So, I contacted the real estate agent in Hungary. They’re not even going to try and sell my house there…because there’s currently no market for it anyway. The housing market totally crashed there. So I guess I am stuck with an unsellable house in Hungary and no endowment to invest in index funds.
Oh well…I never included that house in my net worth anyway.
What can I learn from this? Well, my parents bought me this house at the end of the Hungarian housing boom. Apparently, the market soared from 1998 to 2007 and house prices increased 264%. They bought the house in 2005, almost at the height of the market. They were lured into investing in the Hungarian housing market because many investors before them made huge profits. My parents thought they were buying their kids (my brother also has a house there) a good investment for the future. With hindsight it’s kind of obvious they should not have bought at that moment. But….that would be timing the market and that’s always very easy when looking back.
My lessons learned here:
- If an investing opportunity sounds too good to be true…it probably is too good to be true.
- Research, research, research!
- Don’t buy stuff you don’t know anything about
- If everybody else has already made a fortune…you’re too freakin’ late to join the party!
- Don’t buy stuff that requires communicating through a foreign language…this causes so much extra costs. Everything my parents want to get done (bills, utilities, maintenance) costs them money, because they don’t speak Hungarian.
- Invest in REITs instead of becoming a landlord, I don’t want all the fuss. I’m still looking for a nice fund to invest in, since Vanguard doesn’t offer such funds here in Europe.
What would you do? Sell both houses at a great loss or keep them for a while and wait for the Hungarian housing market to rise again?