Real Estate & Property in Finland
All options for commercial and private real estate
Why invest in Finnish property market?
The Finnish property market provides optimal balance between reliability and profitability. In the recent years, foreign investors have shown increased interest in all Finland’s property sectors, especially in residential property investment. Few reasons for that has been moderate prices, good rates of return on assets and legal security. Foreign investors became the largest investor group in the Finnish property market in 2017 with 29% market share (€18.4 billion).
The best investment opportunities are provided by the Helsinki metropolitan area, where there is a high demand for rental accommodation and the greatest increase in cost and rent of apartments, as well as for office and retail properties.
Rental yield ranges from 5 to 8% per year.
Capital growth from 2 to 3% per year.
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• The Finnish property market is regarded as one of the most transparent and well-functioning in the world. It provides optimal balance of profitability and reliability and guarantees stable income and real estate appreciation.
Risk factors are very low and the clear evidence of that is that institutional investors, such as major Finnish and Scandinavian pension funds, have a dominating role on the property market.
• Affordable funding at low costs. It is possible to obtain a loan for the purchase of new apartments with mortgage rate as low as 1% and only 15-30% down payment and you do not need to be a resident in the country.
• Owning property in Finland is the basis for obtaining a multiple entry visa for 180 days within 1 year to the owner and the closest family members.
Though the purchase of real estate is not a direct basis for obtaining a residence permit or permanent residence, owning property in Finland gives you advantages in obtaining a residence permit. Under certain conditions, property management activities may also provide grounds for obtaining residence permit.
Do you wish to secure your savings and guarantee stable income or plan to get residence permit in Finland? Perhaps you should think of buying property in Finland.
Residential and Commercial property in Finland
Investments in apartments on the secondary market in Finland
Secondary residential property market in Helsinki is a very profitable investment option. Prices on the secondary housing market in Helsinki are traditionally lower compared to the new real estate market and the rental prices as well as the demand are high. Rented housing is common in Helsinki region. In the whole Helsinki metropolitan area 43% of all the households live in rented dwellings.
Rental yield ranges from 6 to 8%, and capital growth is from 1.5 to 3%.
Investments in apartments in new buildings in Finland
Buying new residential rental property that is under construction or completed in Helsinki is a reliable and profitable way of investing and is a proven path to long-term wealth.
The key advantages are: easy to finance the purchase (down payment 15-30%), low mortgage interest (~1%), low maintenance charges, no risks.
We help to get a loan at a same mortgage rate as for Finnish residents. The first 3-5 years you pay loan interest only.
Investing in new residential rental property allows to completely pay off a loan due to incoming rental payments. In addition, the price of the apartment grows by 2-3% per year thus ensuring total return on investments amounting to 7-10% annually.
Investing in commercial property in Finland
Commercial real estate in Finland is clearly the largest
sector in the investment market and the one most favoured by investors. The market has fairly wide choice of properties by type, price and location. You can choose restaurants, hotels, offices, industrial properties or warehouses.
Income return is 5-7%, a stable increase in rental costs and high liquidity of objects.
Our customers are most interested in risk-free objects with long-term lease agreements.
We can offer you commercial real estate objects worth from 300 thousand to 10 million euros.
Buying an apartment or house for personal needs
We provide our deep market knowledge and experience to help you find the house or apartment according to your individual requirements as well as resolve all issues related to the purchase of the property.
Our service is an ideal option for those who want to guarantee the security of the transaction and its most advantageous conditions and do not have time to study the market themselves and go deep in details.
We understand the market and dynamics where to buy and help you choose the right property at the right price.
We help you buy the right investment property. Only then you can get a guaranteed income and ensure the safety of investments.
We will help you to receive regular income in accordance with the investment strategy and will provide maximum leasing price and occupancy rate.
You are attracted by investment property, but you do not want to burden yourself with communicating with tenants, solving current issues related to the operation of the facility.
Our knowledge of the local real estate market helps us sell the property quickly and for a good price.
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3. Lawyer services in Finland, including appealing against decisions of Finnish state agencies (migration department, tax department, social services, etc.).
4. Communication or correspondence with Finnish state or financial authorities.
5. Operations with real estate: purchase, lease and registration of immovable property in Finland.
6. Services of a Finnish consultant-interpreter, including a representative in negotiations.
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Click to view a question
Residential investment property in Finland is bought with the intention of earning a return on the investment through rental income and profit from appreciation through the future resale of the property. An investment property can be a long-term endeavor or an intended short-term investment such as in the case of flipping, where apartment is bought, renovated, and sold at a profit.
In Finland, “buying an apartment” actually means buying shares in a housing company (asunto-osakeyhtiö) – more commonly known in English as a housing cooperative. The amount of shares per apartment is proportional to the size of the apartment. A housing company is a legal entity that owns one or more residential buildings. No board approval is needed to buy shares (i.e. an apartment), which is usually done on the open property market through a real estate agent.
Owning shares in a housing company, corresponding to “one apartment”, actually means “owning your apartment”. The obligation to ensure proper maintenance of buildings and apartments is shared between the housing company and its shareholders.
