The guaranteed rent service will free you from all the problems associated with letting a property – how does it work?
Letting a property is one of the most logical ways to earn extra money if you own a property that you do not use yourself. The problem, however, is that if you need to rely on rental income, any problematic tenant can jeopardise your financial budget. Some therefore advise thoroughly checking prospective tenants before letting the property and signing watertight lease agreements with them. Although caution is certainly appropriate, it is unfortunately not always enough.
However, some real estate companies now offer a guaranteed rent service that frees you from all tenant-related problems. “When letting a property, we most often encounter tenants with irregular payment habits or tenants who tend to damage the property. However, property owners in the Czech Republic have very limited options for protecting themselves against these risks, and even where all legal requirements are met, the entire process can take several months before the owner receives compensation for the damage caused. That is why we have included a guaranteed rental service in our portfolio, which, for a pre-agreed fee, relieves property owners of virtually all concerns,” says David Novotný, owner and managing director of the independent real estate agency Bohemian Estates. Established in 2006, the company was created to offer both small and large investors genuinely comprehensive solutions in the management of and investment in residential and commercial properties. Bohemian Estates now has three physical branches across the Czech Republic—in Prague, Brno and Ostrava—and manages more than 2,000 flats in the Czech Republic and abroad, with a total value of CZK 15 billion.Bohemian Estates
But what exactly should you understand by guaranteed rent, and how does this service work? “With a property owner who wishes to use this service, we sign a lease agreement that clearly defines the monthly rent. This is set following an inspection of the property and reduced by approximately 15%, which is the fee for the service. From then on, we handle all the concerns, whether advertising, selecting tenants, property maintenance and so on,” explains Novotný. Everything is taken care of, including utility transfers and rent collection, while the company also guarantees that the property will be returned in its original condition. As a result, even tenants with destructive tendencies pose no threat to the property owner. As mentioned above, regular maintenance and repairs are also provided, and owners receive regular online reports on how their property is performing.
“Although owners could theoretically leave everything to us and simply receive rent regularly, we do not want to keep anything from them, so we provide them with continuous access to reports and photographs of the property. They can therefore monitor in real time how much the property is earning and whether it is currently occupied,” adds David Novotný.
Who is the service for?
The service is suitable for all property owners who do not want to deal with issues arising from letting their property. It is particularly appreciated by those who want or need to receive rental income regularly while not having to worry about anything. It is therefore ideal, for example, for those who have bought a flat with a mortgage and do not want to run into difficulties. The cost of this service is not high. “The fee we charge for this service is approximately 15%. However, both experience and statistics clearly show that professionally managed properties are occupied more often and frequently achieve better rents. Over a period of several months or years, I can therefore say with a clear conscience that the service pays for itself,” concludes Novotný on behalf of Bohemian Estates.