätt apartments on the other side of husby is where the riots are taking place. The other side of husby is where the bostadsrätt apartments are and there was no damage there, the locals were quite relaxed and calm. Must be obvious since people who buy their own apartments take care of their property and area more. Also that side there are more white people living and more balanced mix.

So, I will surely buy an apartment there when I get the chance.
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