Depending on the type of housing, costs include transfer tax and renovation costs. Transfer tax is usually paid by the buyer. Buyers must pay it on their own initiative. Transfer tax is 2% for apartments (shares in a real estate company) and 4% for real property (ex. a house with land). The tax is calculated on the total debt-free transfer price i.e. the sale price plus the portion of outstanding housing company debt for the apartment.
“Sale price” (myyntihinta). Price to be paid to current owner; this does not include payment of any of the apartment’s outstanding share of the housing company loan.
“Free of debt sale price” (velaton myyntihinta). This includes the payment to the current owner plus lump sum payment of the apartment’s outstanding share of the housing company loan.
Loan payment (rahoitusvastike). If the housing company has a loan, and you do not pay the “Free of debt sale price” at the time of purchase – thus freeing the apartment of debt to the housing company – rahoitusvastike will be your monthly payment towards the housing company loan.
Maintenance charges (hoitovastike). This is the monthly fee for services, general maintenance etcetera. The charge per apartment is based on the size of the apartment in m².
Yhtiövastike. This is the combined cost of Rahoitusvastike + Hoitovastike
When major work is required on the building, the housing company usually obtains a loan to cover it. The housing company then recoups the money from the shareholders i.e. the apartment owners. The share of the housing company loan per apartment is based on the size of the apartment in m². The loan share may be paid in monthly instalments, or in a lump sum.
The maintenance charges are 3 to 5 euros per 1 sq. m. Water and electricity are paid separately by the tenant (water costs are about 15-20 euros per person per month). The exact cost of maintenance is indicated in Fintegra offer. The annual property tax is included in the maintenance charges so no extra payments are needed.
In Finland most of the apartments are rented out unfurnished and all apartments are fully-equipped when sold. New apartments are fully-equipped and are ready for renting out on the first day of the completion of the construction works. Old apartments are also fully-equipped (kitchen, home appliances, plumbing, furniture included). However, the apartments condition may vary. Some may require small renovation works. That should not deter you from purchasing, because the price difference is rather large and you can get a good discount if the interior of the apartment is poor. If that is the case our company provides renovation service with excellent combination of price and quality. We manage to create an attractive apartment for leasing and insure maximum rental income. Fintegra policy is to solve all the arising questions for you and make gaining rental income and capital growth easy.
The primary criterion for obtaining a home loan in Finland is the borrower’s capacity to repay the debt. However, banks are cautious and if you are not a resident of Finland you may face many hurdles.
The best way of getting residential investment property loan is buying a new apartment. You have access to a housing company loan to finance your residential investment property. If you take advantage of the housing company loan, you do not have to commit yourself to a bank loan and you can become the owner of the apartment by paying only the sales price. The remainder of the debt-free price is paid to the housing company monthly as a charge for financial costs. Housing company loans are granted without separate collateral. You’ll save time and effort as the housing company loan has already been agreed through competitive bidding.
Typically, the loan amount is up to 70% of the total cost of the apartment. Upon signing the sale agreement, you will only need to pay 10 to 20% of the apartment’s debt-free price. The remainder of the sell-price is paid when your home is completed and you are ready to rent it out.
Usually, for the first 1–2 years after the apartment has been completed, you’ll only pay the interest of the housing company loan. After this, the repayment of the housing company loan is added to the interest, increasing the amount of the charge for financial costs. You can also pay your proportion of the housing company loan in installments or altogether right before the construction of your home is completed. If you pay the housing company loan in full, you will not have to pay the charge for financial costs at all.
The apartment can be sold more easily if it is subject to a housing company loan. Potential buyers will not be turned away by the fact that they cannot secure a large enough loan from a bank.
In Finland, almost all tenancy agreements require that tenant pays a rent security deposit. The rent security deposit usually is one to two months’ rent.
The tenant is also required to pay the water rate and to sign an insurance contract and electricity contract with an electricity provider himself. The water rate is often determined according to the number of residents in the dwelling. Since apartments normally have central heating, it is included in the maintenance charges and rent. The landlord pays the maintenance charges himself.
The tenant’s responsibilities are to pay rent on time, to maintain the apartment in normal condition, and to adhere to the rules of the building and housing company.
In Finland, real estate agent’s commissions on selling property range from 3% to 5%.
When you sell your apartment and make a profit, the capital gain will be taxable as capital income. The tax rate on capital gain and other capital income is 30% if you receive €30,000 or less, and it increases to 34% on the part that goes over €30,000.
In 2000 the government removed the requirement that a nonresident must obtain a permit to buy a secondary residential property in Finland, putting foreigners on exactly the same footing as Finns. Thus the duration of the purchasing process depends on time to find an appropriate investment property. Residential investment properties in Helsinki can be difficult to find, especially at the lower end of the market and buying decision is often required to be done quite fast. Therefore, Fintegra puts a great emphasis on establishing highly reliable and rapid communication between our Customer and manager. We use different kind of channels of communication, such as WhatsApp, Viber, Skype, Imo etc. As for the purchasing procedure it usually takes about two weeks to complete all procedures.