What you should or might want to know ...
Below you will find answers to questions frequently asked by people interested in buying an apartment in Egypt.
If you do not find the answer to your question here, please do not hesitate to contact me.
If you would like to sell your property and use the proceeds to finance your investment in Egypt, we will take care of this professionally in the RE/MAX network and the financing of your apartment purchase in Egypt will be under good control and coordination.
Rental income for a resort that is not yet operational is very difficult. If you compare offers in Hurghada on Booking, for example, prices vary greatly. In Al Hambra, prices will be based on the current market situation at the time the resort is commissioned. So prices cannot be estimated now, also due to the very fast changing price situation in Egypt. However, they will be in the higher levels due to the excellent location, proximity to the airport, amenities, private beach and the attractiveness of the location close to the centre. It is generally assumed that the payback is around 10 years for a short term lease and up to 16-18 years for a long term lease.
However, an investment in an apartment in Hurghada does not only capitalize in rental value, but also in the rapid increase in the price of the apartment itself, especially if you buy an apartment in a good unfinished resort at a price significantly lower than the final price after completion. Currently, prices of finished apartments are also rising significantly and given the development of Hurghada and the location of the projects I am selling, such growth can be expected in the future.
The easiest way is to sign a contract directly with the resort manager (usually a subsidiary of the developer), who rents the apartment for you and you share the proceeds usually in a ratio of around 70:30 (the larger part of the proceeds for you). The manager also provides you with rental services such as cleaning, laundry, inspection and taking over the apartment after the end of the lease. Another option is to rent through Booking, AirBnB or through an intermediary in Egypt (travel agent, real estate agent). In this case, you book the related services with the resort at the agreed prices. Both methods can be combined.
You can also rent on your own, find a local partner in Hurghada to take care of the apartment and provide services, and rent through Booking, etc. Some clients choose to rent only within their circle of friends if they use the apartment themselves very often.
The success of the rental depends largely on the apartment's facilities. Resorts often offer owners furniture packages, but these are the same in all apartments. From my own experience, it's a good idea to differentiate yourself with furnishings and make the apartment cozy, comfortable and practical (I can help with this, of course). The manager guides the prospective renter through multiple apartments; if yours is nice, the prospective renter will probably choose it because all the others will be similar and the rental price is the same for all of them. When the manager sees that your apartment is renting successfully, he will prioritize it to secure a customer.
The purchase of an apartment is always associated with the payment of a maintenance fee for the common areas and facilities of the residential project, such as swimming pools, beaches, lifts, lighting, reception, etc. Each developer determines the maintenance fees individually.
In some projects, maintenance is paid annually, with the price fixed usually for a five-year period and paid at the beginning of each year according to the size of the apartment (the price is determined per m2 of the apartment area).
Another option is a one-off payment of maintenance costs, usually 10-12% of the price of the apartment. This amount is collected by the property manager when the apartment is handed over to the buyer and deposited in a high interest savings account (in Egypt the interest on the deposit in the account is really high) and the proceeds are used to cover the maintenance costs. In some cases, it is usually stipulated in the contract that if the annual maintenance costs exceed the interest income for the whole project (especially at a time when all the apartments have not yet been sold), then the manager will notify the owners of the apartments and the uncovered maintenance costs will be allocated among all the apartments in the project in proportion to the size of the units.
In the Al Hambra project, where I work primarily, owners are required to pay a one-off amount for maintenance of the common areas of the project (lifts, corridors, swimming pool, reception, waste, etc.) of 10% of the price of the apartment upon delivery of the apartment. For example, if the price of the apartment is EUR 50,000, the maintenance deposit will be EUR 5,000. The developer will deposit this amount from all apartment owners into a high interest savings account and use the interest to finance the maintenance. Every year, the developer prepares an audited management account and provides it to the apartment owners. In the event of a negative balance, the developer shall allocate this amount among all apartment owners in proportion to the size of the apartment unit. If there is an overpayment, it shall be saved for future years. General maintenance is carried out once every 10 years and is shared by all apartment owners.
You pay for energy consumption (electricity and water) according to the actual actual consumption, the prices are significantly lower than in the Czech Republic, you will own the meters - when you take over the apartment you will pay the cost of the meters according to the current price (now it is EGP 10,000 for the electricity and water meter together). So there are no regular monthly payments, you subscribe to the energy in the form of a credit at your discretion and then draw down the credit and top up when it is about to run out.
The complete furnishing of the apartments will cost you, depending on the scope and standard, 5000 to 7000 EUR for studio apartments and CZK 7000 to 11000 EUR for one or two bedroom units. We can help you with furnishing your apartment - we can arrange large items for you, such as air conditioning, kitchen, large furniture, blackout curtains. We will draw up a design and you will choose the furniture and equipment from catalogue s according to the current offer.
In the Al Hambra housing development project, in the event of the death of the apartment owner, the transfer will be made to the heirs. The transfer is also possible within the family without inheritance. With the help of our cooperating Egyptian lawyer in Hurghada, an official will can also be created and kept up to date. A lawyer will explain the details if you are interested.
No, don't drink tap water in Egypt. We recommend getting a good quality filter for the apartment, which is installed in the kitchen cabinets. You can then use the water safely for cooking and possibly drinking.
When buying an apartment in a new development project under construction in Egypt, you must take into account the cost of legal services in the amount of 500 EUR for checking, verifying and registering the future contract with the court and securing a power of attorney at the local notary office (the amount may change if the exchange rate changes significantly). Upon completion of the project, the final contract will be signed and registered with the Egyptian Land Registry.
Each year, a property tax is payable on the finished property, the calculation of which is very complex and depends on the location and size of the property. It is not a high amount, no need to worry about it. We can help you with the payment of the tax.
There is no property tax in Egypt. Also, income tax on rental property is limited, it depends on the amount of rental income and you will usually fit within the tax free limit.