What should you do with a flat that still has a mortgage?
At this time last year, tourism in the Czech Republic was at its peak. Prague and its surrounding areas were packed, and short-term rentals were thriving in popular tourist locations as a result. Over the past few years, this segment had experienced an unprecedented boom, offering domestic and international travellers an often more convenient and more affordable alternative to traditional hotel and guesthouse accommodation. However, global travel restrictions caused by the coronavirus pandemic dealt this segment of the Czech property market an unexpected blow.
No one could have predicted how 2020 would unfold, and at the beginning of the year most experts agreed that short-term rentals were one of the most profitable forms of the sharing economy. In previous years, investments in properties intended for this type of rental had therefore multiplied, and in the vast majority of cases they were financed by mortgage loans.
The loss of tourists and other travellers for such a long period represents a real problem that may lead to financial difficulties for many families and businesses. In recent years, accommodation provision had to be approached like any other business activity, and for many people short-term rentals became their main source of income. However, switching from short-term to long-term rental does not necessarily solve the problem either: it will not generate the same monthly income for the household budget and will probably only be enough to cover mortgage repayments and other property management costs. Another issue with long-term rentals is the relatively lengthy notice period when ending a tenancy, which is usually three months and does not give the owner the necessary flexibility.
If restrictions were eased again, making it possible to operate short-term rentals profitably once more, the property owner would not be able to respond quickly enough and would lose income for several weeks.
However, given the current situation, such a scenario is not expected in the coming weeks, and flats intended for short-term rental continue to stand empty. But what should you do with a property that still has a mortgage? An elegant solution that removes the above-mentioned long-term rental from the equation is offered by the independent real estate agency Bohemian Estates International.
It continues to be actively involved in property management and offers its clients a new rental strategy that enables property owners to retain their income without being restricted by a long notice period. This allows them to respond promptly to the situation while their rental is taken care of.
In addition to finding tenants, Bohemian Estates handles all legal requirements, necessary administration and utility transfers. It also communicates with tenants and arranges any repairs and maintenance. With its new rental strategy adapted to the current situation, the company is extending a helping hand to everyone who chose to invest in a rental property, financed it with a mortgage and now find themselves in a difficult financial situation.