Flat prices in Brno are falling, while demand for rentals is higher

Property experts therefore advise that anyone who does not need to sell now should not do so. For flat owners, it is currently far more advantageous to let their property. “Flat prices in Brno are currently at roughly the same level as they were in February or March 2021. Anyone who bought a property earlier will therefore probably still make a profit on the sale. However, the whole transaction may take longer, as the sales process has lengthened. People are more selective, hesitate longer and consider their options more carefully. Many ultimately prefer to buy a property further away from Brno, even if it means commuting,” explains David Novotný of the real estate company Bohemian Estates, which specialises in property investment and rental flat management.

Bohemian Estates has a branch in Brno and, according to Novotný, there is an increasing number of cases in which property owners are concerned by falling prices. “It is important to realise that this is not a dramatic fall. I would perhaps rather describe it as the local property market returning to normal. Yes, the average price of a flat in Brno has fallen year on year; on the other hand, demand for rental housing has increased, giving property owners an ideal opportunity to let their flats,” he adds. The average annual rental price in Brno, by contrast, rose by 17%, according to statistics. People pay roughly CZK 17,000 to rent a 60 m2 flat here.

“In most cases, rental income can comfortably cover the monthly costs of a mortgage loan, while still leaving something for the owners of these properties. The biggest issue I see is that landlords do not want to deal with the administration and concerns associated with letting,” says David Novotný.

However, the rental management service can help property owners with this, and it is increasingly sought after across the Czech Republic. What is more, it is nowhere near as expensive as one might think. Bohemian Estates normally charges a monthly fee of 10% of market rent for property management. Internal statistics also suggest that professionally managed flats are occupied more frequently. “By checking prospective tenants against debtor registers, we place reliable tenants in properties and achieve lower turnover. We also have our own internal tools that help us find tenants for vacant properties very quickly. Property owners are therefore spared the hassle of advertising or any communication with prospective tenants,” Novotný explains.

Bohemian Estates also offers a management service with guaranteed rent. This means that even when a flat is vacant, the owner continues to receive rent. “The fee for this option, which we call JISTOTA, is slightly higher than for standard management. On the other hand, the property owner has absolutely no concerns. We handle everything on their behalf and send the rent in every case, even when the property is currently vacant. There is growing interest in this service, and it is particularly ideal for those who financed their flat purchase with a mortgage,” concludes David Novotný for Bohemian Estates.